Vector Marketing

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 graduatesmarket Cutco products (mainly kitchen knives) to customers, especially their friends and family members 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 fliers advertising "student work" are a common sight on many college campuses in the United States and Canada.

Business Model

Sales representatives 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 5%-per-promotion increments up to 30%. Promotions beyond that are monthly bonuses (10%, 15%, and 20%) which are paid only if the sales representative meets a sales threshold for the month. This bonus is then added to the rep's regular commission. Straight commission plus the monthly bonus means that the top representatives are paid at a 50% rate. Promotions are dependent upon career sales, and remain permanently; i.e., one could leave the company and, upon returning, receive the same commission rate. Sales representatives may refer their friends to join as a new sales reps which allows them to gain 3% of their friends' sales, but this bonus comes out of the manager's paycheck and not the friend's paycheck. The company's average order is $250, and the average conversion ratio or closing percentage is 60% meaning that representatives should typically make more on their commissions than from the base pay. The Vector Marketing company provides professional assistance with creating and generating formal appointments with customers.

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 representatives. 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 better connect with their managers (given they shared similar experiences).

Vector Marketing possesses an advisory board currently consisting of seven college professors: Dr. Joseph Hair (Kennesaw State University), Dr. Victoria Crittenden (Boston College), Dr. David Downey (Purdue University), Dr. Robert Peterson (University of Texas), Dr. Mike Williams (Illinois State University), Dr. Derek Hassay (University of Calgary), and Dr. Deborah MacInnis (University of Southern California). These board members "assist in evaluating and enhancing Vector's sales, training, and promotional programs for college students and sales representatives."

Like many direct selling organizations, the overall success of representatives is based on performance. Representatives receive a presentation booklet during the course of the training seminar which consists of the word for word demonstration that reps are encouraged to follow in order to develop necessary skill-sets within the company.

Controversy and criticism

Over the years allegations over the legitimacy of Vector Marketing's student sales program have surfaced, including complaints that student employees must undergo 3 days of unpaid training, Vector Marketing's job advertisements are deceptive, and student employees are unfairly compensated for work done. Vector Marketing has been sued multiple times, by Arizona Attorney General Bob Corbin in 1990 and by The Australian Competition and Consumer Commission in 1999. Additionally, a court in Marion County, Oregon court ordered the company to stop deceptive recruiting practices after an investigation in 1994, and in 2003 the Oregon Bureau of Labor and Industries settled several wage disputes with the company. On the other hand, Vector was awarded “2008 Student Employer of the Year” by Buffalo State College. In August 2008 The Wall Street Journal called Vector Marketing "A nice summer job".

Vector Marketing in the past has required sales representatives to make a deposit of approximately $147 in order to procure a set of knives for demonstrations, prompting some to complain about this policy, even though the deposit is fully refundable. Since Vector Marketing is a multi-level marketing group, students who work for Vector Marketing are considered independent contractors and are not reimbursed for money they spend on gasoline used while working or for the time they spend at training sessions.

References

External links

• Vector Marketing site
• Application website
• Vector Marketing Scholarships