Salaam – Forward Sale – A permissible way of selling items which are not in stock/Drop-shipping

Q. I am a housewife and I run an online store from home. Sometimes I have stock to supply my customers and sometimes I do not have stock. I know that I cannot sell stock that I do not own or stock that I do not possess. My customers know that often times I do not have stock and I source it for them. What is the correct way to go about it?

A. In the enquired situation, you may provide the following two options to your customers purchasing from your online store;

Option 1: A sale of an item (In Stock/Possession – Bai’)

Option 2: A forward sale of an item (Out of Stock/Not in Possession- Salam)

In terms of option 1 above, it will not be permissible for you to sell an item if the item is not in stock/on hand or it is not in your possession.

In terms of option 2 above, it will be permissible for you to offer a forward sale (Salam) if the item is not in stock/on hand or it is not in your possession.

A forward sale (Salam) refers to a sale whereby the seller undertakes to supply the buyer with specific items at a future date in exchange of an advanced price paid on spot.

This type of sale is subject to certain terms and conditions. By way of an example, if a seller sells bags on his online store and he does not have stock of it, he may post an advertisement on his online store stating that he does not have the item in his possession whilst providing details of the species of the item i.e. bags (1), type of the item i.e. backpack (2), quality of the item i.e. new (3), quantity of the item i.e. one (4), date of delivery of the item i.e. 30th of November 2017 (5), the customer pays in full (6) and the item can be sold on a deferred basis i.e. it is not gold or silver etc. (7)

Based on the above specifications and details, it will be permissible to enter into a forward sale (Salam) transaction and the seller may source the item for the buyer. (Mukhtasarul-Qudoori 1/88)

Note: The above is a general guideline of conducting a forward sale (Salam). You may refer your case to a reliable Alim for advice as each case may differ from the other.

Allah Ta’ala Knows Best

Mufti Ismaeel Bassa