Vector Marketing
Encyclopedia
Vector Marketing is the domestic sales arm of Cutco Corporation
, an Olean
, New York based cutlery
manufacturer.
and Case Cutlery. The factory in Olean, New York was completed in 1949, 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 1972.
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
.
Vector began as an independent distributor of Cutco Cutlery in 1981. Then Vector was purchased by Alcas Corporation in 1985 (in 2009 Alcas changed its name to Cutco Corporation). Vector Marketing then expanded into Canada in 1990.
As of 2011, 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.
and a direct sales group that builds its work force through advertising via newspapers, direct marketing
, word-of-mouth, posted advertisements, letters
and various mediums on the internet. Their fliers
advertising "student work" are distributed in many high schools and college campuses across the United States and Canada. Students are hired to sell Cutco products (mainly kitchen knives
) to customers, typically their friends and family members via one-on-one demonstrations.
Vector Marketing used to require sales representatives to make a refundable security deposit
to procure a set of knives for demonstrations, however no deposit is now required. Students who work for Vector Marketing are considered independent contractor
s 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. 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.
Vector was sued in 1990 by the Arizona Attorney General and in 1999 by the Australian Competition and Consumer Commission
. In 1994, Wisconsin ordered Vector to stop providing dishonest information to recruits. 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. 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". 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).
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. The case, Harris v. Vector Marketing Corporation, is pending a final settlement approval for US$13 million before Judge Edward M. Chen
.
Cutco
Cutco Corporation, formerly Alcas Corporation, is the parent company of CUTCO Cutlery Corp., Vector Marketing, KA-BAR Knives Inc. and Schilling Forge. Its primary brand is also the name Cutco....
, an Olean
Olean, New York
Olean is a city in Cattaraugus County, New York, United States. Olean is the largest city in Cattaraugus County, and serves as the financial, business, transportation and entertainment center of the county. It is one of the principal cities of the Southern Tier region of New York.The city is...
, New York based cutlery
Cutlery
Cutlery refers to any hand implement used in preparing, serving, and especially eating food in the Western world. It is more usually known as silverware or flatware in the United States, where cutlery can have the more specific meaning of knives and other cutting instruments. This is probably the...
manufacturer.
History
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 AlcoaAlcoa
Alcoa Inc. is the world's third largest producer of aluminum, behind Rio Tinto Alcan and Rusal. From its operational headquarters in Pittsburgh, Pennsylvania, Alcoa conducts operations in 31 countries...
and Case Cutlery. The factory in Olean, New York was completed in 1949, 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 1972.
In 1982 members of management purchased the company from Alcoa in a management buyout
Management buyout
A management buyout is a form of acquisition where a company's existing managers acquire a large part or all of the company.- Overview :Management buyouts are similar in all major legal aspects to any other acquisition of a company...
. The company remains privately held, and is a major employer in Cattaraugus County, New York
Cattaraugus County, New York
Cattaraugus County is a county located in the U.S. state of New York. As of the 2010 census, the population was 80,317. The county seat is Little Valley.-History:...
.
Vector began as an independent distributor of Cutco Cutlery in 1981. Then Vector was purchased by Alcas Corporation in 1985 (in 2009 Alcas changed its name to Cutco Corporation). Vector Marketing then expanded into Canada in 1990.
As of 2011, 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.
Business model
Vector Marketing is both a multi-level marketingMulti-level marketing
Multi-level marketing is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation...
and a direct sales group that builds its work force through advertising via newspapers, direct marketing
Direct marketing
Direct marketing is a channel-agnostic form of advertising that allows businesses and nonprofits to communicate straight to the customer, with advertising techniques such as mobile messaging, email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional...
, word-of-mouth, posted advertisements, letters
Mail
Mail, or post, is a system for transporting letters and other tangible objects: written documents, typically enclosed in envelopes, and also small packages are delivered to destinations around the world. Anything sent through the postal system is called mail or post.In principle, a postal service...
and various mediums on the internet. Their fliers
Flyer (pamphlet)
__notoc__A flyer or flier, also called a circular, handbill or leaflet, is a form of paper advertisement intended for wide distribution and typically posted or distributed in public place....
advertising "student work" are distributed in many high schools and college campuses across the United States and Canada. Students are hired to sell Cutco products (mainly kitchen knives
Kitchen knife
A kitchen knife is any knife that is intended to be used in food preparation. While much of this work can be accomplished with a few general-purpose knives – notably a large chef's knife, a tough cleaver, and a small paring knife – there are also many specialized knives that are designed for...
) to customers, typically their friends and family members via one-on-one demonstrations.
Criticism
Some of Vector Marketing former independent contractors have accused Vector Marketing of unsavory business practices. 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.Vector Marketing used to require sales representatives to make a refundable security deposit
Security deposit
In the field of taxation, a deposit is not included as gross income to the receiving party until the depositing party chooses to apply the funds to purchase services. A 1990 ruling provides that a deposit differs from an advance payment because the depositing party has dominion over the funds and...
to procure a set of knives for demonstrations, however no deposit is now required. Students who work for Vector Marketing are considered independent contractor
Independent contractor
An independent contractor is a natural person, business, or corporation that provides goods or services to another entity under terms specified in a contract or within a verbal agreement. Unlike an employee, an independent contractor does not work regularly for an employer but works as and when...
s 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. 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.
Vector was sued in 1990 by the Arizona Attorney General and in 1999 by the Australian Competition and Consumer Commission
Australian Competition and Consumer Commission
The Australian Competition and Consumer Commission is an independent authority of the Australia government. It was established in 1995 with the amalgamation of the Australian Trade Practices Commission and the Prices Surveillance Authority to administer the Trade Practices Act 1974...
. In 1994, Wisconsin ordered Vector to stop providing dishonest information to recruits. 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. Vector no longer recruits in the US state of Wisconsin.
In 1996, The Washington Post
The Washington Post
The Washington Post is Washington, D.C.'s largest newspaper and its oldest still-existing paper, founded in 1877. Located in the capital of the United States, The Post has a particular emphasis on national politics. D.C., Maryland, and Virginia editions are printed for daily circulation...
reported that of "940 Vector recruits surveyed, nearly half either earned no money or actually lost money through working with the company". 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).
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. The case, Harris v. Vector Marketing Corporation, is pending a final settlement approval for US$13 million before Judge Edward M. Chen
Edward M. Chen
Edward Milton Chen is a United States District Judge on the United States District Court for the Northern District of California. On May 10, 2011, the United States Senate confirmed Chen in a 56–42 vote...
.