Fatwa: Is Dropshipping/Drop Servicing Halal?

Assalamu alaikum brother,

What I mean is that I’ll take over the responsibility that the buyer will receive the exact product as described in the website and that if there is any issue I’ll fully refund the money paid by the buyer. Further more I will also try to offer tracking service of the parcel so that the customer will know where exactly their product is at any point once it leaves the factory

1 Like

@Mufti_Billal @Mufti_Faraz_Adam
Asalamu ailakum

When you say take responsibility of the shipping does this mean i have to set up the shipping or the supplier ships it on for me.

You should bear the costs and arrange it.

@Mufti_Faraz_Adam
So I just go on aliexpress where the supplier sells from and i order the item and I pay for it and i put the customers address in that counts as arranging it.

Does that process mean you bear the liability if something happens?

Assalamualaikum,

For what I understood from this article and Ulema’s view point, is that you either need to inform your customers that you are dropshipping or you take possession of the items before reselling it.

As a new to be dropshipper, I am glad that I have stumbled upon this article and have clarified my views, Alhumdulillah. However, I have come across few links and have few proposals to consider before I start this journey and would like your opinion on this matter.

A). Following to Ulema’s view and make terms and conditions page in the website as below,

This terms and conditions page is to provide buyer details on the services offered by Seller (us in this case, name of the website) and is only a draft.

1). Seller does not posses any item listed but has the software in sync with the supplier’s inventory to keep the buyer up to date.

2). Seller agrees to have an indefinite contract with the buyer and without the option to rescind in order to provide the items listed in the website as long as they were advertised and in stock.

3). Seller is liable for the delivery of items and the delivery times (link to the Shipping and Delivery page).

4). The buyer is responsible to provide correct address place for delivery.

5). Seller is responsible to provide full descriptions and pricing of the items and is liable to provide the exact item that was purchased.

6). Seller will replace or provide another item during the dispute only after the consent of the buyer.

7). Buyer has to pay in full during the visit of the Seller and Seller is responsible to inform the buyers regarding the Shipping costs which needs to be paid by the buyer.

8). Buyer has the right to return or ask for refund of the item as per the Return and Refund policy (link to the Return and Refund page).

9). Seller is liable to provide correct and truthful information to the buyer.

10). Seller is responsible to make sure that the products are fungible and are replaceable by another identical item, mutually interchangeable.

Before I summarize below, I would like to highlight this, that the above terms and conditions (T&C) will be made mandatory and available during the registration process where the user has to check ‘I have read Terms and Conditions’ and then can register. For non registered users who are going to pay without registering, this will be made mandatory option (T&C) to check during the check out process. The link will be displayed on all pages in the footer so the buyer is aware of this.

Summary: The above option states we are not in posession, we dont charge them shipping and we mentioned through our software regarding the delivery days. From the customer viewpoint, we are liable for the product and Shipping. From our viewpoint the supplier is liable for the product and shipping. Refunds and returns (disputes) are manageable and depends on the supplier. From our side we need to choose the supplier that has such policy.

B). Another view point that was mentioned was to actually own the item before resell and below is my opinion,

1). There are some professionals who are known as dropshipping agents. You hire them and they are responsible for bulk purchase, keeping the inventory, testing and shipping of the items. Once the order has been received from the buyer, we send the details to the agent and they ship it to the customers. Since we hire them and they make bulk purchase of the product before reselling, this seems to be permissible as we become owners first. However, this could also be a little expensive as you might need to give them credit before hand to buy the items.

Summary: The above option is where we are in posession of items via an agent, we charge them shipping and we mentioned through our software regarding the delivery days. From the customer viewpoint, we are liable for the product and shipping. From our viewpoint, agent is liable for the product inventory and shipping. Refunds and returns (disputes) are managed via hired agent who then deal with the supplier for you.

C). Another view point is to have a contract with the Shipping company.

1). There are some companies who provide Shipping only. The process is like this, our software is in sync with the supplier (for the inventory) and the shipping company (for the shipping). The buyer buys the items from us, our software automatically sends the order to the shipping company, they source and ship it to the buyer. We pay the shipping company monthly subscription fee or pay as you go fee.

Summary: The above option is where we are not in possession of items but we are in charge of shipping. We charge them shipping and we mentioned through our software regarding the delivery days. From the customer viewpoint, We are liable for the product and shipping. From our viewpoint, Supplier is liable for the product and Shipping companies are liable for the Shipping. Refunds and returns (disputes) are manageable as they usually provide such policy.

D). One last view point is when we source and ship through the 3rd party rather than the supplier.

1). There are 3rd party companies that source the product direct from the supplier into their warehouses and takes care of the shipping and are dropshipping friendly. When the user buys from you, the order goes to the 3rd party, they ship and also have shipping cost that can either be paid by the buyer or is included in the item. We come in service agreement with the 3rd party by paying them monthly subscription charges.

Summary: The above option is where we are not in posession of the items and the shipping. We pay 3rd parties monthly fees and they do the rest. From the customer viewpoint, we are liable for the products and shipping and from our viewpoint the 3rd party companies are also liable for the products and shipping. Refunds and returns (disputes) are easily manageable as they do have such policy in place.

Please review and let me know if I have missed any option(s) for them to be sharia compliant. Also please let me know if my approach towards it is correct.

CC: @Mufti_Faraz_Adam @Mufti_Billal

Regards,
AB.

@Mufti_Faraz_Adam if somthing happens to the order i refund the customer

@Mufti_Billal @Mufti_Faraz_Adam
Assalamualaikum,
I know my post is lengthy but please bare with me and I would really appreciate it if you can just spare few minutes to read and provide me with your valuable comments.
Jazak Allah.
Regards,
AB.


