Vector Marketing

2025-10-07T14:59:05Z

2605:4A80:2001:5C80:0:0:0:11A8:

{{short description|American direct selling company}}
{{Use mdy dates|date=July 2011}}
{{Infobox company
| logo = Vector Marketing logo.svg
| name = Vector Marketing
| type = [[Subsidiary]]
| foundation = 1981
| location = [[Olean, New York|Olean]], New York, US
| num_employees =
| parent = [[Cutco Corporation]]
| industry = [[Direct Sales]]
| revenue =
| products =
| homepage = {{URL|http://www.vectormarketing.com/}}
}}

'''Vector Marketing''' is a [[direct selling]] subsidiary company and the [[marketing]] arm of [[Cutco|Cutco Corporation]], an [[Olean, New York|Olean]], [[New York (state)|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 and has been accused of being a [[multi-level marketing]] company. The ''[[Los Angeles Times]]'' states that Vector meets the [[Federal Trade Commission]] (FTC) definition of a [[multi-level marketing]] company which is "businesses that involve selling products to family and friends and recruiting other people to do the same" because they sell their product through person-to-person sales. The FTC has not publicly referred to Vector as an MLM (though they have fined the company for deceptive telemarketing practices<ref>{{Cite web |date=2004-06-29 |title=FTC Puts Halt to Fraudulent Do Not Call Service |url=https://www.ftc.gov/news-events/news/press-releases/2004/06/ftc-puts-halt-fraudulent-do-not-call-service |access-date=2025-04-07 |website=Federal Trade Commission |language=en}}</ref>). Salespeople are generally young and recruited from high school or college; Vector's recruitment tactics have been described as deceptive, and they have faced numerous lawsuits over their pay structure and treatment of its salespeople, who are [[Independent contractor (USA)|independent contractors]] instead of employees. Vector claims they are a single-level direct selling marketing company, not a multi-level marketing company or a [[pyramid scheme]].

== History ==
Vector Marketing Corporation was founded in 1981 by Don Freda in [[Glenolden, Pennsylvania]], as an independent seller of Cutco Cutlery products manufactured by the Alcas Corporation.<ref name="freda">{{cite web |last1=Freda |first1=Don |title=Vector History |url=https://www.donfreda.com/vector-history.html |website=Don Freda |access-date=15 November 2021 |language=en}}</ref><ref name=":3">{{Cite web|title=WHO WE ARE|url=https://www.vectormarketing.com/who-we-are|access-date=2021-03-24|website=Vector Marketing}}</ref> It quickly became one of the top sellers of Cutco products, and in 1985, it was acquired by Alcas, which was struggling with sales following its split from former parent company [[Alcoa]] in 1983.<ref name=":3" /><ref name="freda" />

In 2009, Alcas changed its name to [[Cutco|Cutco Corporation]], with Vector as its domestic sales subsidiary.<ref name=":0">{{Cite news|url=http://www.oleantimesherald.com/news/alcas-changing-its-name-to-cutco/article_01a12262-7546-5627-9108-790b5b8b522b.html|title=Alcas changing its name to Cutco|last=Shaw|first=Jeff|date=December 20, 2008|work=Olean Times Herald|access-date=May 26, 2018|language=en}}</ref>

In 2019, Vector Marketing reported $273.8 million in sales.<ref>{{Cite web|title=Sharpening Strategy and Leadership|url=https://www.vistage.com/perspective/sharpening-strategy-and-leadership/|access-date=2020-11-19|website=Vistage|language=en-US}}</ref>

