Buying products from multi-level marketing network
Fatwa No: 332797

  • Fatwa Date:27-8-2016 - Thul-Qi'dah 24, 1437
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Question

My question is about direct selling or multi-level marketing business. I saw many fatwas on your website that say that it is haram. However, I have some specific questions. So please do not give any question link. In our country, there is a company that uses a direct selling policy. Their product is very useful. So I want to buy their product.
1) If this policy is haram and we buy their good, then we are contributing on this haram. But their product is unique and very useful, so how can I buy it?
2) In MLM, there are levels. Suppose that I buy their product and automatically become a distributor. As the products are useful, I tell other people, and they also buy with my reference. Then can I take the commission on their purchases as I told them to buy it? If I only take the commission on my next level buyers, and not from all level buyers, would that be halal?
3) Is MLM always haram or is it permissible sometimes? What would the conditions be?
4) When I speak of this to MLM-related people, they give many logic arguments on their policy to make it halal. So I become confused. To learn about MLM in detail, could you please suggest any books or articles in English?
May Allaah reward you.

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, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.

Your question included several points to which we shall briefly answer as follows:

1- There is no harm in buying a product that is beneficial for the buyer for its regular market price. What is forbidden is to buy a product that the buyer does not need but only buys in order to join a multi-level marketing system. If the person buys a lawful commodity that he needs in return for its regular price, then there is no harm in that, and he is not obliged to market the company's products.

2- There is no harm if the marketing system of a company is lawful and a person wants to market its beneficial products in return for a commission.

Among the conditions for the lawfulness of an MLM system:

- There should be no membership fees charged or any sum paid to upgrade membership or the like.

- That the buyer buys a product for its benefit at its regular price, not merely to join the system.

- The commission of the participant in return for his efforts in marketing the company's products and inviting new clients should be known beforehand. Making his commission or part of it contingent on what the new participants that he brings in achieve is impermissible.

3- There are many forms of network marketing, and some companies are inclining towards developing systems that are compatible with the Islamic Sharee'ah and free of the prohibited and problematic aspects. Therefore, it cannot be said that all network marketing systems are generally unlawful; there are different types and conditions, although most of the network marketing systems involve Sharee'ah prohibitions, Gharar (risk and ambiguity) and Jahaalah (ignorance of monetary compensation). There is no doubt that there are endless lawful ways of earning a living and earning profits other than such prohibited or doubtful means.

The Prophet, sallallaahu ‘alayhi wa sallam, said, "That which is lawful is clear, and that which is unlawful is clear, and between the two are doubtful matters about which many people do not know. Thus, he who avoids doubtful matters clears himself in regard to his religion and his honor, but he who falls into doubtful matters (eventually) falls into that which is unlawful, like the shepherd who pastures around a sanctuary, all but grazing therein..." [Al-Bukhari and Muslim]

He, sallallaahu ‘alayhi wa sallam, also said, "The Holy Spirit (Gabriel) has inspired to me that no soul will die until it has completed its appointed term and received its provision in full, so fear Allaah and seek provision moderately." This hadeeth was cited by Abu Nu‘aym on the authority of Abu Umaamah  may  Allaah  be  pleased  with  him and Ibn Hajar attributed it to Ibn Abu Ad-Dunya and underlined that the version narrated on the authority of Ibn Mas'ood  may  Allaah  be  pleased  with  him has been declared saheeh (sound) by Al-Haakim.

Allaah knows best.

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