Network marketing through the prism of Islam: halal or haram?

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The network marketing industry is growing rapidly worldwide, reaching total sales of over $300 billion in 2023. In Muslim societies, such trends exacerbate the dilemma of whether this promising business model complies with strict Sharia law.

Network Marketing in Islamic Law

The Islamic legal system (Sharia) not only defines the rules of conduct part time data for Muslims in various aspects of life, but also strictly regulates the business environment. There is a widespread belief that according to fatwas (Islamic theological opinions), network business is prohibited. In fact, such prohibitions were based solely on the activities of local entrepreneurs who created financial pyramids, calling them network marketing.

The structure of network marketing and a financial pyramid are similar, but they work in completely different ways:

A financial pyramid is built on the turnover of money, without offering real goods or services. Here, each participant first invests his own money, and then receives a percentage of the investments of people who registered under him. As the number of participants and the money they invest grows, the income of those who joined the company earlier also grows. This type of activity is strictly prohibited by Sharia.

Network marketing (MLM) is based on direct sales of products or services through a network of independent sales partners - distributors. In this business model, each distributor receives income in the form of commissions from their own sales and the sales of the participants they attract.