Vector Marketing

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Vector Marketing
TypePrivate
IndustryMarketing
Founded1981[1]
HeadquartersOlean, New York, US
Key peopleUnknown[1]
Websitewww.vectormarketing.com
 
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Vector Marketing
TypePrivate
IndustryMarketing
Founded1981[1]
HeadquartersOlean, New York, US
Key peopleUnknown[1]
Websitewww.vectormarketing.com

Vector Marketing is the domestic sales arm of Cutco Corporation, an Olean, New York based cutlery manufacturer.

History[edit]

Vector Marketing Corporation and Cutco Cutlery Corporation are wholly owned subsidiaries of Cutco Corporation. Formerly known as Alcas Corporation, the company was created as a joint venture between Alcoa and Case Cutlery. The factory in Olean, New York was completed in 1947, and the first set of Cutco Cutlery was shipped to New Kensington, Pennsylvania that same year. Alcoa purchased Case's share of the company in 1974.[1]

In 1982 members of management purchased the company from Alcoa in a management buyout. The company remains privately held, and is a major employer in Cattaraugus County, New York.[2][3]

Vector began as an independent distributor of Cutco Cutlery in 1981. In 1985, the company was purchased by Alcas Corporation, which changed its name to Cutco Corporation in 2009. In 1990, Vector Marketing expanded into Canada.[1]

As of 2013, Vector has more than 200 offices throughout the U.S. and contracts about 60,000 student workers each year to perform entry-level sales work.[4]

Business model[edit]

Vector Marketing is a single-level direct sales group that builds its work force through advertising via newspapers, direct marketing, word-of-mouth, posted advertisements, letters and various media on the internet.[5][6][7] They recruit sales representatives from high schools and college campuses in the United States and Canada, sometimes through misrepresentation of affiliation with the school.[4] Students are employed as independent contractors to sell Cutco products (mainly kitchen knives) to customers, typically their friends and family members via one-on-one demonstrations.[8][4]

Business memberships[edit]

Vector Marketing has belonged to the Better Business Bureau since December 19, 1990 and is listed on its website with an A+ rating as of 2014.[9] It is also a member of the Direct Selling Association.[10]

Controversy[edit]

Some of Vector Marketing former independent contractors have accused Vector Marketing of unsavory business practices and some have gone so far as to say that Vector Marketing is, in fact, a pyramid scheme.[11][12][13][14] Vector frequently advertises in newspapers and on fliers posted on bulletin boards at college campuses, but seldom do those advertisements explain the nature of the job.[15][16]

In addition to vague job descriptions, Vector Marketing's compensation policies are often criticized. Vector Marketing previously required sales representatives to make a refundable security deposit to procure a set of knives for demonstrations.[13][14][17][18] Students who work for Vector Marketing are considered independent contractors and are not reimbursed by the company for money they spend on transportation expenses and other common business expenses while working or for the time they spend at training sessions.[6][13] In the 2008 case Vector Marketing Corporation v. New Hampshire Department of Revenue Administration, the Supreme Court of New Hampshire ruled that Vector employees are independent contractors and Vector is thus exempt from the state business profit tax.[19]

Vector Marketing has been sued several times. 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".[20] A recruit who was successful in a lawsuit against Vector for failing to adhere to labor laws in New York co-founded a group, Students Against Vector Exploitation (SAVE).[21][22] In 2008, Alicia Harris filed a federal class action lawsuit against Vector. Harris alleged that Vector violated California and federal labor law by failing to pay adequate wages and illegally coercing employees into patronizing the company.[23] The case, Harris v. Vector Marketing Corporation, is pending a final settlement approval for US$13 million before Judge Edward M. Chen.[24][25] Vector was sued in 1990 by the Arizona Attorney General.[26] In 1994, Wisconsin ordered Vector to stop providing dishonest information to recruits.[22] Arizona 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.[20][dubious ]

References[edit]

