Sun 20 Jm2 1435 - 20 April 2014
143532

Buying an item for a certain price and selling it for double the price

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What is the shar‘i ruling on a financial transaction which involves buying an item (a computer) from me for a certain amount of money which he will give to me after he sells the computer; he will sell it to another person for twice the amount of money he gave me, then after that he will give me what I am entitled to in full. Is this transaction permissible?.

Praise be to Allaah.

There is nothing wrong with you selling an item to someone who buys it with the price to be paid later on, then he sells it for however much he wants, then he pays you the price, because Allah says (interpretation of the meaning):

“Allaah has permitted trading and forbidden Riba”

[al-Baqarah 2:275]

This way is the most widespread form of trade. Retailers usually buy on credit, then they pay off the price after they sell the items. 

But with regard to this transaction it is stipulated that the buyer should take the product from you and move it from your store or place before he sells it to someone else, because of the report narrated by al-Daaraqutni and Abu Dawood (3499) from Zayd ibn Thaabit, that the Prophet (blessings and peace of Allah be upon him) forbade selling goods where they were bought, before the merchants moved them to their places.

This hadeeth was classed as hasan by al-Albaani in Saheeh Abi Dawood

Secondly: 

There is no specific limit to profit according to sharee‘ah. So it is permissible for the one who buys an item from you to sell it for double the price, on condition that he does not take advantage of the purchaser’s heedlessness or ignorance of prices. 

See the answer to question number 143067

And Allah knows best.

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