I have this question on Network Marketing.
In network marketing, a person buys some products from a company at a very low cost.
The reason for the very low cost of product is that the wholesaler and retailer are not involved and thus a buyer directly buys from the manufacturer.
Buying products from such manufacturer gives privilege to the customer of becoming a member of the network. Now as a member of the network you ‘spread the word’ about the product and look for new prospect members. Usually you look for new recruits among your friends and family.
Now the game is like this. You earn profit from your direct sales and also a percentage of profit from the sales of members that were recruited under your name.
A ranking is developed for you depending on the number of recruits under you and as you go higher on the chain, your profit substantially increases and also your personal effort decreases since you have so many people under you earning and you are just getting share from their profit.
Now, is this income you are earning a Halaal source of income, especially when you are just sitting pretty and people are burning their sweat in heat going around looking forward for sales and recruiting people under them? Is it halaal still, knowing that you are not paying them anything for their labor but rather getting portion of their income without any apparent effort?
Please enlighten with your opinion
There is nothing wrong with the concept that you have outlined. The income, thus, generated does not fall under any of the categories of incomes, which is expressly prohibited by the Shari`ah, and, therefore, it cannot be considered as prohibited.
I hope this helps.
July 30, 2002