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Commission Based Entrepreneurship

Answered as per Hanafi Fiqh by Mathabah.org

Answered by Shaykh Yūsuf Badāt

Question:

Would this form of commission be allowed in Islam?

Employer (owner of merchandise) tasks employees (agents) with selling merch. They are relatively free where, how and the price for which they sell. However, the owner requires a minimum amount from each item (eg. £10). When the agents sells the merchandise, the initial agreed amount is the owner’s and the remaining is theirs. So, if the merch is sold for £11 then the owner gets £10 and agent gets £1. If the same item sells for £50, the owner gets £10 and the agent gets £40. Agents are prohibited to sell items lower than £10 or whatever the set minimum for each item is. Would such an arrangement be (permissible)?

Answer:

بِسْمِ اللهِ الرَّحْمنِ الرَّحِيْم

In the name of Allāh, Most Gracious, Most Merciful.

Jazāk Allāh Khayr/ Thank you for contacting Mathabah Institute.

Yes, it is permissible for a business owner to instruct an agent or broker to sell a commodity for a specific price and have the agent keep whatever profit is made. – (See: Rad Al-Muḥtār, Vol 6, Page 63, Dār Al-Fikr[1])

Ibn ‘Abbās (may Allāh be pleased with him) said, “There is no objection to say, “Sell this cloth and whatever is above and beyond this amount is yours.” Imām Ibn Sirīn said, “When a seller says, “Sell it for this amount and whatever profit [is made] is yours; or we will share the profit amongst us, there is nothing wrong.” The Prophet (peace and blessings be upon him) said, “Muslims are bound by the conditions amongst themselves.” – (See: Fayḍ Al-Bārīy ‘Alā Ṣaḥīḥ Al-Bukhārī, Vol 3, Page 514, Dār Al-Kutub Al-‘Ilmiyyah)[2]

‏Qays bin Abī Gharazah said, “In Madīnah we used to buy and sell wasqs [loads of goods], and we used to call ourselves samāsir (brokers). The people called us that. The Messenger of Allāh came out to us one day, and called us by a name that was better than that which we called ourselves and which the people called us. He said, “O tujjār (traders), your selling [sometimes] involves oaths and false [advertising], so mix some charity with it.” – (Nasa’i 3800)[3]

Only Allāh knows best


[1] وَفِي الْحَاوِي سُئِلَ مُحَمَّدُ بْنُ سَلَمَةَ عَنْ أُجْرَةِ السِّمْسَارِ فَقَالَ أَرْجُو أَنَّهُ لَا بَأْسَ بِهِ وَإِنْ كَانَ فِي الْأَصْلِ فَاسِدًا لِكَثْرَةِ التَّعَامُلِ وَكَثِيرٌ مِنْ هَذَا غَيْرُ جَائِزٍ، فَجَوَّزُوهُ لِحَاجَةِ النَّاسِ إلَيْهِ كَدُخُولِ الْحَمَّامِ وَعَنْهُ قَالَ رَأَيْتُ ابْنَ شُجَاعٍ يُقَاطِعُ نَسَّاجًا يَنْسِجُ لَهُ ثِيَابًا فِي كُلِّ سَنَةٍ – كتاب الدر المختار وحاشية ابن عابدين ج٦/ ص٦٣ دار الفكر

[2] وَقَالَ ابْنُ عَبَّاسٍ لاَ بَأْسَ أَنْ يَقُولَ بِعْ هَذَا الثَّوْبَ فَمَا زَادَ عَلَى كَذَا وَكَذَا فَهُوَ لَكَ وَقَالَ ابْنُ سِيرِينَ إِذَا قَالَ بِعْهُ بِكَذَا فَمَا كَانَ مِنْ رِبْحٍ فَهْوَ لَكَ أَوْ بَيْنِى وَبَيْنَكَ فَلاَ بَأْسَ بِهِ وَقَالَ النَّبِىُّ صلى الله عليه وسلم الْمُسْلِمُونَ عِنْدَ شُرُوطِهِمْ – كتاب فيض الباري على صحيح البخاري ج٣/ ص ٥١٤ دار الكتب العلمية

[3] عَنْ قَيْسِ بْنِ أَبِي غَرَزَةَ قَالَ كُنَّا بِالْمَدِينَةِ نَبِيعُ الأَوْسَاقَ وَنَبْتَاعُهَا وَكُنَّا نُسَمِّي أَنْفُسَنَا السَّمَاسِرَةَ وَيُسَمِّينَا النَّاسُ فَخَرَجَ إِلَيْنَا رَسُولُ اللَّهِ صلى الله عليه وسلم ذَاتَ يَوْمٍ فَسَمَّانَا بِاسْمٍ هُوَ خَيْرٌ مِنَ الَّذِي سَمَّيْنَا أَنْفُسَنَا وَسَمَّانَا النَّاسُ فَقَالَ يَا مَعْشَرَ التُّجَّارِ إِنَّهُ يَشْهَدُ بَيْعَكُمُ الْحَلِفُ وَالْكَذِبُ فَشُوبُوهُ بِالصَّدَقَةِ – رواه النسائي ٣٨٠٠

This answer was collected from Mathabah.org. It’s an Islamic educational institute based in Canada. The questions are generally answered by Sheikh Yusuf Badat and Sheikh Omar Subedar.