السلام عليكم طبقا لهذا الفيديو هل يعتبر الدروب شيبنج حلال اذا تم الالتزام بما قاله مقدم المقطع المرئي واذا كان هناك أي خطأ في كلامه؟

هل اذا وضحت في الجزء الخاص بسياسات البيع أنني لا أملك المنتجات التي أعرضها هل هكذا أكون دخلت في باب السمسره
الجائز واذا كان ذلك صحيحا هل يجب أن أوضح للمشتري وللمورد هامش ربحي
وأعتذر علي الاطاله

السلام عليكم أخي الكريم

لدينا مناقشة طويلة حول هذا الموضوع. يمكنك مشاهدة الرابط التالي

معذرة ولكن لغتي الانجليزيه ضعيفه و لقد حاولت أن أقرأ هذا النقاش ولكن لم أفهم شئ فهل تتفضلوا علي بالأجابه وجزاكم الله خيرا

هل يمكن أن يجيب علي سؤالي أي أحد يا جماعة الخير

ليس لدينا حاليًا رأي حول هذا السؤال. نحن لا نزال نبحث عن حل متوافق مع الشريعة

وفقكم الله وسدد رأيكم

السلام عليكم

Having seen your discussion on Dropshipping, this is a technical proposal:

  • A statement is posted in the Home Page stating that the items are sourced and are NOT with the seller.
  • Against Each Item, the wholesaler’s available qty in stock is also shown with the item, and it updates automatically.
  • After the user enters his Credit Card Detail (or any other online payment option) and Upon him Pressing the “BUY” button, the following occurs in this sequence:
    1- The Item is Purchased by the Seller from the Manufacturer.
    2- Once the Purchase is accepted (electronically), the Customer gets charged for the item (cost + Seller’s Markup whatever it is!)

With respect to defining risk and responsibility, this could be defined in the Terms&Conditions allocated the whole responsibility on the Seller, with a 100% money back Guarantee if the goods are not to the satisfaction of the Customer (Risk on the seller). The Product is directly shipped from the Manufacturer to the Customer, saving him money in double shipping and handling.

Wouldn’t the above address Shariaa compliance (at least the Hanafi School of Fiqh?).

BTW, Would your opinion also apply to services, e.g. App Development, Ad Campaigns, Media Creations and marketing, and all sorts of services requiring EFFORT and Creative Works? What about a carpenter who agrees with you to make a Kitchen Table? what if he doesn’t have the required raw materials yet? What if he gets his money upfront? is that Haram? What About if we Order a Pizza and Pay online? Obviously, the Pizza is not yet made when the Payment was effected? Many similar transactions come to mind where a service provider gets paid 100% before even providing the service (e.g. Pay for Electricity Connection First, before power is even connected).

Please advise.
و جزاكم الله خير.

Assalaamu alaykum,

How would a the buy order from the customer result in the seller purchasing the item from the manufacturer?

And is the payment from the customer happening at point 2?

@Mufti_Faraz_Adam when you say i cover the liability does that mean if something happens to the order I refund it or send a replacement.

Assalaamu alaykum, for ease of referece to all others, here’s below an extract:
(After the user enters his Credit Card Detail (or any other online payment option) and Upon him Pressing the “BUY” button, the following occurs in this sequence:
1- The Item is Purchased by the Seller from the Manufacturer.
2- Once the Purchase is accepted (electronically), the Customer gets charged for the item (cost + Seller’s Markup whatever it is!)

I agree with you. Normally, when the buyer clicks on the “BUY” Button, the transaction occurs and his payment is effected. Nevertheless, what I’m proposing is to CUSTOMIZE this button (php, html, .asp, jscript, etc) so that the online PURCHASE is Done and confirmed by the Manufacturer prior to executing the transaction and collection payment from the Customer. Basically, this is a technical solution to Buy before we Sell!

As stated earlier, the Seller takes full responsibility for delivery, and 100% Money Back Guarantee if anything went wrong. Would this be Shariah Compliant?

Jazakum Allah Khair.


السلام عليكم طبقا لهذا الفيديو هل يعتبر الدروب شيبنج حلال اذا تم الالتزام بما قاله مقدم المقطع المرئي واذا كان هناك أي خطأ في كلامه؟

هل اذا وضحت في الجزء الخاص بسياسات البيع أنني لا أملك المنتجات التي أعرضها هل هكذا أكون دخلت في باب السمسره
الجائز واذا كان ذلك صحيحا هل يجب أن أوضح للمشتري وللمورد هامش ربحي
وأعتذر علي الاطاله

after reading the previous article about dropshipping, one must ask himself what should be done to make it permissible and so I did. I intend to become a dropshipper but first, I need to know if this little tweaks will make dropshipping allowable, please help me:

  1. firstly, as stated in the former article, there are two problems concerning dropshipping; ownership and possession. to overcome those, It occurred to me the following solution: reach out to a supplier from whom you will purchase bulk for the product, warehouse it at some logistic company, and when you make orders, the warehouse who possibly has its own shipping company will ship the products to the customer in behalf of you.
  2. secondly, as a result of the current circumstances of coronavirus, it is impossible to predict exactly when the customer shall receive his products, on the other hand, it is easier to give him an interval of time (i.g. 7-15 days); is that permissible?
  3. finally, if the product is damaged or delayed, the customer shall choose between having his money back or demanding another product which he gets for free. after all, customer’s happiness is of the utmost importance in dropshipping.
    those are the three problems I hope you help me with.
    May Allah bless you