703. Can I Sell An item Before Taking Possession?

By Asma bint Shameem 

In general, it is not permissible to sell an item before taking possession of it, and moving it from the manufacturer’s/wholesaler’s place, because of the following hadeeth:

Hakeem ibn Hizaam Radhi Allaahu anhu said:

“I asked the Prophet Sal Allaahu Alayhi wa Sallam: 

“O Messenger of Allaah, a man may come to me wanting to buy something that I do not possess, so I sell it to him then I buy it for him from the marketplace.”

He said: 

“Do not sell that which you do not possess.” 

(an-Nasa’i, Abu Dawood, and at-Tirmidhi: saheeh by al-Albani in Saheeh an-Nasa’i)

And Zayd ibn Thabit Radhi Allaahu anhu reported that the Prophet Sal Allaahu Alayhi wa Sallam “forbade selling an item where it was bought until the merchants move it to their own places.”(Ad-Daraqutni and Abu Dawood; hasan by al-Albaani in Saheeh Abi Dawood)

However, the following are among the permissible and acceptable ways in which the goods can be sold even when the seller does not own them:

1. The seller promises the customer that he will buy the item and take possession of it, then sell it to him. When the seller has bought it and taken possession of it, then he enters into the sale transaction and sends it to the customer.

2. The seller is allowed to act as an agent on behalf of the manufacturer/wholesaler, selling the item on behalf in return for a commission, or act as an agent on behalf of the purchaser, buying the item for him at the usual price, and agreeing with him on a fee in return.

3. Use the Salam transaction (payment in advance), whereby the seller sells the customer an item that is clearly described and defined, in such a way that there can be no cause for dispute, and commits to deliver to him at a specified time, on the condition that he receive the money from the customer when drawing up the contract.

And Allaah knows best.