  1. ^ a b c d "Vector Marketing - Our Company". Vector Marketing. Retrieved 10 August 2011. 
  2. ^ "Cutco Cutlery: History". Cutco Corporation. Retrieved November 22, 2010. 
  3. ^ "Major Employers". City of Olean Community Development. Retrieved November 22, 2010. 
  4. ^ a b c Robbins, Rebecca (August 2, 2011). "The Company that Cuts Both Ways". Santa Barbara Independent. Retrieved August 2, 2011. 
  5. ^ Kellman, Beth Robinson (April 2, 2010). "Better Business Bureau offers advice on multilevel marketing". The Oakland Press (Oakland County, Michigan). Retrieved May 19, 2011. 
  6. ^ a b Deal, A. Matthew (September 26, 2006). "High wages for student work – but beware". Campus News (The Carolinian). p. 1. Retrieved June 5, 2008. 
  7. ^ Gunn, Eileen (August 5, 2008). "Summer Job: Nice Pay, if You Can Cut It". The Wall Street Journal. p. D4. Retrieved April 21, 2011. 
  8. ^ Episode 10. Street Cents, January 14, 2002 Online copy at the Internet Archive
  9. ^ "Vector Marketing Corporation Review - CUTLERY in Olean, NY - BBB Business Review - BBB serving Upstate NY". Bbb.org. Retrieved 2014-01-28. 
  10. ^ "About Direct Selling". DSA. Retrieved 2012-08-13. 
  11. ^ http://clantilyscad.com/2010/07/13/the-cult-of-cutco-how-vector-marketing-mass-hires-students-into-dubious-contract-labor/
  12. ^ "Blue-Eyed Devil: Don't get scammed looking for work while in college". lsureveille.com. Retrieved April 8, 2012. 
  13. ^ a b c Lucchesi, Nick (February 4, 2004). "Vector Marketing targets unaware college students". News (The Journal). p. 2. Retrieved June 5, 2008. 
  14. ^ a b da Costa, Polyana (August 21, 2004). "Firm misled sales recruits to sell knives, students say". Salem Statesman-Journal. Archived from the original on July 4, 2008. 
  15. ^ Holt, Shirleen (February 22, 2004). "Help-wanted pitch may have surprise curve". The Seattle Times. Retrieved July 24, 2010. 
  16. ^ Blackburn, Roger. "Review: Cutco Knives and Vector Marketing is a SCAM". KnifeUp. Retrieved 29 August 2013. 
  17. ^ "Vector Marketing - Got Questions?". Vector Marketing. Retrieved 10 August 2011. 
  18. ^ Anderson, Matt (October 6, 2004). "Vector policies questionable". MTSU Sidelines. p. 1. Retrieved June 5, 2008. 
  19. ^ Vector Marketing Corporation v. New Hampshire Department of Revenue Administration, New Hampshire Supreme Court case no. 2007-0330.
  20. ^ a b McKay, Peter. "For Vector Marketing, the Question of the Hour; Does the $12.05 Pay in Its Recruitment Ads Accurately Reflect the Wages or Are Respondents Being Misled?", The Washington Post, July 1, 1996, p.F08.
  21. ^ Gripenstraw, Kelsey (April 20, 2011). "Beware of Campus Scams". The Bottom Line (University of California, Santa Barbara). Retrieved May 18, 2011. 
  22. ^ a b "Student Group Wants to Slice Up Vector". Consumeraffairs.com. August 12, 2003. Retrieved May 21, 2010. 
  23. ^ Chen, Edward M. (September 4, 2009). "Order Granting in Part and Denying in Part Defendant's Motion for Summary Judgment". Harris v. Vector Marketing Corporation (United States District Court for the Northern District of California) 
  24. ^ "Court opinion". Harris v. Vector Marketing Corporation. Justia.com. May 5, 2011. Retrieved May 14, 2011. 
  25. ^ "Preliminary approval of $13 million settlement granted despite concerns". AllBusiness.com. May 31, 2011. Retrieved Feb 5, 2012. 
  26. ^ Wellman, Paul. "The Company That Cuts Both Ways". Retrieved 29 August 2013.