Is There A Limit On Resale Profit?

Answered by Shaykh Muhammad Carr

Question

Is there a limit on the amount of profit a reseller is permitted to charge when selling a product they have purchased?

Answer

In the Name of Allah, the Most Merciful and Compassionate.

You may factor your appraisal costs and profit margin into the price.

Generally, a sale is permissible for any price the buyer and seller agree upon. Allah says in the Quran,

“O believers! Do not devour one another’s wealth illegally, but rather trade by mutual consent. And do not kill (each other or) yourselves. Surely Allah is ever Merciful to you.” [Quran: 4,29]

Profit Ceiling

There is no ceiling to profit. In the Sunna, evidence shows the permissibility of making a 100% profit. In the hadith narrated by Bukhari and others, from ‘Urwa ibn al-Ja‘d, he said, “A shipment was brought to the Prophet (Allah bless him and grant him peace), so he gave me a dinar and said,

‘O ‘Urwa, go to the shipment and buy us a sheep.’

I went to the shipment, negotiated with the seller, and bought two sheep for one dinar. I then returned with them, and a man met and negotiated with me. I sold him one sheep for one dinar. I returned with the dinar and the sheep and said, ‘O Messenger of Allah, here is your dinar, and here is your sheep.’ The Prophet (Allah bless him and grant him peace) then said:

‘O Allah, bless him in this transaction of his.’” [Bukhari]

Reasonableness

While there is no ceiling on profits, you should strive to be as accommodating as possible. The Prophet (Allah bless him and grant him peace) said,

“May Allah have mercy on the person who is accommodating in buying and selling.” [Malik, Muwatta’]

I pray this is of benefit and that Allah guides us all.
[Shaykh] Muhammad Carr
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Muhammad Carr has dedicated his life to studying and transmitting our beautiful deen. His studies have taken him around the globe, where he has benefited from many luminaries. Under the guidance of his teachers – Shaykh Taha Karan, Shaykh Yaseen Abbas, Shaykh Muadh Ali, and many others – Shaykh Muhammad has grown to appreciate the beauty and benefits of diverse scholarship. He completed his memorization of the Qur’an at Dar al-Ulum Zakariyyah in September 1997 and received an Alimiyya Degree in 2006 from DUAI (Darul Ulum al-Arabiyyah al-Islamiyyah). He is also affiliated with Masjid Auwal in Bo Kaap, Cape Town (the oldest mosque in South Africa), where he serves as a co-imam, and Dar Al-Safa, where he has taught since 2018. As a teacher, he imparts the wisdom of our heritage and tradition by opening the door to students. As an imam, he has the unique opportunity to serve his community in daily life.

In addition to his roles as a teacher and imam, Shaykh Muhammad Carr has contributed significantly to the administrative and advisory aspects of Islamic institutions. Since 2023, he has served as the Administrative Director at The Imam Kurani Institute, contributing to the institution’s growth and development. He continues to pursue traditional Islamic Sciences, possessing a keen interest in Islamic Contract Law and Finance. Shaykh Muhammad has been a Shari‘a Board Member for Islamic Asset Management & Insurance Companies since 2001, aligning financial practices with Islamic principles.