Is Dropshipping Halal?

This article is a summary of the YouTube video ‘Is Dropshipping Halal?’ by Practical Islamic Finance

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Written by: Recapz Bot

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Dropshipping can be permissible when there is a reliable supplier.

Key Insights

  • Dropshipping is the practice of selling an item that the seller doesn't physically possess and then placing an order with a supplier to ship the product directly to the buyer.
  • Some consider dropshipping to be forbidden (haram) based on a hadith where the Prophet Muhammad advised against selling what one doesn't have.
  • However, the context of the hadith suggests that it refers to a situation where a person is unsure if a product is available, its price, or if they can retrieve it before committing to a sale.
  • The Prophet allowed selling items that are not currently possessed when there is a confirmed, reliable supplier in place beforehand.
  • This is supported by the example of dates being sold in Medina years before they actually existed.
  • If a dropshipper has a reliable supplier already identified prior to making a sale, dropshipping can be viewed as permissible (halal) from a religious perspective.

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The following is a transcript from a YouTube video discussing whether dropshipping is halal:

“Is dropshipping halal? Dropshipping involves selling an item you don’t have, then placing an order to ship the sold item to the buyer. Some think that dropshipping is haram because of the hadith wherein the Prophet, peace be upon him, said, ‘do not sell what is not with you.’

However, the context of this hadith was a person asking if he could sell something, then go to the market, figure out if it’s available, find out its price, buy it, and then deliver it. On the other hand, when a ready, willing, and able supplier was in place prior to the sale, the Prophet, peace be upon him, allowed selling what is not with you as evidenced by the sale of dates in Medina, which happened two to three years in advance, that is before the dates even existed.

So if the dropshipper has a ready, willing, and able supplier identified prior to the sale, then I am generally comfortable with dropshipping from a halal perspective.”

This article is a summary of the YouTube video ‘Is Dropshipping Halal?’ by Practical Islamic Finance