According to Investopedia, an MLM company is one that "encourages existing members to promote and sell their offerings to other individuals and bring on new recruits into the business. Distributors are paid a percentage of their recruits' sales. New recruits become the distributor's network or downline and are, in turn, encouraged to make sales to earn money." In other words, when "associates" of an MLM like Isagenix tell you they are involved in direct sales, it's true; they really do sell a product directly to customers. But that's not the whole story. 

In order to make a profit in a business like this, "associates" need to not only sell a significant amount of product, but they also need to recruit people underneath them to sell a significant amount of product, and so on and so forth. The reason this type of business model often gets compares to a pyramid scheme is because this type of upline/downline model does look rather exactly like a pyramid on paper. What keeps businesses like Isagenix legal and not considered a pyramid scheme is the fact that they do sell an actual product. 

The reason such companies get a bad rap, however, is unless you are constantly recruiting people underneath you, you won't make much (if any) money. In fact, only about 25 percent of MLM sellers make any profit at all (via Fundera). That means that roughly 75 percent of all MLM sellers and "associates" never make a profit.