Multi-Level Marketing (MLM) in the light of Quran
The basis of any Scam is telling people what they want to hear! When something is too good to be true, it probably is a SCAM!
Great news for people who want to work from Home! With flexible working hours as per your needs!
Be your own boss & Get rich quickly with income as high as $ 2000 per week
Earn handsome income while giving time to your family and be a stay at home mother!
We have helped thousands of housewives, unemployed and working people To Switch It Up and Become Entrepreneurs, With No Previous Experience
Etc. etc. etc.
When something is too good to be true, it probably is a Scam; a gimmick and you really need to question it! With key marketing attractions or gimmicks including one or more of the combinations as mentioned above, this is an example of Multi-level Marketing. Worldwide but especially here in Canada and these challenging times have witnessed a growing and worrying trend of Multi-level marketing (MLM) especially more prevalent amongst us as Muslim Women. MLM is not allowed as per Quran’s very clear directives. We will come to the reasons but first let’s understand what is an MLM.
Multi-level marketing (MLM), also called ‘Network marketing’, ‘Direct selling’, ‘Word-of-mouth marketing’, ‘Interactive distribution’ or ‘Relationship marketing’, is a marketing strategy for the sale of products/services where the company’s revenues are derived from two major sources as follows.
1) Retails Sales: Through the sales of the company’s products and services, each participant/member gets a compensation as a percentage of sales for example every $100 of sales would get you a commission, let’s say $1 as sales commission.
2) Recruitments: This is where the whole emphasis is placed in an MLM company. So every time you ‘recruit’ another person in the system, he/she is expected to pay an upfront entry fee. This Entry fee has different names in different MLMs setup, “a one-time registration fee”; “a business start-up fee”; an “initial investment fee to start your own business”; “training and development fee” etc. For instance; it could be $500 of registration fee which every new recruit has to pay to enter the MLM company/network or to be eligible to sell MLM’s products or services.
It is through the Recruitment channel, that the MLM company really makes money from. It is income derived from this channel of recruitment which is not allowed and prohibited as per Quran. Whenever a new ‘recruit’ is hired and he/she pays this recruitment fee (for e.g. $500); each and every member above that person in the existing hierarchy gets a percentage share out of that $500. How much you get depends on your placement in that pyramid. The higher up you are, which is based on the number of recruits working under you and their sales, the higher your share will be out of that $500. So basically; in a nutshell, you are earning at the cost of someone else’s money, without making any effort to earn that money.
MLM model has been a huge success because downline and new members are manipulated to believe that they can achieve large returns which is unrealistic and not possible for majority of MLM members. The overwhelming majority, as many as 99%, of MLM members work at either insignificant profit; or breakeven, i.e. cover their investment; or must operate at a net loss so that the few individuals in the uppermost level of the MLM pyramid can develop their significant earnings. The earnings of these top few members are highlighted and celebrated at MLM company’s seminars and sales conferences, which creates an illusion: a false hope of becoming rich or financially successful without having to do anything and mostly focusing to recruit more members in order to get easy money. This is basically manipulating and deceiving members and new recruits for the benefits of few top-level members at the cost of the vast majority.
[Surat Hud 11:85] O my people! Give full measure and weigh with justice. Do not defraud people of their property/wealth, nor go about spreading corruption in the land.
Quran gives immense importance in gaining wealth through hard work and fair means. It places great emphasis on making money through lawful ways and prohibits manipulating and defrauding people or deceiving people in order to earn money.
[Surat l’Araf 07:33] Say: the things that my Lord has indeed forbidden are immoral and shameful deeds, whether open or secret; and the وَ الۡاِثۡمَ sin/crimes and transgressing beyond boundaries and going against Haq; assigning of partners to Allah, for which He has given no authority and saying things about/from Allah of which you have no knowledge.
Although the above Ayah identifies many things that are prohibited as per Quran, but for the purpose of current area of focus i.e. MLM, please note the word Al’As’m with word Root Word , م, ث ا, meaning Sins/crimes of all types. It also means earning such wealth, power, luxury or comfort, without Haq, that one gets without earning it or without making any efforts for it. For instance; if your Uncle has left you wealth in his Will, you get that wealth without making any effort but that is your Haq. Getting any wealth, comfort, luxury, money or power without making any efforts for it or without earning for it, without Haq, is not only a crime as per Quran, it is considered as Haram or prohibited. This is the reason why earning money through gambling is Haram and prohibited in accordance with Quranic guidance. As per Quran we can not get any wealth, money, comfort or luxury, without Haq, unless we strive for it.
[Surat L’Najm 53:39-40] That nothing belongs to man except what he strives for, and that his effort is going to be seen
When a person enters the MLM network as a new recruit, that person has been deceived and manipulated into believing that he/she will make huge money in no time. Additionally, when we recruit a new person in the MLM and we earn even a percentage share out of the initial registration/upfront fee paid by the new recruit, that money is without Haq and we are getting that money without making any efforts for it and also at the cost of deceiving and manipulating someone’s mind. Since the MLM company’s whole foundation is built on the recruitment and deception, as a major source of revenue which is HARAM / Prohibited, one should avoid such companies at all costs. Even if one is not doing any recruitment, i.e. not hiring any new member for the MLM and does not have any downline recruits/members working him/her. Even if this person is working as a non-salaried commission-based sales person only by selling the company’s products and services, although the income is achieved through fair means, but that person is actually supporting a network which is build against the foundations of basic Haq and Justice. Therefore, we must avoid to be associated with such company in any manner whatsoever.
[Surat Al-Nahl 16:90] Indeed, Allah orders justice and good conduct (Ahsan) and giving to relatives and forbids Fahasha and Munkr and Baghi. He admonishes you that perhaps you will be reminded.
Please notice the word Munkr in the above-mentioned Ayat. Munkr with Root Word ر , ک, ن, as per Quran also means a very cunning person with focus on wealth collection and retention, a miser person, one hoards wealth; someone who is extremely selfish so much so that in order to safeguard his/her own personal interest or to earn money/wealth, the person would even go to an extreme as much as depriving others of their due right or deceiving others. This is Haram/prohibited as per Quran’s very explicit Ayat.
[5:62] You see many of them actively engaged in sin and aggression, and consuming illicit gains. Surely, evil is what they have been doing.
According to a report that studied the business models of 350 MLMs, published on the Federal Trade Commission’s website, at least 99% of people who join MLM companies lose money. So basically, those who are earning earn at the cost of others, i.e. by going against someone’s due right, or by deceiving and manipulating others, especially through new recruitments. As per Quran, consuming only what is lawful and good, and abstaining from unlawful means are among the basic principles. Quran advises and encourages the acquisition of livelihood through fair means, i.e., NOT through defrauding, deceiving or manipulating anyone, going against anyone’s due right/Haq, stealing, cheating, betting, etc. We as believing Muslims should live our lives in accordance with Quranic guidelines. We should stick to earning wealth through fair means and avoid all Haram income/wealth including being a part of MLM in any manner what so ever.