Question Summary:
Plywood business

Question Detail:

My friend is doing a business as a sub distributor of a new reputed plywood company, he takes plywood from an authorized distributor of same company and sales in shops,company gave him full support ,and also they ask him to introduce himself as the company staff ,but actually he is not. This is to avoid the delay payment by the dealer(shops) and also to attain the position in market.Shops also asking to him about that whether he is a direct staff or not ,this is because of shops doesn't need to pay any extra charge offered by the distributor( but there are actually 2 distributors between the company and the dealer or shops, both distributors taking an extra charge as there profit).So at the time of marketing he could need to tell the lie that the product is directly from the company,is it permissible for him to continue in this business?

Answer :

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
Honesty and truthfulness should be an integral part of a Muslim businessman’s dealings. There are ahadith which show the virtues of those who conduct their dealing with truthfulness[i] . Consider the following hadith:
«التَّاجِرُ الصَّدُوقُ الأَمِينُ مَعَ النَّبِيِّينَ، وَالصِّدِّيقِينَ، وَالشُّهَدَاءِ»
An honest and trustworthy trader will be with Ambiya, the truthful ones and the martyrs.
In the enquired case, it is understood that the authorised distributor is backing your friend in his initiative, however the retailers and other individuals purchasing from him do not want two middlemen involved between them and the manufacturer (Plywood Company). This will reduce their profit margin. It is not permissible for your friend to conduct business in this manner.[ii]
As an alternative, your friend should hire his services of marketing to the plywood company or to the authorised distributor and the company or the distributor should increase its profit mark-up in the products your friend markets. Thereafter the authorised dealer can give him a share from the sales he carries out. In this way, he will retain the equal amount of profits he was making and he will not have to lie.
And Allah Ta’ala Knows Best
Imran Patel
Student Darul Iftaa
Zambia
 
Checked and Approved by,
Mufti Ebrahim Desai.