nowadays drop shipping has become very famous, and I wanted to know if if drop shipping in Islam is permissible. The whole concept of drop shipping is that you do not sell anything that's yours so you don't have any product in stock but you order the product after you get paid. So will that be permissible to sell because you do not actually own the product. And also if it is not permissible to sell because you do not own the product. Can you advertise the product in such a way that the customer know that the product is not in stock after payment is received then the order will be made.
بسم اللہ الرحمٰن الرحیم
الجواب ومنہ الصواب
For a sale to be valid, the seller must own and have possession of goods being sold. It is not permissible to sell any movable merchandise without having had its possession and ownership. The Prophet (Peace and Blessings of Allah be upon him) forbade this.
In the given description, as the seller neither owns the products, nor are they in his custody, rather are being sold through display of pictures of those items, therefore the business of “drop-shipping” in that situation is not permissible under Shari’ah business rules.
However, if drop-shipping can be aligned with the below options, the business will become permissible:
a. The ordered merchandise is currently un-available with the seller.
b. Customer’s order will be processed upon receipt of order along with the payment per agreed terms.
With today’s on-line business models, it is easy to transmit above conditions to the customer with the order receipt notice.
It is important to note that the possession of ordered goods must be secured prior to shipping them to the customer.
Either the seller himself takes possession or his assigned representative. But that representative shall not be one from the staff of the company (main supplier of merchandise).
The seller shall take the role of an agent of the company to handle the sale, with a salary or wages commensurate with the seller’s assignments.
Per this option, the customer sends the order to the seller (the middleman) who negotiates the terms and conditions of sale with the customer and seals the contract. Thereafter, the final order is sent to the company which then send the ordered materials directly to the customer. In this way the seller is absolved from the responsibility of ownership or possession of goods.
Below are a few ancillary conditions which must also be taken care of:
1. Haram items should not be bought and sold.
2a. In transactions involving gold, silver or money, possession of those valuables is necessary at the contract venue/session.
2b. Borrowing and lending is not allowed of those valuables.
2c. In addition to above, standard rules of monetary exchanges shall apply.
3. The types of merchandise and its value should be accurately determined and fully elaborated, to eliminate all types of disputes and ambiguities.
4. All irrelevant conditions must be excluded from the contract.
5. Pictures of living beings should not be included.
6. After receipt of goods from the seller, the customer will have the option to return those and reclaim his full money.
7. If a defect is found in the delivered merchandise, the buyer shall have the right to return it to the seller. The seller will be bound to refund the customer. It is not permissible to reduce the refund based on the extent of product damage.
وشرط المعقود علیہ ستتہ کو نہ موجودا مالا متقوما مملوکا فی نفسہ وکون الملک للبائع فیما یبیعہ لنفسہ وکونہ مقدور التسلیم فلم ینعقد بیع المعدوم ... ولا بیع مالیس مملوکا لہ وان ملکہ بعدہ
وفی المواھب وفسد بیع المنقول قبل قبضہ (ھکذا فی الدرالمختار مع رد المحتار فی اول کتاب البیوع وباب المرابحۃ والتولیقہ)
فتح القدیر میں ہے : ولا بد من قبض العوضين قبل الافتراق (باب الصرف، ج: 6، 260)
فقط واللہ اعلم بالصواب