Fatwa ID: 03157

Answered by: Maulana Muddasser Dhedhy​

Question:

Sorry to bug you but we have been working on a dropshipping business for half a year and I recently found out that this business model is very controversial and may not be permissible? We are creating an eCommerce website where we sell products online and pretty much are trying to compete with Aliexpress, Wish, etc.

Currently, our products are coming from our competitors like Aliexpress. We do not say we own these products but rather say we get our products from other websites like Aliexpress.

Down the line, we intend to get suppliers to sell on our website as well. You can say we are trying to create another Aliexpress right now but currently, we are dropshipping until our name gets big enough for sellers to advertise directly on our platform. With that being said, is what we are doing haraam that we need to shut the entire website down?

Answer:

In The Name Of Allah, The Most-Merciful, The Most Kind

The issue with the drop-shipping model is that it constitutes selling an item which is not in one’s possession. Islam requires that a person first have the item in their possession then they may sell it to another person.^[1] However, an exception is made to this rule in regards to Salam. Hence, if your business is structured in accordance with the Salam model then it will be permissible.

The Salam model requires the following:

1. The contract must be definite without an option to rescind.^[2]
2. The product must be properly specified in a manner that eliminates any possibility of uncertainty.
3. The product must be fungible (i.e. uniform, interchangeable and substitutable).
4. The contract must not be for a specific item. A Salam contract may be used for all generic items which are made to standardised specifications.
5. The commodity must remain available in the market right from the day of the contract up to the date of delivery.^[3]
6. The delivery of the product must be deferred to a later time.^[4]
7. The price must be properly specified.
8. The price is paid up in full at the time of the contract.^[5]
9. The date and place of delivery are known.^[6]

If these conditions are met, then your dropshipping business will have assumed a Salam model and it will be permissible.

Only Allah Ta'ala knows best.

Written by Maulana Muddasser Dhedhy

Check and approve by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham