Model for Dropshipping

Investment Questions and Chats General Investment
#1

After reading the IFG article and watching the webinar, I’ve thought up a model which I would like some feedback on:

A denotes the buyer, B denotes the seller and C denotes the wholesaler/manufacturer.

Influenced by Mufti Faraz’s comment (11 July)

B creates a salam contract with A when A initiates a transaction.
B purchases from C as a normal transaction.
B takes responsibility for shipping and for the item to be sent directly to the customer.

There is a clearly written note that the product is dropshipped.
There is a clearly written note that refunds will be issued if the product is not as described or if there is an issue with delivery (thus B has assumed responsibility/liability for the item).
There is a clearly written note that delivery will take x (or up to x) days.

Would this be a Shari’a compliant model?
Can the notes be written in the T&Cs as suggested in the IFG view here or do they have to be written on the main page?

#2

Assalaamu alaykum,

The basic conditions of Salam are as follows:

  1. The contract is definite without an option to rescind.
    2.The product is properly specified.
  2. The product is a fungible.
  3. The contract is not for a specific item.
  4. The product is available in the market at the time of contract and, at the very least, at the time of delivery.
  5. The delivery of the product is deferred.
  6. The price is properly specified.
  7. The price is paid up in full at time of contract.
  8. The date and place of delivery are known. 10. The product is not replaced with a different product.

As long as you satisfy the above requirements, then the Salam contract would be fine in principle.

In terms of you acquiring possession, if you can take responsibility for the shipping and bear the expenses and take liability with the shipping agent is representing you, then this would be acceptable.

#3

Assalaamu alaykum

JazakAllah for your answer.

Regarding the last sentence,

Does that mean I cannot charge for delivery?

JazakAllah

#4

You can account for delivery in your overall price. The idea of bearing expenses was about ensuring you are the customer of the shipping company as opposed to anyone else. This would ensure they are your agent and your liability and possession would be realised subsequently.

Allah knows best

#5

Salamualikum,

Please can I get feedback on the below.

Buyer places an order to purchase a product.
Seller accepts the order but does not take payment. Seller lets buyer know that payment will not be requested until the product has reached the buyer.
Seller then buys the product from the supplier, supplier then sends the product to the seller’s fulfilment centre (a third party that then packages the product as per seller’s request), the fulfilment centre then sends the product to the buyer.
The buyer receives the product. The seller then requests payment from the buyer.

Would this be considered halal?

Jzk
Alaha

#6

Assalam o Alaikum Brother I just wanted to confirm because I’m also planning to do dropshipping so after reading your and mufti sahab’s reply in short I just have to pay the Chinese manufacturer in advance and also inform him that I’m gonna resell his product, then pay for the shipping of the product from the manufacturer to customer and as you said to inform the customer what going on in terms and condition section on the Shopify website. @Abdurrahmaan @Mufti_Faraz_Adam