Is Dropshipping Halal Or Haram? How To Sell What Is Not With Us In 2024 (2024)

Dropshipping is haram when done in the traditional method. In this business model, a person is advertising a product for sale on the internet without owning the goods. Instead, the dropshipper requests order fulfillment from their chosen supplier after receiving an order. The hadith of the Prophet is clear: a Muslim who doesn't own or have the goods cannot sell them. You need to own it and have possession of it. Qudamah said in al-Mughni (4/155), “It is not permissible to sell an item that you do not possess so that you will go and buy it and deliver it.” If these two conditions are violated, the conventional dropshipping method is haram.

However, many also say that it’s possible to design a halal dropshipping store that complies with Islamic teachings. For example, the fatwa website IslamQA declares dropshipping is halal “if you turn it into profit-sharing or if you act as an agent in return for a fee.” The site is supervised by Islamic scholar Shaykh Muhammad Saalih al-Munajjid.

By becoming an agent and adhering to salam transactions, a manufacturer/supplier is considered as the offeror (Ja'il) while the dropshipper is the worker (Amil). Dropshippers receive commissions for the products they manage to sell through their business.

When Is It Permissible To Sell What Is Not With Us?

It is permissible to sell what is not with us if we adhere to the criteria for Bai' Al-Salam, which states the following:

• We have an identified and reliable supplier.
• We are ready to supply the items we sell in our Muslim eCom Brand store.
• An agreed-upon delivery date, quantity, and price tag have been confirmed with the buyer.

We can then set up our Muslim eCom Brand store per the following guidelines and specific circ*mstances:

• Don't sell anything considered counterfeit, illegal, copyrighted, gold or silver.
• Have an established wholesaler who can guarantee that there will be no issues around the supply chain or order fulfillment.
• Only sell high-quality products we've tested. The goods should also meet the description and details we share with potential customers.
• Write detailed and accurate product descriptions on our Muslim eCom Brand online store, ad copy, social media, and landing pages.
• Refrain from making false promises about delivery times or shipping costs.

What Is The Ruling On Dropshipping In Islam?

The ruling on drop shipping in Islam is that the conventional drop shipping method is haram. This is because of the hadiths, wherein the Prophet (peace be upon him) said do not sell what is not with you. However, the context or interpretation of this hadith was about a person asking if they could sell something.

If a Muslim eCom Brand founder has an identified third-party supplier partner or online retailer ready, willing, and able to sell what is not with you, they can sell the product. This can be supported by the sale of dates in Medina, which happened 2-3 years in advance (before the dates even existed).

What Are The Shariah Issues Raised Against Dropshipping?

The Sharia issues raised against dropshipping are:

1. the structure of the business model between the retailer and the consumer (the sale of a non-possessed item)
2. the retailer's lack of possession and possible risks (the selling of a non-possible product).

How To Make A Dropshipping Business Halal?

To make a dropshipping business halal, we can consider these two options:

✅ The first option to make dropshipping halal is by speaking to our wholesaler and agreeing with our business practices on how we plan to promote and sell products. For each sale of a product we advertise on our online store, we get paid a commission for promoting that sale. We also need to inform our customers that we’re a non-affiliate of the product we're promoting, meaning we receive a commission and aren't directly tied to the product. As Muslim, we may do this because now we are an agent to our supplier. We're not selling it directly, so no risks are involved.

✅ A second option is to have a reliable vetted supplier partner who can guarantee the delivery of products to the consumer. Adhere to the guidelines that heed Islamic teachings as follows:

• As Muslim brand founders, we must be honest and transparent about the origin and ownership of the products in all business dealings.
• Build our own Brands (have our name, logo, business details, and product description on our product labels and online stores)
• Have a clear product description that includes sizing, color, design, etc.
• Sell our products for a fair price. Don't leverage price hikes or manipulative tactics to earn higher profits for a sold item.
• Only sell high-quality inventory that aligns with Islamic ethics and fulfills our promise to deliver value.
• Only sell halal things that adhere to Islamic values. The products we sell should be ethically sourced and free from haram.
• Provide accurate information. Don't falsely represent or run misleading ad campaigns to make more money in our Muslim eCom brand.
• Ensure that the products we sell are high-quality and not sub-par items.
• Avoid participating in scams or fraudulent activities.
• Be aware of social issues and our responsibilities as a Muslim Brand founder.
• Only sell things that are environmentally sustainable and follow ethical labour practices.

In a YouTube video, Indian Islamic public orator Dr. Zakir Abdul Karim Naik explains that while conventional dropshipping is considered haram, the business model can be halal.“If all (Sharia) rules are fulfilled, then dropshipping can become permissible,” he said.

How Can We Ensure The Products We Sell Through Our Muslim eCom Brand Are Halal?

To ensure the products we sell through our eCom brand are halal:

• Research and verify product authenticity.
• Find suppliers who are halal certified.
• Confirm that products keep their halal status during the shipping and order fulfillment process.

For example, the supplier uses halal materials and a shipping company that can guarantee that there will be no contamination during transportation and will preserve the halal integrity of our inventory. We can then ensure that the condition of the product we sell through our eCom Brand is halal and remains in compliance with Islamic law.

As Muslim brand owners, we cannot sell prohibited or haram items under Islamic guidelines, such as pork or products used for haram activities like gambling. So, we must be diligent about what we sell and the companies we use as our suppliers.

👆🏽👆🏽👆🏽

How Important Is Intention In Conducting A Halal eCommerce Brand?

Intention in conducting a Muslim eCom brand is critical. The best way to please Allah is to run a business that aligns with Islamic values. As Muslim brand founders, we need to conduct ourselves and our business with honesty, transparency, and integrity. This includes things like:

• Refraining from engaging in riba or interest-based transactions. Instead, use a payment gateway that complies with Islamic finance principles.
• Using a tax method like zakat or almsgiving.
• Abstaining from price gouging, dishonest or false advertising, or misleading information

As Muslim eCom brand founders, we need to continue learning about changes to the eCom business model and stay updated on current trends. Also, we should consider seeking instruction from an Islamic scholar or advisor to learn specific information about eCommerce.

The bottom line is to connect with someone who can supply insights on ethically running our Muslim eCom brands and avoid deceptive practices, so it stays halal.

Now if you would like to learn more about how we help Muslims launch their Muslim eCommerce Barakah Brand on Shopify within 7 days, by installing our Private Label On Demand Barakah System.

👆🏽👆🏽👆🏽

Your brother Amine Ait