==Business model==
Vector Marketing is a [[direct selling]] company that has built its sales force through advertising via newspapers, [[word-of-mouth]], posted advertisements, [[mail|letters]] and various media on the internet.<ref name="PS">{{cite news|last1=Moret|first1=Darrin|date=September 6, 2013|title=Did I Participate In A Pyramid Scheme?|publisher=[[Popular Science]]|url=http://www.popsci.com/science/article/2013-09/did-i-participate-pyramid-scheme|access-date=May 31, 2017}}</ref><ref>{{cite news|last=Kellman|first=Beth Robinson|title=Better Business Bureau offers advice on multilevel marketing|url=http://www.theoaklandpress.com/articles/2010/04/02/news/local_news/doc4bb6bcef66c20482812527.txt?viewmode=fullstory|access-date=May 19, 2011|newspaper=[[The Oakland Press]]|date=April 2, 2010|location=[[Oakland County, Michigan]]|archive-date=August 25, 2012|archive-url=https://web.archive.org/web/20120825115810/http://www.theoaklandpress.com/articles/2010/04/02/news/local_news/doc4bb6bcef66c20482812527.txt?viewmode=fullstory|url-status=dead}}</ref><ref name="carolinian">{{cite news|last=Deal |first=A. Matthew |title=High wages for student work – but beware |work=Campus News |page=1 |publisher=The Carolinian |date=September 26, 2006 |url=http://www.carolinianonline.com/2.7350/high-wages-for-student-work-but-beware-1.1030148 |access-date=June 5, 2008 |url-status=dead |archive-url=https://web.archive.org/web/20110815175911/http://www.carolinianonline.com/2.7350/high-wages-for-student-work-but-beware-1.1030148 |archive-date=August 15, 2011 }}</ref><ref name="Wall Street Journal">{{cite news|last=Gunn|first=Eileen|title=Summer Job: Nice Pay, if You Can Cut It|url=https://www.wsj.com/articles/SB121789140861111649|access-date=April 21, 2011|newspaper=[[The Wall Street Journal]]|date=August 5, 2008|page=D4}}</ref> The ''[[Los Angeles Times]]'' claims that Vector meets the [[Federal Trade Commission]] (FTC) definition of a [[multi-level marketing]] company because they sell their product through person-to-person sales, but Vector argues that they employ single-level marketing and don't meet the FTC definition of "businesses that involve selling products to family and friends and recruiting other people to do the same"<ref name="FTC">{{cite web |title=Multi-Level Marketing Businesses and Pyramid Schemes |url=https://www.consumer.ftc.gov/articles/multi-level-marketing-businesses-and-pyramid-schemes |website=Consumer Information |publisher=Federal Trade Commission |access-date=4 November 2021 |language=en |date=18 May 2021}}</ref> because higher-level employees don't profit from the revenue of people they recruit.<ref>{{Cite web|title=Is Vector a Scam? No. {{!}} Vector Marketing|url=https://www.vectormarketing.com/app/vector-truth|access-date=2020-08-08|website=Vector Marketing (US)|language=en}}</ref><ref name=":2">{{Cite web|author=David Lazarus|date=2020-06-23|title=Column: Beware of this 'important opportunity' for job-seeking students|url=https://www.latimes.com/business/story/2020-06-23/cutco-knives-job-letter|access-date=2020-08-08|website=Los Angeles Times|language=en-US}}</ref> The company has paid millions of dollars in lawsuits alleging deceptive recruiting practices.<ref name=":2" /> Cutco does sell products, but they derive a large portion of their sales from new employees, their families, and friends.

The company recruits sales representatives from high schools and [[college campus]]es in the United States and Canada, sometimes through misrepresentation of affiliation with the school.<ref name="LP">{{cite news|last1=Behm|first1=Carly|title=Students Question Company's On-Campus Recruiting|url=http://loyolaphoenix.com/2016/10/students-question-companys-campus-recruiting/|access-date=May 31, 2017|publisher=[[Loyola Phoenix]]|date=October 19, 2016}}</ref><ref name="SB1">{{cite web|url=http://www.independent.com/news/2011/aug/02/company-cuts-both-ways/|title=The Company that Cuts Both Ways|author=Robbins, Rebecca|date=August 2, 2011|publisher=Santa Barbara Independent|access-date=August 2, 2011}}</ref> Sales representatives are employed as [[independent contractors]] to sell Cutco products (mainly [[kitchen knife|kitchen knives]]) to customers, typically their friends and family members, via one-on-one demonstrations.<ref name="SB1" /><ref name="cbc">Episode 10. [[Street Cents]], January 14, 2002 [https://web.archive.org/web/20120618131050/http://www.cbc.ca/streetcents/archives/guide/2001/10/s02_01.html Online copy] at the [[Internet Archive]]</ref>

