Vector Marketing Corporation is the primary sales arm of Cutco, a cutlery manufacturer based in the state of New York. Vector Marketing is a Pennsylvania Corporation headquartered in Philadelphia with a network of regional offices in many large U.S. cities. Vector also does business in Canada. Cutco produces a range of kitchen cutlery that Vector sells through a single level direct sales operation. The products have been highly rated and are comparedto other high-end merchandise from exclusive manufacturers.
The Old Business Model
Vector Marketing’s business model is a direct sales company. They primarily market a well-regarded line of kitchen cutlery made from quality metals with exacting standards and workmanship. Cutco’s product lineincludes a line of high-quality kitchen cutlery, utensils, and accessories. In recent years, Vector’s annual sales exceeded $200 million. As a member of the Direct Sales Association, Vector publicly supports policies favoring integrity in the direct sales sector. Vector fields a sales force that engages in direct marketing on a national basis. They primarily recruit young persons in the 17-22age range through advertising on college campuses and in news media. Vector classifies its sales forces as independent contractors. As independent contractors, by definition, they are expected to bear their expenses for travel equipment, training, and any other costs. Prior to 2010, the costs included putting down a fully refundable security deposit as insurance that sales representatives would return their sample set at the end of their seasonal work.
Revisions to the Business Model
A key point of contention was the suggestion that the sales force was required to put a deposit for the Cutco products and extensively sell to family and friends. Falsely accused by some as the “Vector Marketing scam”, critics focused on sales to sales representatives and close friends and family. The practices have changed and here is one former representative’s experience of whether Vector Marketing is a scam or not. A key revision relates to demonstration equipment. Vector no longer requires sales representatives to purchase sets of cutlery or make security deposits. The company loans a set to each representative. A further revision offers prizes for sales achievements; Vector labels them as fast start prizes.
Differences of Opinion
There are many threads on the internet with persons responding to the question of whether the business model used by the Vector marketing company is legitimate. Those who promotethe Vector Marketing scam theory base it on broken promises and under-performing wages. They often claim that “employees”(which they are in fact self-employed independent contractors) have been misled by false pay rates and obscured facts about working conditions. Those citing evidence of a Vector Marketing scam also point to a number of legal actions against the company alleging violations of state labor and contract laws relating to terms of employment, compensation, and false promises. In rebuttal of the claim that the sales force recruitment and pay proposal is a scam, the company can point to many people who have sold successfully. They, in reality, received payments for their services as promised, both in commission and fees.
The Vector Model is Prone to Misunderstanding
The Vector Marketing business model has a proven record of success. They have sold a large volume of cutlery and related kitchen products. The prime target for Vector Marketing appears to be college students and recent college graduates. The company claims it has performed product sales, branding, and network development missions exceedingly well. Because the management of the model is a rigorous process, periodic assessments have focused effort on change and improvement. Ongoing assessment is a key to long-term success of the ambitious business model. It is a dynamic process, a marketing niche that exists in evolving markets.
An Aid to Young Workers
Vector Marketing has involved a segment of the workforce that undergoes constant change as young people cycle through their educational phases and into early stages of career development. Information on Vector Marketing’s website describes the many benefits, including prizes and scholarships. Vector believes that young, college-entry workers are a unique group. They may place higher value on entry level positions because as students and recent high school graduates they lack experience and employment histories. Vector argues that successful sales with their company provides a springboard for any future career and education.
The Facts Matter
There is no one answer that would transform the doubters into believers and believers into doubters. The facts are not in dispute that the nature of employment is obvious in the company recruiting material; the computation of wages is prone to misunderstanding by exaggeration. There are abundant examples of plain statements about the nature of these commissioned sales positions. However, one must also quickly admit that it is not unique. For example, the armed forces, when often recruiting, cite education, career advancement, and lifetime benefits rather than the dangers of combat when seeking to enlist young men and women. In the insurance industry, several well-known companies also recruit for commissioned sales contractors as if employed by the company. Many companies avoid openly stating that positions are not salaried until after a period of recruitment. A careful reading of the advertisements and materials Vector Marketing uses to engage recruits demonstrate that the essential elements are present. Lastly, the company can list thousands of sales representatives that have earned money and received prizes and incentives.