- The Vector Marketing Scam: The Controversy
- Lawsuits Filed Against Vector Marketing
- What is Cutco Cutlery?
- How Do You Make Money with Vector Marketing?
- Students Against Vector Exploitation (SAVE)
- Vector Marketing's BBB Rating
- So, Is Vector Marketing a Scam?
Vector Marketing is a company that hires independent sales representatives to sell their product—CUTCO kitchenware and knives. Their tactic for selling knives is to demonstrate the product to the consumer during scheduled appointments. There are several conflicting opinions on whether Vector Marketing is a scam.
According to the Vector website, the company is "not a 'get rich quick' company," and representative success comes from their strong work ethic and ability to sell.
The Vector Marketing Scam: The Controversy
Although Vector Marketing is a legitimate business, many claim they have several characteristics of a pyramid scheme. Many have also slammed some of the company's marketing practices and employment/recruiting side of the business.
Despite the negative claims against Vector Marketing, the company operates legally and does sell quality products to consumers.
Buy Before You're Hired
Previously, Vector Marketing distributors were required to purchase a training kit before being accepted into their company. Other reviews on Glassdoor back up this claim. In addition to having to pay before you can start working, many former employees also complained about having to attend mandatory training and meetings without pay.
However, this model changed in 2011 following complaints and lawsuits filed against the company. Vector Marketing's website states that there are no start-up costs. When you make a sales call, you're loaned a set of sample Cutco knives for the in-home presentation, which you return if you decide you no longer want to continue selling.
No Experience Needed: Recruiting Targets Students
Vector mainly hires high school students, graduates, and college students because the company doesn't require years of experience. Instead, the company provides all the necessary training. While this may seem like a smart recruiting strategy, it has landed Vector in hot water before.
You're Not Paid for Training Sessions
Although Vector provides all the training required to start selling knives, it's essential to know that you're not paid for the time spent at these sessions. From what we can gather, training is held over three days (initially), and you're not compensated for your time.
On Glassdoor, a website where you can find career opportunities and rate your current or previous employers, many people have commented on their experiences with Vector. These reviewers include people who tried working for the company at one point or currently work for them.
In one of the Glassdoor reviews of Vector, a current employee addressed why Vector mainly hires high school and college students, stating the company's product is so easy to sell that even a college student could do it. Yet, several former employees have submitted reviews complaining about how difficult it was to sell the product, mainly because knife and kitchenware sets are so common.
Cutco Products Not Exclusive to Vector Marketing
Some have claimed that Vector Marketing is a scam because Cutco products are not sold exclusively by Vector.
These items can be bought directly from the Cutco website or even on Amazon. So, one can argue that there's no need for sales reps.
- Thousands of brands, millions of products
- Free shipping on millions of items
- Free One-Day delivery with Amazon Prime, available coast to coast
It also makes it extremely difficult for independent sellers to be able to schedule an in-home demonstration since many consumers would rather just buy these products online.
Guaranteed Base Pay Based on Appointments
One person who went for an interview with Vector published a short article about their experience on SlideShare. The article, titled "7 Secrets Vector Marketing Scam Didn't Tell You," explains their 90-minute interview with Vector. The author reveals the company doesn't advertise how people make money as a representative.
Vector does offer a base pay for representatives, but this pay is dependent on how many customers appointments you book. According to this anonymous author, an appointment occurs when someone agrees to watch the product demonstration.
Yet, representatives could work all day making phone calls to get an appointment but only successfully book one. Even after a full day of work, a representative would only receive payment for one appointment—which is more similar to commission than a base salary.
Once you've booked an appointment, Vector states that you're highly likely to make a sale, which is why you make money for an appointment alone (even before you've sold any products).
Lawsuits Filed Against Vector Marketing
Over the years, Vector Marketing has had several lawsuits filed against them for different reasons, but all from previous Vector employees or independent sellers.
Arizona Attorney General Lawsuit: 1990
Vector Marketing agreed to a settlement in 1990 after the Arizona Attorney General sued the company for violating the Arizona Consumer Fraud Act, misrepresenting its compensation system.
Wisconsin vs. Vector Marketing: 1994
The state of Wisconsin ordered Vector Marketing to stop deceptive recruiting practices, specifically towards younger people. As a result of this suit, Vector discontinued recruiting salespeople in the state.
SAVE Co-Founder vs. Vector: 2003
In 2003, a sales rep for Vector won a lawsuit against the company that claimed they violated New York labor laws. She was awarded compensation for the unpaid training sessions she attended as a recruit.
Harris vs. Vector Marketing Corporation: 2008
Alicia Harris, a previous sales rep, filed a class-action lawsuit against Vector in 2008, alleging the company violated both California and federal labor laws. She made several claims against the company, including:
- Failing to pay wages
- Failing to pay minimum wages
- Failing to pay wages owed in a timely fashion at the end of employment
- Compelling or coercing an employee to patronize Vector's business
In 2011, Vector agreed to pay $13 million to settle the lawsuit. Any Vector reps that signed a Sales Representative Agreement in California between 2004 and 2011 can claim $57-$75 from the company.
Violating the National Fair Labor Standards Act: 2016
Vector Marketing paid $6.76 million to plaintiffs after being sued for not paying for three-day sales training sessions attended by new recruits. Although Vector agreed to pay the settlement, they still do not pay its contractors for attending training sessions.
