Fatwa: Is Amazon FBA Halal or Haram?

Islamic Finance Fatwa
#1

This is iA the most comprehensive resource for this question on the internet.

We present views from Al Qalam, Islamweb, then our resident expert Mufti Billal Omarjee presents his views, and finally IFG present a commercial perspective on the matter.

View One: Al Qalam

If your query refers to the Fulfilment by Amazon (FBA) arrangement, then Amazon is your agent which takes possession of your inventory on your behalf, stores it and picks, packs and ships it when a purchase is made. Thus, this does not fall under the prohibition of selling something that you do not own or possess.

Source: here

View Two: Islamweb

If the seller owns the product that he lists on the website, then there is no harm in the mentioned transaction regardless of whether he ships it to the customer through the website or through any other shipping company. There is also no harm in the fees that the website charges for listing the product, or for acting as an agent for the seller in selling the product and receiving the price, or as an agent for the customer in receiving the product and sending it to him, or only to promote the product and list it on its pages while the contract is conducted directly between the customer and the seller. None of this affects the validity of this transaction. Hence, the important factor here is that the seller must own the product that he is listing on the website.

Source: here

Mufti Billal Omarjee view:

All scholars agree that it is permissible to select an agent who will trade on your behalf. This sort of practise was present in the time of the prophet (pbuh). For example, the Prophet (pbuh) gave to Urwa (ra) a Dinar to buy him a sheep, and he bought two sheep for him, then he sold one of them for a Dinar, and bought a Dinar and a sheep to the Prophet (pbuh) The Messenger of Allah (pbuh) prayed for blessing for him. [Bukhari]

And Allah knows best!

The IFG view:

We agree with the above views. FBA businesses own their products and have to take on significant inventory risk by purchasing assets in bulk beforehand. They unambiguously own their assets and Amazon is merely their agent.

A side note - if you are looking to get into this business, listen to this podcast with a successful FBA Amazon business.

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#2

I’m going to start an Amazon FBA business, for it to be successful I have to purchase my goods from China on a website called Alibaba. The reason for this is it’s the cheapest and has a vast number of products. Theres no alternative company in another country offering a service as good as Alibaba and majority of Amazon sellers use it.

However, Alibaba has invested in an AI company called Sensetime. Sensetime is developing AI algorithms for Alibaba to develop and improve their service as well as gather data on customers.According to the American government which isn’t trustworthy to be honest and news articles sensetime is being used by Chinese government to track the Uighurs population in Xinjiang province. Sensetime also has investors from American company and Qualcomm and Honda.

My question, is it haram to be using Alibaba to get products for my Amazon company as it supports the Chinese economy which is being used to persecute Muslims. And does it apply to American and Israeli products.

Jazakallah

#3

Wasalam

May Allah bless you.

This is a very sensitive issue. The best thing is to avoid as much as possible supporting those involved in the persecution of Muslims. When you come to a situation like this, then follow what your heart tells you.
However, there are few things I would like to highlight:

  • Muslims providing direct support against innocent Muslims is not permissible
  • the issue comes when the support seems to be indirect. What I mean by indirect is when we are buying products from companies known or suspected to give money to a government who will then reinvest the money to persecute Muslims. In this scenario it might be tricky to get a clear answer. I don’t have kids so I can’t say from experience, but I know Muslims who buy baby product made by Johnson without feeling guilty about it. They tell me, the product offered by them is the best for the babies, as other products they have tried does not seem to adapt with their babies. So in this scenario it is difficult to say whether these Muslims are right or wrong.

The level of globalisation we are in is unprecedented. Commercial markets are interlinked, and to avoid dealing with these sort of companies are impossible at times.

I believe that ultimately, Muslims need to up their game. They must be innovative and produce products that can make us less dependent on those companies involved directly or indirectly with the persecution of Muslims.

Also we must be consistent. For example, if we have an issue with a supermarket selling certain type of products, then we must be showing our discontentment with Muslims shops that sell the same products. I remember few Ramadans ago, I saw a group of Muslims protesting outside of a supermarket who sell Coca Cola and other products. They were calling other Muslims to boycott the supermarket all together. However during that same period, I had seen major Muslims shops in the same locality selling the same products. Never I had seen a single person protesting or leaving flyers outside of those shops calling for their boycott.

Finally, we must not look down upon those Muslims who chose to buy or trade with certain of these companies. Neither we must think bad of those who chose not to buy anything from them.

May Allah guide us, protect us and help those of us who are being oppressed around the world. May He elevate their ranks in the Hereafter.

Aameen

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#4

I am an Amazon Seller. currently using FBA.
Amazon has its special day such as:
Prime Day, Black Friday, and Cyber Monday.

Prime Day is a discounted price for Prime member-only while Black Friday and Cyber Monday is for all customers.

Amazon tells the seller to provide a minimum 20% discount if a seller wants to participate on that special day.

my question: Is it Halal for me as a seller to participate in that event?

#5

Wasalam

May Allah bless you.

Yes it is permissible to offer this discount provided there are no other conditions that are non shariah compliant.

And Allah knows best!