Amazon FBA Wholesale Business Model

Amazon FBA Wholesale Business Model

Question:

AOA,

My question is regarding selling on the wholesale business model on Amazon. In this business model, we purchase inventory of a brand from a wholesaler and sell our inventory of the brand’s product on its listing page.

In this way, multiple suppliers attach to the product page/listing of the brand and start selling. The “buybox” / selling privilege rotates between the multiple sellers depending on a number of factors like price, shipping time etc.

Another feature employed by sellers is a “re-pricer” tool that automatically adjusts the price of the product depending on the market price and price offered by sellers of the same tool.  

Is this business model correct according to the sharia? What aspects are unlawful or hold doubt? What would be the correct way of working on the Amazon FBA wholesale business model.

JazakAllahuKhairun.

Abdullah Qureshi

Answer:

In the name of Allah, Most Compassionate, Most Merciful,

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Brother Abdullah Qureshi,

According to our understanding, the procedure of selling on the Amazon FBA (Fulfilment by Amazon) wholesale business model is as follows:[i]

1)  Seller purchases an inventory of goods in bulk at wholesale price directly from a manufacturer and receives the inventory.

2) Seller ships the inventory to Amazon’s warehouse for them to sort and store.

3) Seller posts the items on Amazon whilst using their marketing tools in order to generate sales.

4) If a customer purchases an item, Amazonpacksand ships the products on your behalf.

Based on the aforementioned procedure, it will be permissible for you to sell on the Amazon FBA wholesale business model.

And Allah Ta’āla Knows Best

Hammad Ibn Ismail Jogiat

Student - Darul Iftaa

Cambridge, Ontario, Canada

Checked and Approved by,

Mufti Ebrahim Desai.

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