Division Manager vs. Vector: 2017
A Division Manager for Vector Marketing filed a class-action lawsuit against the company for unfair labor practices. He claimed they classified him and others as independent contractors, disqualifying them for overtime pay.
What is Cutco Cutlery?
Cutco Cutlery is a cooking utensils company known for its high-quality kitchen knives and accessories sold both at retail stores and via in-home sales demonstrations. Vector Marketing is a direct selling subsidiary of Cutco's, responsible for the in-home demonstrations and recruiting sales representatives to market these products directly to consumers.
It's important to note that any complaints against Vector Marketing are not related to their products. Most complaints come from independent sellers and not from consumers.
The Cutco Guarantee
Perhaps one of the best selling points of Cutco knives (and all products) is The Forever Guarantee. Your products are guaranteed for life, and Cutco will "correct the problem or replace it" if you're unsatisfied. The guarantee also includes free sharpening of your knives (although you need to pay return shipping and handling fees for this "free" service).
How Do You Make Money with Vector Marketing?
Despite what many believe, Vector Marketing is not a multi-level marketing (MLM) company but a direct sales company. However, many believe there is a Vector Marketing scam because of the difficulty of selling knives to consumers.
There are two ways to make money with Vector Marketing:
- Booking qualified appointment
- Making sales
As you can see, there is no money made from recruiting other salespeople, which is why Vector is not a pyramid scheme nor an MLM company.
Note that if you're a Vector Marketing sales representative, you're not an employee but one of their contractors. Therefore, you're not eligible for overtime, paid time off, or other benefits you would get as an employee.
Vector Marketing clarifies that they are not a "get-rich-quick" company and that hard work is needed to succeed.
Booking Qualified Appointments
Their current model allows you to make money via commissions on sales and base pay for each qualified appointment you make, regardless of whether or not you end up making a sale.
According to The Vector Impact, you can make $15-$18 for each qualified appointment you make to show Cutco knives to a potential customer. This is not an hourly rate; it's just a set amount you get, regardless of how long the presentation is, how long you spent trying to secure the appointment to begin with, or whether or not you make a sale.
Commissions from Product Sales
In addition to making appointments, you can earn money by making product sales. The Vector Impact states you can make 10-30% in commissions depending on how much you sell.
- $1,000 in total sales: 15%
- $3,000 in total sales: 20%
- $6,000 in total sales: 20-25%
- $10,000 in total sales: 30%
Students Against Vector Exploitation (SAVE)
Vector Marketing is known for targeting students to try and recruit them to be sales reps. In the past, they have appeared to have deceptive recruiting practices, luring in students under a different business name (likely to avoid the company's negative stigma), offering vague job descriptions, and being unclear about commissions and how they will make money.
Many believe they were misled to think selling knives for Vector is a lucrative business opportunity.
Thousands of students came together in the early 2000s forming a group called "Students Against Vector Exploitation," aiming to educate college students on Vector Marketing and its practices.
In 2003, the group's co-founder, Lauren Katz, filed a case against Vector Marketing, in which she claimed the company breached her independent contractor agreement. She won the case and was given monetary compensation for the hours of unpaid training she went through while she was contracted with them.
Vector Marketing's BBB Rating
If you take a quick look at Vector's Better Business Bureau (BBB) rating, it may be no surprise that people ask, "Is Vector Marketing a scam?" However, an average customer review of 2.14/5 (as of March 2022) should make you think twice about joining the company.
The low rating could be a matter of new recruits not knowing what they're getting into when joining the company. Almost all 5-star ratings rave about the quality of the knives themselves and not the direct selling company itself.
One positive thing is that Vector responds and resolves complaints made to the BBB and currently has a B+ rating.
Note that this rating does not consider customer reviews, of which Vector has had 45 in the past 3 years. It seems they investigate all complaints and make it a point to pay sales representatives any missing commissions.
Common Complaints on BBB
There is currently a notice posted on Vector's BBB page alerting consumers of a recent complaint pattern (dated November 2021). It states that several complaints were made against the company alleging the company reached out to previous sales reps' contacts (found on their personal phones).
In addition, a handful of complaints related to contractors not getting paid for some of the in-home presentations they completed. However, as mentioned, Vector is pretty good at addressing and resolving these complaints.
So, Is Vector Marketing a Scam?
No. Vector is not a scam but a direct sales company that recruits independent contractors for its sales staff.
Although Vector's vague job descriptions and questionable marketing and business practices have been slammed in the past, its model is completely legal and a legitimate business opportunity. Furthermore, despite several of the company's scam claims and Vector's negative stigma, it is not either a pyramid scheme or a multi-level marketing company/scam.
You should, however, be aware of how commissions are made and understand the work that's involved in making a sale before you join Vector Marketing.
Pros of Vector marketing:
- Create your own schedule.
- Focus is on selling products.
- Ability to increase your commissions and earn bonuses.
- Not a multi-level marketing model (you don't earn money by recruiting more sales representatives).
- Can earn money by booking appointments only (don't need to make a sale).
- No need to buy anything before you can sell products.
Cons of Vector:
- Can be difficult to book an appointment (can spend hours for little return).
- Not paid to attend training sessions.
- Cutco products are sold online (making demonstrations difficult to book).
- Many people find it difficult to make decent money.
- No base salary (you must book appointments to earn a "base pay").
- History of lawsuits, complaints, and negative reviews.