Vector Marketing
 | This article needs additional citations for verification. (June 2007) |
| File:Vector Marketing logo.gif | |
| Company type | Private |
|---|---|
| Industry | Marketing |
| Founded | 1981 |
| Headquarters | Olean, New York |
| Revenue | $180 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, most of them college students and recent high school graduates, market Cutco products to customers via one-on-one demonstrations, fairs & shows, and through business-to-business sales. Vector recruits students through newspapers, Craigslist, direct marketing, myspace, facebook, word-of-mouth, posted advertisements, and letters sent to recent high school graduates. Their flyers advertising "student work" are a common sight on many college campuses in the United States and Canada.
Through training and work experience, representatives learn a range of skills that help them pursue careers. These include:[1]
- Presenting themselves professionally
- Demonstrating product value
- Building a customer base
- How to work for commission
- Organization/time management
Business Model
Sales reps are paid weekly on a split system. Reps receive either a base pay per appointment, or commission on products sold, depending on which is higher. Weekly commissions start at 10%, increasing in increments of 5%, up to a maximum of 30%. Monthly bonuses which can boost that figure to 50% are available for reps that achieve a monthly quota. [citation needed] Commission levels are dependent upon career sales. The company claims that their average order is $243, and the average conversion ratio or closing percentage is somewhere between 60% and 80% depending on the quality of the prospect, meaning that representatives should typically make more on their commissions than from the base pay.
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. Most 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 Summer vacation. This allows students to be able to connect with their managers since they were once in their shoes.
Over the summer of 2006, Vector also expanded to Puerto Rico with a branch office, to surmise whether or not it was a viable location for a full-time office.
Criticism
Critics have accused the company of a variety of perceived unfair and deceptive practices, including:
- Advertising a per-appointment rate in such a way that it is interpreted as an hourly rate.
- Encouraging contractors to provide a refundable deposit in exchange for a product sample kit before they can begin selling.
- Paying reps solely on performance in terms of number of appointments conducted or sales created, and not for training time or time spent on the phone.
- Advertising for "flexible hours" with constant encouragement from managers to make appointments and sell.
- Encouraging employees to attend unpaid weekly team meetings and encouraging them to attend sales training conferences, which reps must pay for.
- