Fair competition between traders is permissible

14-3-2011 | IslamWeb

Question:

i am starting a business and i just want to ask some rules of business in islam: 1) is it okay to look in other shops near you you too see what they are are selling and how well they are selling without telling them and selling the same thing at a lower price is this healthy competition or cheating? 2) is it okay to buy from someone and sell it forward at a higher price without the person you are buying from knowing that you are going to buy it from them for the purpose of selling it on, or knowing where you are going to sell it

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Answer:

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.

It is permissible to do what you mentioned that you want to find out the best selling goods in the nearby shops or any other shops and then sell them at a lower price than them; this is indeed the essence of trade as everyone is keen to obtain profit and compete with other tradesmen.

‘Umar once ordered Haatib Ibn Abi Balta’ah to sell (his goods) at market price, then he held himself accountable for what he had said to him and then told him: “What I told you is neither according to my knowledge nor as a judgment (issued for you); rather, it is something by which I wanted good for the people of the country, so you may sell wherever you wish and at whatever price you wish.” [Ash-Shaafi’i and Al-Bayhaqi]

Also, it is permissible for you to buy goods while intending to sell them at a higher price and you are not obliged to inform the seller of your intention (to sell them).

Allaah Knows best.