Vector Marketing
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| File:Vector Marketing logo.gif | |
| Company type | Private |
|---|---|
| Industry | Marketing |
| Founded | 1981 |
| Headquarters | Olean, New York |
| Revenue | Over $200 million |
| Website | www.vectormarketing.com |
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 graduates, market Cutco products (mainly kitchen knives) to customers, especially their friends and family members[1] via one-on-one demonstrations, fairs & shows and through business-to-business sales.[citation needed] 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 reps 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%). 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 does not provide any professional assistance with creating and generating formal appointments with customers. The company believes that the salesperson is responsible for their own success, which means that they will not make sales appointments for the salesperson under any circumstances. The salesperson must formulate and contact consumers based on his/her own discretion and techniques. The Vector company wastes no money having as many employees and sales people as they can, because they are solely paid based on their appointments made that fit criteria.
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 reps. 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 nationally acclaimed 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. Reps 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.
Criticism
- Many former employees experience little success in the company because it has been a scam in previous years.
- Advertisements are brief due with little to no substantial information given.
- Contractors are encouraged to invest in sample kit containing knives for use in their appointments. These knives cost upwards of 200 dollars.
- Pay is based upon the number of appointments conducted or on sales made (at the representative's commission rate).
- Most if not all conferences cost money to attend.
- Employees are considered independent contractors. In tax terms, this eliminates their base wages and tax withholding but allows them tax write-offs.
David Tatar, a supervisor with the Wisconsin Consumer Protection Department, was quoted in a 1996 Washington Post article as saying "that state surveyed 940 Vector recruits in 1992 and found that almost half either earned nothing or lost money working for Vector" and "workers in that state earned less than $3 a day on average selling cutlery for Vector." [2] --67.240.52.57 (talk) 18:27, 28 May 2008 (UTC)
The company has been sued twice in the last fifteen years. The first lawsuit was from the Arizona Attorney General in 1990. In 1999 Australian Consumer and Competition Commission filed the second lawsuit. Additionally, in 1994 it was ordered by the state of Wisconsin to not deceive potential workers.
A group of college students have created an organization Students Against Vector Exploitation (SAVE) in response to the alleged bad business practices from the Vector Marketing Group. Lauren Katz, co-found of SAVE, won a case with the New York Department of Labor against Vector. Katz had argued that her duties made her an employee, and not an independent contractor, then received monetary compensation for her unpaid training. "I know others can win too, it's just a matter of standing up for your rights," Katz said to The Sea Hawk, the campus paper of UNC Wilmington.
References
- ^ Vector Marketing Street Cents Episode 10 (Canadian Broadcasting Corporation), January 14, 2002
- ^ McKay, Peter (1996-07-01). "For Vector Marketing, the question of the hour". The Washington Post. p. F8. Retrieved 2007-07-17.
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