DXN Company is a Malaysian company founded in 1993, specializing in the production of natural health and beauty products. The company offers a range of nutritional supplements, healthy coffee, and cosmetics.
The issue in question is not about its products but about the legality of dealing with it as a marketer.
The marketing system used is network marketing (MLM), which is a way of selling products that relies on creating a network of marketers, where each person invites others to join the network to become marketers in their team, earning commissions from their own sales and the sales of those they recruit.
Network marketing companies sell real products, but the problematic aspect is that the primary focus of their business is recruiting marketers rather than selling products. The reality supports this, as their websites and pages focus on marketing, financial freedom, and success stories. In truth, the product being sold is the promised wealth, not the materials, as religious rulings are based on the reality of transactions, not their apparent form.
This type of sale is considered “Bay’ al-Gharar” (an uncertain sale), and gharar is “anything with an unknown outcome, such as whether it will happen or not” [Kuwaiti Encyclopedia of Fiqh (39/405)].
From Abu Hurairah: “The Messenger of Allah ⎜⊞ forbade the sale of Gharar.” [Sahih Muslim (3/1153 T. Abdul-Baqi)]
Imam Al-Shafi’i said, “Among the sales of gharar is selling fish still in the water, selling a runaway slave, or a bird in the sky, and similar sales.” [Sunan Al-Tirmidhi (3/524)]
Ibn Al-Mundhir said, “Sales involving Gharar fall into many categories; it includes any sale whose contract between the two parties is about something unknown to either the seller or the buyer, or even to one of them.” [Al-Ishraf by Ibn Al-Mundhir (6/15)]
Some might issue a fatwa allowing it due to an incomplete understanding of the transaction, as stated in a research paper by the Jordanian Dar Al-Ifta, which mentions, “Network marketing may appear in its surface form as a novel transaction based on incentives and creating job opportunities for many young people, which may deceive the mufti into thinking it’s permissible without delving into the details of the presented matter.” ((https://aliftaa.jo/Research/102/%d8%a7%d9%84%d8%aa%d8%b3%d9%88%d9%8a%d9%82-%d8%a7%d9%84%d8%b4%d8%a8%d9%83%d9%8a)))
Among those who ruled its prohibition in modern times:
- The Permanent Committee for Scholarly Research and Ifta in Saudi Arabia ((https://www.islamweb.net/ar/fatwa/203089/%D9%81%D8%AA%D9%88%D9%89-%D8%A7%D9%84%D9%84%D8%AC%D9%86%D8%A9-%D8%A7%D9%84%D8%AF%D8%A7%D8%A6%D9%85%D8%A9-%D8%A8%D8%B4%D8%A3%D9%86-%D8%A7%D9%84%D8%AA%D8%B3%D9%88%D9%8A%D9%82-%D8%A7%D9%84%D8%B4%D8%A8%D9%83%D9%8A)))
- Sudanese Islamic Fiqh Assembly ((https://erej.org/%D8%A7%D9%84%D8%AA%D8%B3%D9%88%D9%8A%D9%82-%D8%A7%D9%84%D8%B4%D8%A8%D9%83%D9%8A)))
- IslamQA ((https://islamqa.info/ar/answers/179122/%D8%A7%D9%84%D8%AA%D8%B9%D8%A7%D9%85%D9%84-%D9%85%D8%B9-%D8%B4%D8%B1%D9%83%D8%A9-%D9%85%D9%86-%D8%B4%D8%B1%D9%83%D8%A7%D8%AA-%D8%A7%D9%84%D8%AA%D8%B3%D9%88%D9%8A%D9%82-%D8%A7%D9%84%D8%B4%D8%A8%D9%83%D9%8A)))
- Jordanian Dar Al-Ifta ((https://aliftaa.jo/Research/102/%d8%a7%d9%84%d8%aa%d8%b3%d9%88%d9%8a%d9%82-%d8%a7%d9%84%d8%b4%d8%a8%d9%83%d9%8a)))
- Sheikh Muhammad Ali Ferkous ((https://www.ferkous.app/home/?q=fatwa-1135)))
- Algerian Ministry of Religious Affairs and Wakfs ((https://marw.dz/%D9%81%D8%AA%D9%88%D9%89-%D8%AD%D9%88%D9%84-%D8%A7%D9%84%D8%AA%D8%B3%D9%88%D9%8A%D9%82-%D8%A7%D9%84%D8%B4%D8%A8%D9%83%D9%8A)))
And many others.
When is this practice considered permissible?
It is permissible if there is a complete and genuine separation between the matter of purchasing products and recruiting marketers, so that the sale of the products is entirely isolated from convincing people to work as marketers. The product should be bought for the sake of the product itself, not for the marketing profits.
And Allah knows best.