Fiqh muamalat case study: multilevel marketing / Nur Adawiyah Abdul Halim … [et al.]

Multi-level Marketing (MLM), often known as network marketing (NM), is a business approach utilized by some direct sales organizations in which individual distributors are incentive to recruit new distributors. Distributors are compensated for both their own sales and the recruitment or sales of their recruiters, resulting in a multi-level marketing system. This strategy became widespread in the twentieth century, with well-known examples including Amway, Avon, Herbal, and Nu Skin. Multi-level marketing is a multi billion-dollar sector that accounts for around 1 % of retail sales in the United States. According to a 2018 poll, 7. 7% of US adults had engaged in at least one MLM organization over their lives. This industry is likewise experiencing rapid expansion in underdeveloped nations. Multi-level marketing has received significant criticism, sometimes on normative grounds. certain of the criticism stems from the fact that certain MLM companies have been found to be unlawful pyramid schemes. Another point of contention is that some of these companies utilize potentially unethical sales practices' the same time, academics argue that MLM companies may exist without being classified as pyramid schemes. The most significant distinction between a legitimate MLM company and an unlawful pyramid scheme is that legal MLM companies, unlike pyramid schemes, rely heavily on sales to customers outside e MLM. It should be noted that the presence of certain consumer sales does not exempt M companies from pyramid scheme claims. (Nikos Kavallaris, 2021)