Islam perfers Muslims not to get into legal dealings such as this. Borrowing and Lending can get people upset at each other and Islam isn’t about that.
Basically sis, you know you do not make most of the money on selling products. You know most money is made by getting others to join the group.
You also probably know that the later you get in, the harder it is to build a new ‘line’. So in a way, you make false promises to the people you recruit, knowing you promise them golden mountains, while in fact it is hard work, a lot of investing (in the products, in the trainings you’ll have to follow to become better) and a big question mark if they ever will succeed or even earn their initial investment back. You know some people have to lend money to start up, money they might never see back.
Idk if there is an Islamic ruling for this. I do know that you obviously do not feel comfortable. So just explain that it goes against your consience that you recruit people who have to make debts to start up. Maybe you can find a ruling on that side.
May Allah help you make the decision that is right for you!
Edit: ok sis, this might help you!
1) 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.
Arguments against MLM from an Islamic Perspective
Pyramid or endless-chain distributor schemes ask people to make an investment and, in return, grant them a license to recruit others who, in turn, recruit still others into the scheme. In essence, the investor pays for the opportunity to receive compensation when his or her recruit brings others into the scheme. The opportunity to recruit is the product.
Element of Fraud
Such schemes are illegal because they are fraudulent. There are many variants of pyramid schemes, such as, chain letters, Ponzi schemes. What is however, common to all such schemes is this: In all cases, people are enticed into making an investment of money and time by a false promise of returns that become increasingly unsustainable as more people are drawn into the scheme.
Element of Maysir
Another simple justification for denying Shariah approval to such games is that it is not in the public interest to have businesses that are recruitment-, rather than product-, centered. There are several practices or behaviors that indicate that a company and its agents are not product-centered but are rather recruitment-centered schemes — i.e., schemes promising participants easy money to be paid out of the investments of other participants instead of legitimate sales revenue.
There is a grave possibility that recruitment-centered companies or schemes aim to make “easy money” or what is condemned by Shariah as maisir. Therefore, they are not in the public interest and should be kept of an Islamic market.
Dubious Products
Many MLM products are relatively expensive compared to generic goods on the market. Requiring the sales force to purchase pricey products in order to retain status as an “active” distributor begins to look like a form of coercion applied to people who are not in a strong position to resist the pressure. Many participants have spent thousands of dollars buying the products from MLMs that supposedly were providing them with lucrative “business opportunities”.
The element of fraud in case of “pure” Pyramids is too apparent to be missed. The possibility of exploitation in case of Pyramids “adulterated” with product selling appears to revolt against a fundamental notion of Islamic ethics as enunciated in the holy Quran:
“Let there be trade among you with mutual goodwill” – (2:275)
Element of Ghabn
Further, a charge of over-pricing and profiteering has been labeled against many MLM schemes. Studies have found a large number of cases where price of MLM products exceed corresponding generic products available in a market by 100-300 percent! Such studies clearly raise the possibility of ghabn by the seller in the Islamic market. While the conclusions of empirical studies cannot be generalized because of time and spatial differences, the concerns must be investigated by the market regulator or at least by the potential Muslim participant before joining the MLM bandwagon.
Right to Exit & Rescind
Islam provides an option or khiyar to the buyer to rescind the transaction in all cases of goods sold by description. Such an option is however, hardly provided by MLM companies to their consumers who also join their sales force.
Possibility of Social Discord
MLMs encourage participants to sell product to family members and friends and/ or to recruit them into the MLM. This marketing strategy poses certain ethical difficulties. Participants, desperate to succeed at their new MLM business, may feel driven to pressure relatives and friends into buying cosmetics, water filters, jewelry, etc. In other words, MLMs can alter human relationships, encouraging people to “instrumentalize” relations rooted in love and affection. In the ultimate analysis, MLM raises the possibility of social discords and conflicts.
Comments on urgent! MLM question again »
Islam perfers Muslims not to get into legal dealings such as this. Borrowing and Lending can get people upset at each other and Islam isn’t about that.
Basically sis, you know you do not make most of the money on selling products. You know most money is made by getting others to join the group.
You also probably know that the later you get in, the harder it is to build a new ‘line’. So in a way, you make false promises to the people you recruit, knowing you promise them golden mountains, while in fact it is hard work, a lot of investing (in the products, in the trainings you’ll have to follow to become better) and a big question mark if they ever will succeed or even earn their initial investment back. You know some people have to lend money to start up, money they might never see back.
Idk if there is an Islamic ruling for this. I do know that you obviously do not feel comfortable. So just explain that it goes against your consience that you recruit people who have to make debts to start up. Maybe you can find a ruling on that side.
May Allah help you make the decision that is right for you!
Edit: ok sis, this might help you!
1) 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.
Arguments against MLM from an Islamic Perspective
Pyramid or endless-chain distributor schemes ask people to make an investment and, in return, grant them a license to recruit others who, in turn, recruit still others into the scheme. In essence, the investor pays for the opportunity to receive compensation when his or her recruit brings others into the scheme. The opportunity to recruit is the product.
Element of Fraud
Such schemes are illegal because they are fraudulent. There are many variants of pyramid schemes, such as, chain letters, Ponzi schemes. What is however, common to all such schemes is this: In all cases, people are enticed into making an investment of money and time by a false promise of returns that become increasingly unsustainable as more people are drawn into the scheme.
Element of Maysir
Another simple justification for denying Shariah approval to such games is that it is not in the public interest to have businesses that are recruitment-, rather than product-, centered. There are several practices or behaviors that indicate that a company and its agents are not product-centered but are rather recruitment-centered schemes — i.e., schemes promising participants easy money to be paid out of the investments of other participants instead of legitimate sales revenue.
There is a grave possibility that recruitment-centered companies or schemes aim to make “easy money” or what is condemned by Shariah as maisir. Therefore, they are not in the public interest and should be kept of an Islamic market.
Dubious Products
Many MLM products are relatively expensive compared to generic goods on the market. Requiring the sales force to purchase pricey products in order to retain status as an “active” distributor begins to look like a form of coercion applied to people who are not in a strong position to resist the pressure. Many participants have spent thousands of dollars buying the products from MLMs that supposedly were providing them with lucrative “business opportunities”.
The element of fraud in case of “pure” Pyramids is too apparent to be missed. The possibility of exploitation in case of Pyramids “adulterated” with product selling appears to revolt against a fundamental notion of Islamic ethics as enunciated in the holy Quran:
“Let there be trade among you with mutual goodwill” – (2:275)
Element of Ghabn
Further, a charge of over-pricing and profiteering has been labeled against many MLM schemes. Studies have found a large number of cases where price of MLM products exceed corresponding generic products available in a market by 100-300 percent! Such studies clearly raise the possibility of ghabn by the seller in the Islamic market. While the conclusions of empirical studies cannot be generalized because of time and spatial differences, the concerns must be investigated by the market regulator or at least by the potential Muslim participant before joining the MLM bandwagon.
Right to Exit & Rescind
Islam provides an option or khiyar to the buyer to rescind the transaction in all cases of goods sold by description. Such an option is however, hardly provided by MLM companies to their consumers who also join their sales force.
Possibility of Social Discord
MLMs encourage participants to sell product to family members and friends and/ or to recruit them into the MLM. This marketing strategy poses certain ethical difficulties. Participants, desperate to succeed at their new MLM business, may feel driven to pressure relatives and friends into buying cosmetics, water filters, jewelry, etc. In other words, MLMs can alter human relationships, encouraging people to “instrumentalize” relations rooted in love and affection. In the ultimate analysis, MLM raises the possibility of social discords and conflicts.
Maybe something here might help you!