Vector Marketing

Vector Marketing is a multi-level marketing subsidiary company and the domestic sales arm of Cutco Corporation, an Olean, New York-based cutlery manufacturer. The company was founded in 1981 in Philadelphia, Pennsylvania.
The company sells via individual sales representatives who sell Cutco cutlery via one-on-one demonstrations, typically through home visits. The company has been the subject of criticism and lawsuits for its business practices. Salespeople are generally young and recruited from high school or college; Vector's recruitment tactics have been described as deceptive. Vector denies being a multi-level marketing company, but most sources agree that it is. However, the company is not technically a pyramid scheme as its detractors claim, as it does sell a product. The company has faced numerous lawsuits over its pay structure and treatment of its salespeople, who are mostly independent contractors instead of employees.
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. 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. Executive Chairman James Stitt came to Olean in 1975 to work for Cutco; his son, James Stitt, Jr., later went on to serve as President and CEO as of 2020.
In 1981, Vector was founded in Philadelphia, PA as an independent seller of Cutco Cutlery products. In 1985, 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.
In 2009, Alcas changed its name to Cutco Corporation, with Vector its domestic sales subsidiary.
In 2019, Vector Marketing reported $273.8 million in sales.
Business model.
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. Vector denies being a multi-leveling marketing company, or a pyramid scheme, but the Los Angeles Times says that it meets the Federal Trade Commission's exact definition of a multi-level marketing company. However since it does actually sell a product, it is not technically a pyramid scheme.
The company recruits sales representatives from high schools and college campuses in the United States and Canada, sometimes through misrepresentation of affiliation with the school. Sales representatives 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.
Some of Vector's former independent contractors have accused Vector Marketing of deceptive business practices. The firm frequently advertises in newspapers and on fliers posted on bulletin boards at college campuses, but the advertisements are often vague without explaining the nature of the job. The LA Times advised caution to potential employees, who are often young and never had a job before. The company's recruitment practices often obfuscate the actual work they do, merely offering a good paying job without noting that the pay structure is based around selling knives by commission.
Vector Marketing's compensation policies have also been 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. Sales representatives are loaned knives as well as given some as prizes for their "Fast Start" sales achievements. Students who work for Vector Marketing are independent contractors and are not reimbursed for the time they spend at training sessions.
Lawsuits.
In 1990, Vector was sued by the Arizona Attorney General. 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.
In 1994, Wisconsin ordered Vector to stop deceptive recruiting practices, leading the company to temporarily stop recruiting in the state.
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).
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. In 2011, Vector settled the lawsuit, "Harris v. Vector Marketing Corporation", for $13 million.
In 2014, a lawsuit 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.
In 2016, the company paid a $6.75 million preliminary settlement 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.
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.