Category: Business Matters
Fatwa#: 38477
Asked Country: India

Answered Date: Feb 17,2018

Title: Is multi-level marketing permissible

Question

Assalamu alaikum warahmatullahi wabarakatuhu, I want to know about a business called multi level marketing (MLM) for a company named "Q Net". The business process involves first we have to become the customer of company by purchasing products like watches , beauty products, medicines , education packages and tour packages etc... of the Qnet Company (worth 1,00,000 rupees).Then we have add two more persons to the company as customers by same process as some represenatative said to me and added me.Then for adding that two customers from my link (down link to me), company will give me some commission and they both have to add two persons as customers as the link spreads the number of customers added under my downlink i will earn money as they have started from my link. The process continues. Here the company is getting 72% of healthy profits in which it share 50% of profits to customers like me and 12% profit shares to the organizatio ns like mother theresa trust , RCM , some temples and some masjids etc... To help the needy and remaining 10% comapany taking as profits. Here as represenatative or exsisting costumer said to me that no Interest money( Sood ) is being added here. So I want to know that whether this business is Halal or Haraam . Please explain me in details. Hope i will get the clear idea from you mufti sahad.. Jazakallah....

Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Multi-level marketing is a strategy which is used by companies to encourage their existing distributors to recruit new distributors by paying the existing distributors a percentage of their recruits’ sales; the recruits are known as a distributor’s “downline”. All distributors also make money through direct sales of products to customers.[1]

In the case of your business, it is not permissible to make purchasing products a condition for entering into MLM. Therefore, this business is not halal.[2]

We advise you to seek other forms of halal sustenance.

And Allah Ta’āla Knows Best

Saad Haque

Student Darul Iftaa
New Jersey, USA 

Checked and Approved by,
Mufti Ebrahim Desai.

 



[1] Sourced and edited;

http://www.investopedia.com/terms/m/multi-level-marketing.asp (last accessed 2/15/18)

 

[2] فقه البيوع (٢/٨١٢)

ان كان البيع المنتج مشروطا بان يدخل المشترى فى شبكة التسويق فهذا البيع فاسد لاشتراط ما لا يقتضيه العقد

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