Some of Vector's former independent contractors have accused Vector Marketing of deceptive business practices.<ref name="websteruniv">{{cite news|last1=Lucchesi|first1=Nick|title=Vector Marketing targets unaware college students|url=http://media.www.webujournal.com/media/storage/paper245/news/2004/02/04/News/Vector.Marketing.Targets.Unaware.College.Students-596811.shtml|access-date=June 5, 2008|work=News|publisher=The Journal|date=February 4, 2004|archive-url=https://web.archive.org/web/20110427204416/http://media.www.webujournal.com/media/storage/paper245/news/2004/02/04/News/Vector.Marketing.Targets.Unaware.College.Students-596811.shtml|archive-date=27 April 2011}}</ref><ref name="Statesman">{{cite news|last=da Costa|first=Polyana|title=Firm misled sales recruits to sell knives, students say|url=http://news.statesmanjournal.com/article.cfm?i=85450|newspaper=Salem Statesman-Journal| date=August 21, 2004|archive-url=https://archive.today/20080704103247/http://news.statesmanjournal.com/article.cfm?i=85450|archive-date=July 4, 2008}}</ref> 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.<ref>{{cite news|last=Holt|first=Shirleen|title=Help-wanted pitch may have surprise curve|url=https://archive.seattletimes.com/archive/20040222/jobads22/help-wanted-pitch-may-have-surprise-curve|access-date=July 24, 2010|newspaper=The Seattle Times|date=February 22, 2004}}</ref> ''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 on selling knives by commission.<ref name=":2" />

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.<ref name="websteruniv" /><ref name="Statesman" /><ref name="sidelines">{{cite news|last=Anderson|first =Matt|title =Vector policies questionable|page =1|work=MTSU Sidelines|date =October 6, 2004| url=http://media.www.mtsusidelines.com/media/storage/paper202/news/2004/10/06/News/Vector.Policies.Questionable-743131.shtml|access-date =June 5, 2008}}</ref> Those who work for Vector Marketing are [[independent contractor]]s and are not reimbursed for the time they spend at training sessions.<ref name="carolinian" /><ref name="websteruniv" />

==Lawsuits==
{{Excessive citations|section |date=February 2024}}
In 1990, Vector was sued by the [[Arizona Attorney General]].<ref name="SB1"/> 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.<ref name="WaPo1996"/>

In 1994, Wisconsin ordered Vector to stop deceptive recruiting practices, leading the company to temporarily stop recruiting in the state.<ref name="WaPo1996">{{cite news |last1=McKay |first1=Peter |title=For vector marketing, the question of the hour |url=https://www.washingtonpost.com/archive/business/1996/07/01/for-vector-marketing-the-question-of-the-hour/27351801-eb79-49c0-93e9-ca9c73cc648e/ |access-date=November 7, 2018 |newspaper=[[Washington Post]] |date=July 1, 1996}}</ref><ref name="WSJ1994">{{cite news |last1=Johnson |first1=Paul |title=Vector suspends recruiting |url=https://newspaperarchive.com/madison-wisconsin-state-journal-apr-21-1994-p-51/ |access-date=November 7, 2018 |publisher=[[Wisconsin State Journal]] |date=April 21, 1994}}</ref>

