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Vector Marketing

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Vector Marketing
Subsidiary
IndustrySales
Founded1981
HeadquartersOlean, New York, US
ParentCutco Corporation
Websitewww.vectormarketing.com

Vector Marketing is a multi-level marketing subsidiary company and the domestic sales arm of Cutco Corporation, an Olean, New York-based cutlery manufacturer.[1][2]

History

Vector Marketing Corporation is a wholly owned subsidiary of Cutco Corporation. The firm originated in a joint venture between Alcoa and Case Cutlery known as Alcas Corporation.[3]

In 1947, It completed a factory in Olean, New York, and shipped the first set of Cutco Cutlery that year. Additionally, in 1974, Alcoa purchased Case Cutlery's share of Alcas.[4]

Executive Chairman James Stitt came to Olean in 1975 to work for Cutco, and his son, James Stitt, Jr., is currently the President and CEO.[4]

In 1981, Vector was founded in Philadelphia, PA as the sales division of Cutco Cutlery.[4]

In 1982, members of Alcas management purchased the firm in a management buyout.

Since 2005, Cutco has opened 16 retail locations where customers can try out knives, take cooking classes, garden, or learn floral arrangement.[4]

In 2009, Alcas changed its name to Cutco Corporation, with Vector its domestic sales subsidiary.[3]

Business model

The management team at Vector began their careers as sales representatives.[4] Vector Marketing is a multi-level marketing company that has built its sales force through advertising via newspapers, word-of-mouth, posted advertisements, letters and various media on the internet.[1][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.[8] 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][9]

Some of Vector's former independent contractors have accused Vector Marketing of deceptive business practices.[10][11]

The firm 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.[12]

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. However the practices have changed and representatives are no longer required to make a security deposit. They are loaned knives as well as given some as prizes for their "Fast Start" sales achievements.[10][11][13]

Students who work for Vector Marketing as independent contractors are not reimbursed for transportation expenses and other common business expenses while working, or for the time they spend at training sessions.[6][10]

Lawsuits

Vector was sued in 1990 by the Arizona Attorney General.[8] 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.[14][8]

In 1994, Wisconsin ordered Vector to stop deceptive recruiting practices, leading the company to temporarily stop recruiting in the state.[8][14][15]

In 2003, 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).[16]

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.[17] The case, Harris v. Vector Marketing Corporation, is pending a final settlement approval for US$13 million before Judge Edward M. Chen.[18][19]

A lawsuit in 2014 alleged that a girl was violently sexually assaulted by one of her customers while working for Vector and sued the company for not providing her with adequate training to prevent the situation.[20][21]

The company paid a $6.75 million preliminary settlement in 2016 for violations of the Fair Labor Standards Act in California, Florida, New York, Illinois and Michigan when workers sued for going unpaid for their trainings.[22][23][20]

In September 2017, Vector was sued in a class-action lawsuit initiated by a division manager who alleged that the company was engaging in unfair labor practices because, despite his position, he was still classified as an independent contractor, thus denying him access to overtime pay. According to the suit, division managers are the highest-ranking class of workers who are not officially classified as Vector employees.[22][23]

References

  1. ^ a b Moret, Darrin (September 6, 2013). "Did I Participate In A Pyramid Scheme?". Popular Science. Retrieved May 31, 2017.
  2. ^ Behm, Carly (October 19, 2016). "Students Question Company's On-Campus Recruiting". Loyola Phoenix. Retrieved May 31, 2017.
  3. ^ a b Shaw, Jeff (December 20, 2008). "Alcas changing its name to Cutco". Olean Times Herald. Retrieved May 26, 2018.
  4. ^ a b c d e Pride, William; Ferrell, O.C. (2020). Marketing. Cengage. pp. 395–396.
  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. Archived from the original on August 15, 2011. 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. ^ a b c d e Robbins, Rebecca (August 2, 2011). "The Company that Cuts Both Ways". Santa Barbara Independent. Retrieved August 2, 2011.
  9. ^ Episode 10. Street Cents, January 14, 2002 Online copy at the Internet Archive
  10. ^ a b c Lucchesi, Nick (February 4, 2004). "Vector Marketing targets unaware college students". News. The Journal. Archived from the original on April 27, 2011. Retrieved June 5, 2008.
  11. ^ 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.
  12. ^ Holt, Shirleen (February 22, 2004). "Help-wanted pitch may have surprise curve". The Seattle Times. Retrieved July 24, 2010.
  13. ^ Anderson, Matt (October 6, 2004). "Vector policies questionable". MTSU Sidelines. p. 1. Retrieved June 5, 2008.
  14. ^ a b McKay, Peter (July 1, 1996). "For vector marketing, the question of the hour". Washington Post. Retrieved November 7, 2018.
  15. ^ Johnson, Paul (April 21, 1994). "Vector suspends recruiting". Wisconsin State Journal. Retrieved November 7, 2018.
  16. ^ Gripenstraw, Kelsey (April 20, 2011). "Beware of Campus Scams". The Bottom Line. University of California, Santa Barbara. Retrieved May 18, 2011.
  17. ^ 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
  18. ^ "Court opinion". Harris v. Vector Marketing Corporation. Justia.com. May 5, 2011. Retrieved May 14, 2011.
  19. ^ "Preliminary approval of $13 million settlement granted despite concerns". AllBusiness.com. May 31, 2011. Retrieved February 5, 2012.
  20. ^ a b Walsh, Sam (October 14, 2018). "Vector marketing "preys on desperate students," sources allege". The Quad. Retrieved November 7, 2017.
  21. ^ Bonner, Jonny (August 22, 2014). "Door-to-Door Saleswoman Alleges Rape". Courthouse News Service. Retrieved November 7, 2018.
  22. ^ a b Zavadski, Katie (October 18, 2017). "Cutco Probably Asked You to Sell Knives. Now It's Getting Sued". The Daily Beast. Retrieved November 7, 2017.
  23. ^ a b Roffman, Otis (February 5, 2018). "Round Table editor warns of Cutco and Vector Marketing's exploitation of student labor". The Round Table. Retrieved November 7, 2018.

External links