THE MUHAMMAD SAW TRADING ETHICS

“Engage in trade, for nine-tenths of one’s livelihood comes from trade” (Hadith).

The title above is drawn from the Prophet’s counsel; in essence—become an entrepreneur. Prophet Muhammad was an entrepreneur, as were his wife and his companions. Islam itself arrived in the region through Muslim entrepreneurs from the Middle East and China who stopped here during their travels. By becoming entrepreneurs, we gain greater economic independence and find it easier to help others, seek knowledge, and perform acts of worship. We can emulate the self-reliance and entrepreneurial spirit of Prophet Muhammad.

In his youth, the Messenger of Allah worked as a shepherd, tending to the flocks of others. At the age of twelve, he began to follow the path of his people; his uncle, Abu Talib, invited him to join a trading caravan bound for the Levant (Ash-Sham).

The Messenger sold goods belonging to Khadijah in the Levant and received a share of the profits. The Quraysh tribe was renowned for its trading prowess; they traveled to Yemen in the winter and to the Levant (Syria) in the summer. Abdullah, the Prophet’s father, was also a merchant; he fell ill and passed away while returning from a trading journey to the Levant.

When the Messenger Muhammad was twenty-five years old, Abu Talib secured a job for him with Khadijah, the wealthiest businesswoman in Mecca at the time. Khadijah offered a wage of four camels. For the first time, our Prophet led a trading caravan along the major trade route connecting Yemen and the Levant. The venture was a resounding success, yielding profits far greater than any previous trading mission had achieved. Thus, at his core, our Prophet was a resilient and capable worker.

The Prophet’s entrepreneurial aptitude was cultivated early on through his work as a shepherd. He tended the sheep of the Quraysh while still very young, helping to lighten the financial burden borne by his uncle. He wished to earn an income and achieve self-reliance, rather than remaining idle or merely playing. As a merchant, Muhammad embodied four keys to business success: siddiq (truthfulness), amanah (trustworthiness), fathonah (intelligence, shrewdness, and an understanding of business management and strategy), and tabligh (the ability to communicate effectively and persuade associates or buyers).

The book “Muhammad as a Trader” by the Pakistani author Afzalurrahman offers comprehensive guidance on how a Muslim should conduct themselves regarding the spending and management of wealth—going far beyond simple buying and selling. Prophet Muhammad established foundations of ethics, morality, and work ethic that were ahead of their time. Islamic business ethics—characterized by openness and a commitment to satisfying business partners—are grounded in the principle of mutual benefit. These concepts align with modern principles such as customer orientation, the pursuit of excellence, competence, efficiency, transparency, and fair competition.

The way the Messenger of Allah conducted trade serves as an exemplary guide for us. In his 1978 book The 100: A Ranking of the Most Influential Persons in History, Michael Hart ranked him number one on the list. Hart stated, "...Muhammad was ‘supremely successful’ in both the religious and secular realms." Indeed, Muhammad achieved success in both religious and worldly affairs.

The Prophet Muhammad's reputation in the business world was reported by, among others, Ibnu Hisyam and Muhaddits Abdul Razzaq. When he reached adulthood, the Prophet chose work as a trader/entrepreneur. When he didn't have capital, he became a trade manager for investors (shohibul mal) based on profit sharing with a large Makkah investor: Khadijah. The Apostle four times led trading expeditions for Khadijah to Syria, Jorash, and Bahrain in the east of the Arabian Peninsula. For more than 20 years, the Prophet Muhammad SAW was active in the field of entrepreneurship (commerce), so that he was known in Yemen, Syria, Basrah, Iraq, Jordan and trading cities on the Arabian Peninsula.

Since before becoming the mudarib of Khadijah's property, the Prophet often made business trips, such as to the city of Busrah in Syria and Yemen. In Sirah Halabiyah it is said that he made four trade visits for Khadijah, two to Habsyah and two more to Jorasy, as well as to Yemen with Maisarah. He also made several trips to Bahrain and Abyssinia. The trade trip to Syria was Khadijah's fifth journey, in addition to her own journey - the sixth - including a trip undertaken with her uncle when the Prophet was 12 years old.

In his mid-30s, he was heavily involved in trading like most other traders. Three of the Prophet's trade trips after marriage have been recorded in history: first, a trade trip to Yemen, second, to Najd, and third to Najran. It is also said that in addition to these journeys, the Prophet was involved in large trade affairs, during the Hajj seasons, at the Ukaz and Dzul Majaz trade festivals. Meanwhile, during other seasons, the Prophet was busy taking care of the wholesale trade in the markets of Mecca.

In conducting his business, Prophet Muhammad applied sound and reliable management principles, ensuring his ventures were consistently profitable. He integrated management values ​​into both his personal life and business practices, expertly managing processes, transactions, and relationships with all stakeholders involved.

Regarding how he managed his business, Prof. Afzalur Rahman writes in the book Muhammad: A Trader: “Muhammad did his dealing honestly and fairly and never gave his customers cause to complain. He always kept his promise and delivered on time the goods of quality mutually agreed upon between the parties. He always showed a great sense of responsibility and integrity in dealing with other people.” He further notes: “His reputation as an honest and truthful trader was well established while he was still in his early youth.”

Based on Afzalur Rahman’s account, it is evident that Prophet Muhammad was a merchant who was honest and fair in establishing business agreements. He never gave his customers cause for complaint, and his reputation as an honest and truthful trader was widely recognized from his youth. Yet, for many merchants, "honesty" is often a difficult standard to uphold.

As a debtor, Prophet Muhammad never defaulted on his obligations to creditors. He frequently repaid debts before the due date—as demonstrated in the case of a 40-dirham loan from Abdullah ibn Abi Rabi‘. Often, the repayment exceeded the original loan amount as a gesture of appreciation toward the creditor. On one occasion, he borrowed a young camel and subsequently instructed Abu Rafi‘ to return it in the form of a fine, seven-year-old camel. He said, “Give him that camel, for the best among people is the one who repays his debt in the best manner” (Narrated by Muslim).

The art of trading involves more than just proficiency in arithmetic—addition, subtraction, and multiplication—which rely on the left brain (rationality). To succeed as a merchant, Ipo Santosa (2008), in the book Muhammad as a Merchant, highlights the necessity of utilizing the right brain. The right brain is associated with emotions, friendliness, sincerity, gratitude, and finding meaning in life. The Prophet demonstrated the effectiveness of this approach.

Deception is forbidden. The Quran contains a passage stating, "Allah has permitted trade." This means that Allah sanctions entrepreneurship and marketing.

Consider also the words of Robert T. Kiyosaki: "The rich seek and build networks, while the poor look for jobs." Why? In accordance with Metcalfe's Law, the value grows exponentially. Islam never hinders entrepreneurs from earning material wealth; rather, such wealth is the ultimate outcome achieved after navigating a process that prioritizes blessings, trust, and the strengthening of social ties.

Engage in trade to help others—specifically, to assist those in need. People will not make a purchase unless they have a need for the product. "The best of people are those who bring the greatest benefit and are most useful to others."

 

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