Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh.  (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

Dear Brother,

We are dealing in the products that is totally based on utiliy price. We sell our product at the price of 3 to 4 times higher then our cost price. When  we offer our product at a lesser price then our consumer  consider the same product as of inferior quality and they abstain from buying product from us. Please advise me acording to islamic rules & regulation what should be the right price in terms of our cost price to sell price. 

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Answer:

Right price in terms of Cost price to Selling Price

In the name of Allah, We praise Him, seek His help and ask for His  forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is no one (no idol, no person, no grave, no prophet, no imam, no dai, nobody!) worthy of worship but Allah Alone, and we bear witness that Muhammad(saws) is His slave-servant and the seal of His Messengers.

On most items or products, there is absolutely no limit in Shariah to the percentage of profit a trader may take on his goods. If the product is unique, and the trader thinks that he might be able to offer his product at even 100 times his cost price, there is no harm in his taking these profits.

What Islam guides against is taking advantage of people at their times of severe need, and charging them a superficially high price for indispensable products, like food during a famine, or a particular medicine, etc. It is forbidden for a trader to hoard indispensable products like food during a famine, or hoard these indispensable products with the intention to monopolize them and extort a superficially high price for them when none is available in the market. But on most products which are dispensable and non-monopolyistic in nature, one may charge any amount of profit one wishes.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me. Allah Alone Knows Best and He is the Only Source of Strength.

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