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).<ref name="ConsAff">{{cite web |title=Student Group Wants to Slice Up Vector |date=August 12, 2003 |url=https://www.consumeraffairs.com/news03/save.html |publisher=Consumer Affairs |access-date=June 16, 2020}}</ref><ref name="UPFAU">{{cite news |title=The truth behind the poster |url=https://www.upressonline.com/2009/09/the-truth-behind-the-poster |access-date=June 16, 2020 |publisher=University Press (Florida Atlantic University) |date=September 14, 2009}}</ref>

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.<ref>{{Cite journal|last=Chen|first=Edward M.|title=Order Granting in Part and Denying in Part Defendant's Motion for Summary Judgment|url=http://docs.justia.com/cases/federal/district-courts/california/candce/3:2008cv05198/208948/71/|journal=Harris V. Vector Marketing Corporation|publisher=[[United States District Court for the Northern District of California]]|date=September 4, 2009}}</ref><ref>{{cite web| title=Preliminary approval of $13 million settlement granted despite concerns|publisher=AllBusiness.com| url=http://www.allbusiness.com/north-america/united-states-west-usa-california/15613799-1.html |access-date=Feb 5, 2012|date=May 31, 2011}}</ref><ref>{{Cite web|title=Harris v. Vector Marketing Corp. - Casetext Smarter Legal Research|url=https://casetext.com/case/harris-v-vector-marketing-corporation-11|archive-url=https://web.archive.org/web/20201112020111/https://casetext.com/case/harris-v-vector-marketing-corporation-11|url-status=dead|archive-date=November 12, 2020|access-date=18 May 2021}}</ref> In 2011, Vector settled the lawsuit, "Harris v. Vector Marketing Corporation", for $13 million.<ref name=":2" />

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.<ref name="Quad2018"/><ref name="CNS2014">{{cite news |last1=Bonner |first1=Jonny |title=Door-to-Door Saleswoman Alleges Rape|url=https://www.courthousenews.com/door-to-door-saleswoman-alleges-rape/|access-date=November 7, 2018 |publisher=[[Courthouse News Service]] |date=August 22, 2014}}</ref>

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.<ref name="TDB2017">{{cite news |last1=Zavadski |first1=Katie |title=Cutco Probably Asked You to Sell Knives. Now It's Getting Sued |url=https://www.thedailybeast.com/cutco-probably-asked-you-to-sell-knives-now-its-getting-sued |access-date=November 7, 2017 |publisher=[[The Daily Beast]] |date=October 18, 2017}}</ref><ref name="TRT2018">{{cite news |last1=Roffman |first1=Otis |title=Round Table editor warns of Cutco and Vector Marketing's exploitation of student labor |url=http://beloitcollegeroundtable.com/2018/02/05/round-table-editor-warns-of-cutco-and-vector-marketings-exploitation-of-student-labor/ |access-date=November 7, 2018 |publisher=The Round Table |date=February 5, 2018}}</ref><ref name="Quad2018">{{cite news |last1=Walsh |first1=Sam |title=Vector marketing "preys on desperate students," sources allege |url=https://wcuquad.com/6012068/news/vector-marketing-preys-on-desperate-students-sources-allege/ |access-date=November 7, 2017 |publisher=The Quad |date=October 14, 2018}}</ref>

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.<ref name="TDB2017"/><ref name="TRT2018"/>

==References==
{{reflist|30em}}

==External links==
{{Spoken Wikipedia|Vector_marketing_spoken_word.ogg|date=2011-08-16}}

*{{official website|http://vectormarketing.com/}}

{{Multi-level marketing}}

[[Category:Companies based in Cattaraugus County, New York]]
[[Category:Multi-level marketing companies]]
[[Category:Privately held companies of the United States]]
[[Category:Retail companies established in 1981]]
[[Category:1981 establishments in New York (state)]]
[[Category:American companies established in 1981]]
[[Category:American corporate subsidiaries]]
[[Category:Olean, New York]]

Vero - Wikipedia - User contributions [en]

Vector Marketing