Drop Shipping On EBay

CategoriesTrade, Business & All Things Money [684]

Fatwa ID: 07225

 

 

Answered by: Alimah Shireen Mangera-Badat

 

Question:

 

 

I am a casual eBay seller. I have the following questions:

 

1) from what I have read online on certain websites, I have become aware that drop shipping in impermissible. Is this correct?

 

2) would the following scenario be permissible:

 

A supplier and I agree that the supplier will use my eBay account to sell his items (which are in his possession). In return I will get 10% commission on all sales.

 

The supplier will do everything: creating the eBay listings, photos, descriptions, pricing etc. He will also arrange postage/delivery of the sold items, and he will answer all queries and deal with returns and refunds. All I will be doing is giving him access to my eBay account.

 

Would this be permissible?

 

(Would this not be like me giving my shop to someone to sell his items in the shop. And in return he will give me a 10% commission?)

 

 

 

In the name of Allah, the Most Gracious, the Most Merciful

 

 

Answer:

 

Drop shipping is a retail fulfilment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the seller doesn’t have to handle the product directly.

 

 

The permissibility of drop shipping in Islam is a topic of discussion among scholars, and opinions can vary based on the specific conditions and details of the transaction. Generally, the main concern with drop shipping lies in the handling of the sale contract and the possession of goods.

 

 

In traditional Islamic jurisprudence, it is required that a seller should own and possess the goods being sold at the time of the sale. This is based on the hadith of the Prophet Muhammad (peace be upon him), who said:

 

“Do not sell what you do not possess.” (Sunan Abu Dawood, Hadith 3503)

 

 

Another concern is that the seller should bear the risk and responsibility for the goods until they are delivered to the buyer. (Qawaaid Fiqiyya page 96)

 

 

Given these principles, drop shipping can be impermissible if the seller does not take possession of the goods and merely acts as an intermediary without assuming responsibility. If this is the case that you are selling goods that are not yet in possession, it would fall under the category of حبلة الحبلة- owning a possession that’s still not in your possession (mostly related to pregnant animals) but they principle here would be the same- therefore being impermissible. 1

 

However, some contemporary scholars allow drop shipping if specific conditions are met, such as clearly informing the buyer about the nature of the transaction and ensuring the seller takes some form of constructive possession.

 

Regarding the scenario where you provide your eBay account to a supplier and receive a commission for sales, this arrangement can be permissible under certain conditions. This setup resembles an agency agreement, where you act as an agent (wakil) for the supplier.

 

In Islamic jurisprudence, wakalah (agency) is a contract where one person (the agent) undertakes transactions on behalf of another (the principal) for a fee or commission. This is generally permissible.

 

Ibn Qudamah states in “Al-Mughni” (vol. 5, p. 248):

 

“It is permissible to appoint someone as an agent for selling goods and to give him a commission for his services.”

 

In your scenario:

 

– The supplier owns and possesses the goods.

 

The supplier is responsible for creating listings, managing sales, handling queries, and dealing with shipping and returns.

 

– You provide the platform (eBay account) and receive a commission.

 

This is akin to giving someone a shop space to sell their items and receiving a commission, which is permissible.

 

Therefore, – Drop shipping is generally impermissible if the seller does not own and possess the goods being sold.

 

Your proposed scenario of providing an eBay account for the supplier to sell their items and earning a commission is permissible.

 

This setup is like an agency agreement (wakalah) in Islamic jurisprudence and aligns with the principles of allowing someone to use your space for selling goods in return for a commission.

 

May Allah grant you success and bless your business endeavours with adherence to Islamic teachings.

 

 

I hope that this answers the question.

 

 

1 Iqtisaad Islami- page 22

 

 

 

Only Allah knows best.

Written by Alimah Shireen Mangera-Badat

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham

 

 

 

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