The main differentiating factor is whether the "distributors" are the customers (as is the case with a lot of MLMs, around these days) and real sales to end customer only make up a small percentage of total sales. In those cases all the product ends up in garages and attics of the people who bought in and now can't sell because the product is overpriced shit and designed as such. That means the primary way to make sales is to recruit new "distributors" who then have to do the same (so, pyramid schemes).

However things like tupperware didn't seem to work that way, the product was actually mostly sold to end customers which makes it a legitimate business and not a pyramid scheme.