Message: Assalaam Alaikum.
Are multi-level marketing schemes (MLM’s) like Amway halaal or are they a form of Riba/Usury. The basic concept for some of these MLM’s is that as an individual you can earn money by selling products by yourself, but also make money through the sale of products done by people who you have recruited and who they in turn have also recruited and are selling.
Is this making money for nothing? Or is is Halaal that you are getting rewarded for having spread the sale of the product through your indirect actions? Jazakallah.
Wa Alaikum Assalaam,
الجواب و بالله التوفيق
Although an individual can earn money by selling products which is halal, monies in MLM schemes are also made when one recruits others and they in turn recruit others and it goes down the line. As long as those at the bottom keep on recruiting others under them, those at the top continue to reap the benefits and rewards. The bulk of the monies earned, and the major source of income is not from the product sold. Instead, it comes on account of the amount of persons recruited and those that they recruit further down the line.
These monies that are gained are not on account of sales, nor are they acquired through services done. In fact, recruiting others simply means to do a presentation before people and to encourage them to join the group. This is not done as a service for the company, nor is it done because one has been hired by the company. Instead, it is done solely for the sake of gaining money when one recruit others who can then recruit others, and they can recruit others, and it goes down the line, all becoming supporters and propagators of the company.
Therefore, there is no justifiable work done for earning such monies and benefits. It is also seen that those at the top continue to earn large profits from many levels of down liners, based on the sales and the clients which they are able to recruit. These benefits/monies earned are not based on the sale of products, services done, or even partnership investments. Hence, while purchasing products from the company in order to sell them and make a profit will be halal, earning monies/rewards/benefits on account of recruiting others and the sales they do, as well as those who they may recruit going lower down the line, will not be permissible.
And Allah Knows Best.
Mufti Waseem Khan.
28/1/16.