Under What Conditions Is Network Marketing Permissible?

17 November, 2019
Q As-salaam `alaykum. Dear scholar, what are the conditions of network marketing?


Wa `alaykum as-Salamu wa Rahmatullahi wa Barakatuh.

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

All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.

In this fatwa:

Network marketing is permissible if:

1- The commodities sold or traded in are permissible;

2- The commission structure must be disclosed with full transparency;

3- General contract requirements are observed

In his response to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:

Any transaction that involves devouring people’s money without right is completely rejected. Almighty Allah says, {O you who believe! Squander not your wealth among yourselves in vanity, except it be a trade by mutual consent, and kill not one another. Lo! Allah is ever Merciful unto you.} (An-Nisaa’ 4:29)

Islam also makes it clear that the subject of transaction must not be something haram. And it must keep away from any form of deception or fraud. This reflects Islam’s concern on preserving people’s rights.

The Ruling on Network Marketing

The paramedic network marketing is permissible with the following three conditions:

1) The commodities sold or traded in are themselves permissible such as selling real goods. Hence, selling phony and prohibited goods makes the process prohibited.

2) The commission structure must be disclosed with full transparency to all new customers/members when they are invited. So they know when they join that the person who invites them has a stake in this invitation.

3) General contract requirements are observed, such as aptitude to contract, full description of the goods, clear delivery and payment process, etc. And if they sell goods that require special additional conditions such as gold that requires delivery and full payment at the time of contract, such additional conditions must also be satisfied.

If these three conditions are satisfied in this company you ask about, its transactions are then permissible.

Allah Almighty knows best.

Editor’s note: This fatwa is from Ask the Scholar’s archive and was originally published at an earlier date.