Is it permissible to work with the DXN company?

Answered according to Hanafi Fiqh by Askimam.org

Assalamu alaikum

Mufti Sb, DXN is a food supplements company having branches in 172 countries including S. Africa. The products are so good that more than thousands have been cured so far. 

Unlike other mlm, here the new customer who just joined also getting the product i.e. toothpaste, soap, massage oil, coffee etc as per the value of his purchase. So there is no cheating involved. 

On the other hand if we give these items to someone new and make them member then we get some percentage of commission from their purchase. 

Basically they are avoiding the chain of distributors, retailers etc and so many middle men and this benefit is being distributed among the members.

For example a soap actual production cost is 50 Rs but passing through distributor, retailer, shops etc and finally it reach the customer at Rs 100 i.e 50 Rs more. This co. DXN is eliminating all the middle men and selling the product at the same final rate of Rs 100/- i.e the rate of shop but this 50 Rs extra he is distributing among the members. 

I think there is no gambling, no cheating at all because the customer has already received the product immediately whatever he has paid and anytime he can quit if he wants. Moreover he is getting little commission for selling to new people under his umbrella. All DXN products are Halal. 

Based on these facts is this permissible or not, keeping in view that this is not a Ponzi scheme. Most of the governments are supporting to start factories in their country. Telangana govt has given 5000 acres of land in Medak district, Hyderabad to start USD 250 Million DXN factory which will open in 3-4 months. 

Please reply to clear our doubts. 

Jazak Allah Khair

 

Answer

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

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

Brother in Islam,

DXN, is a Multi-level marketing (MLM) company. Multi-level marketing is a strategy which is used by companies to encourage their distributors/members to recruit new distributors/members 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.

In order to become a distributer/ member all or most “MLM” companies charge a fee for joining or stipulate that one must buy a certain product in order to be able to engage in marketing and to earn commission. [1][2]  

In most cases “MLM” companies are based on impermissible elements such as gambling, interest, ambiguity, deception and conditional sales. [3]

 However, it will be inappropriate for us to issue a ruling for or against the “DXN” company without reviewing their contract.

There are various different types and levels of the Multi-Level Marketing. You have not provided enough details on the contract itself. Kindly send us a copy of the distributorship agreement and application form.

We also advise you to obtain proper financial advice regarding the legitimacy of the scheme especially in view of other multi-level marketing scams.

You may forward the contract to the following email address [email protected]. Ref (Ahmad Patel)

And Allah Ta’āla Knows Best

Ahmad Patel

Student Darul Iftaa

South Africa

Checked and Approved by,
Mufti Ebrahim Desai.


[1] https://en.wikipedia.org/wiki/Multi-level_marketing#targetText=Multi%2Dlevel%20marketing%20(MLM),or%20binary%20compensation%20commission%20system.

[2] file:///C:/Users/User/Downloads/Multi-Level_Marketing_From_Islamic_Persp.pdf

[3] فقه البيوع (2/812)

 

 

 

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