Drop Shipping

“Drop shipping” is a form of retail business in which the seller accepts customer orders without possessing stock on hand. Instead, the seller transfers the orders and their shipment details either to the manufacturer, a wholesaler, another retailer, or a fulfilment house, which then ships the goods directly to the customer.

The seller is responsible for marketing and selling the product, but has limited control over product quality, storage, inventory management, or shipping. It avoids the costs of maintaining warehouses or even a storefront, purchasing and storing inventory, and employing necessary staff for such functions.

According to our understanding, drop shipping is not a Shariah compliant transaction due to the seller not having possession of the item. A simple solution is that one may take a commission for selling the items on the proviso that the commission is fixed and known. In this way, the supplier will be selling the items to the client and the one who is advertising the products will receive a commission.