Vector Marketing

Vector Marketing

Type	Private
Industry	Marketing
Founded	1981[1]
Headquarters	Olean, New York, US
Key people	Unknown[1]
Website	www.vectormarketing.com

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Vector Marketing is the domestic sales arm of Cutco Corporation, an Olean, New York based cutlery 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 Alcoa and Case Cutlery. The factory in Olean, New York was completed in 1947, and the first set of Cutco Cutlery was shipped to New Kensington, Pennsylvania that same year. Alcoa purchased Case's of shares in the company, all within the year of 1974.^[1]

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.^[2][3]

Vector began as an independent distributor of Cutco Cutlery in 1981. In 1985, the company was purchased by Alcas Corporation, which changed its name to Cutco Corporation in 2009. In 1990, Vector Marketing expanded into Canada.^[1]

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.^[4]

Business model

Vector Marketing is a single-level direct sales group that builds its work force through advertising via newspapers, direct marketing, word-of-mouth, posted advertisements, letters and various media on the internet.^[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.^[4] 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.^[4][8]

Business memberships

Vector Marketing is a member of the Direct Selling Association.^[9]

Controversy

Some of Vector Marketing's former independent contractors have accused Vector Marketing of deceptive business practices.^[10][11][12] 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.^[13]

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.^{[11][12][14][15]} Students who work for Vector Marketing are considered independent contractors 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.^[6][11] 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.^[16]

Vector Marketing has been sued several times. 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).^[17] 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.^[18] The case, Harris v. Vector Marketing Corporation, is pending a final settlement approval for US$13 million before Judge Edward M. Chen.^[19][20] Vector was sued in 1990 by the Arizona Attorney General.^[21] 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.^[22]

References