Vector Marketing: Too Good to Be True?

By on in Imported.

What is Vector Marketing?

According to their website:

Vector Marketing Corporation™ is a single-level direct sales firm that market Cutco Cutlery®, a line of kitchen cutlery, accessories and sporting knives of the highest quality. With its administrative headquarters in Olean, NY, Vector Marketing is a wholly owned subsidiary of Cutco Corporation, which has been manufacturing Cutco Cutlery since 1949.

It is actually a "marketing" firm designed to entice high school graduates into selling their knives to family and friends. After being contacted by a few friends who "work" there (actually independent contractors) I received a phone call to come in and interview. After suiting up and grabbing an umbrella to face the onslaught of rain, I pulled out my phone to do a little more research on the company since I had only read their website by that point. Here's what I found out. Let's see if you can figure out what is going on here.

The Hiring Process

  1. Vector Marketing receives your contact information from one or more of their new recruits who are fresh out of training (Hint: They get a bonus for recommending people.).
  2. You receive a phone call offering you an interview. Details are very vague about the actual job, but the manager is very personable (Hint: He gets a bonus for interviewing and hiring you.)
  3. They send a very nice email with great directions on how to get there, although the email is clearly a form email (Hint: They really want you to show up.)
  4. You arrive at the office which seems to be rather small and contains almost no permanent fixtures (That should be a warning sign!).
  5. There might appear to be a lot of phones ringing. Anyways, you will be quickly swept into an office for an alarmingly shot interview followed by a 90 minute seminar on the company. You will be informed that you have been hired and sent home.
  6. You will then receive three days worth of unpaid (!) training. your job will be to ring up anyone you can, set up an appointment, and attempt to sell them a set of CutCo kitchen knives.
  7. You will be paid $16 an appointment and receive a small commission on any set that you manage to sell.

Sounds like a good deal right?

Let's do Some Math

  1. Cost to train a new recruit: $0
  2. Hourly pay: $0/hour
  3. Total Cost = $0/hire

(Interesting. It costs VM a minimal amount of money to hire you, and there is all kinds of incentives in place to get more hires. You are actually worth close to nothing to this company.)

  1. Money you make per hour: $0
  2. Money you make per appointment: $16

  3. Money you make IF you make a sale: 10% off a (starter set price) 150$ sale = 15$

  4. Money you could be making at your average $10/hour job: $400/week

  5. Appointments you have to make an keep to make that amount of money: 25/week

Can you make a guaranteed 25 appointments every week while factoring in driving time? And don't forget the gas prices these days!

So you are making somewhere between $16 and $31 an appointment (assuming you make a sale, which isn't something that likely happens enough to make it worth your while). Let's consider some other points:

  • As an independent contractor, you will not be reimbursed for gas money.
  • You can only sustain that level of income ($16 an appointment) for as may people as you have in your contact list.
  • Vector may or may not charge you a security deposit on your knife demo set.

Don't Believe Me?

I'd be pretty wary already, but if none of that does it for you, let's look at Vector Marketing's Wikipedia page:

Vector was sued in 1990 by the Arizona Attorney General and in 1999 by the Australian Competition and Consumer Commission. In 1994, the state of Wisconsin ordered Vector to stop providing dishonest information to recruits. The state and Vector agreed to a settlement that punctuated a series of state actions against Vector's Tucson manager that spanned seven years. Vector agreed not to misrepresent its compensation system as part of the settlement. As a result, Vector no longer recruits in the US state of Wisconsin.

In 1996, The Washington Post reported that of "940 Vector recruits surveyed, nearly half either earned no money or actually lost money through working with the company."

Conclusion

While Vector Marking isn't technically doing anything illegal (at least in Illinois currently), the fact is that their business model revolves around exploiting young high school and college students who are not experienced enough to see exactly what is going on here. While I'm sure it is possible to make some money working for them, I can assure you that your time and talent is better spent elsewhere, either at a job where you are actually a valuable employee or just doing something you like (unless you really love selling knives).

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