| Vector Marketing | |
|---|---|
 |
|
| Type | Private |
| Founded | 1981 |
| Headquarters | Olean, New York |
| Industry | Marketing |
| Revenue | $180 million |
| Website | www.vectormarketing.com |
Vector Marketing is the domestic sales arm of Alcas Corporation, the Olean, New York-based company that manufactures Cutco products. Salespeople, many of them college students and recent high school graduates, market Cutco products to customers via one-on-one demonstrations, fairs & shows, and through business-to-business sales. Vector builds its force through advertising via newspapers, Craigslist, direct marketing, MySpace, facebook, word-of-mouth, posted advertisements, and letters sent to students and recent graduates. Their flyers advertising "student work" are a common sight on many college campuses in the United States and Canada.
Contents |
Business Model
Sales reps are paid weekly and receive either a base pay per appointment or commission on products sold, depending on which is higher. Commissions start at 10%, increasing in increments of 5%, up to a maximum of 30%. Monthly bonuses of an additional 10%, 15%, or 20% can boost that figure after reps achieve US$20,000 in career sales.[1] Commission levels are dependent upon career sales. The company's average order is $243, and the average conversion ratio or closing percentage is somewhere between 60% and 80% depending on the quality of the prospect, meaning that representatives should typically make more on their commissions than from the base pay. Vector is a member of the Direct Selling Association and the Better Business Bureau. A promote-from-within policy means that Vector managers all began at the bottom as sales reps. Many Vector offices are managed by recent college graduates, and assistant managers are generally college students, although the company does have a branch program that allows current students to open and run an office while on semester break. This allows students to be able to connect with their managers since they were once in their shoes. Over the summer of 2006, Vector also expanded to Puerto Rico with a branch office, to surmise whether or not it was a viable location for a full-time office.
| Vector Salary Information | Commission Rate | |
|---|---|---|
| $0 | Trainee | 10% |
| $1,000 | Sales Representative | 15% |
| $3,000 | Advanced Sales Rep | 20% |
| $6,000 | Advisor | 25% |
| $10,000 | Senior Advisor | 30% |
| $20,000 | Field Sales Leader | 40% |
| $25,000 | Senior Field Sales Leader | 45% |
| $30,000 | Field Sales Manager | 50% |
Criticism
Critics have accused the company of a variety of perceivedly unfair and deceptive practices, including:
- Advertising a per-appointment rate in such a way that it may be interpreted as an hourly rate.
- Requiring contractors to provide a refundable deposit in exchange for a product sample kit before they can begin selling. However, the deposit is $135+tax for a kit that is worth $540, and some programs allow reps to borrow such sample kits free of charge.
- Paying reps solely on their own performance in terms of number of appointments conducted or sales created, and not directly for time spent training, attending conferences, or generating appointments.
- Advertising for "flexible hours," while managers push reps to make appointments and sell.
- Encouraging reps to attend unpaid team meetings.
- Encouraging reps to attend sales training conferences, which reps must pay for in exchange for receiving additional Cutco training to better themselves and for informational purposes only.
- Heavily recruiting High School and College Students with little or no experience.
- Designating representatives as independent contractors and in doing so, not having to pay them for training or take out taxes from their paychecks.
David Tatar, a supervisor with the Wisconsin Consumer Protection Department, was quoted in a 1996 Washington Post article as saying "that state surveyed 940 Vector recruits in 1992 and found that almost half either earned nothing or lost money working for Vector" and "workers in that state earned less than $30 a day on average selling cutlery for Vector."[2]
References
- ^ http://picasaweb.google.com/DisNuts/Cutco/photo#5071905597427931122
- ^ McKay, Peter. "For Vector Marketing, the question of the hour", The Washington Post, 1996-07-01, p. F8. Retrieved on 2007-07-17.
