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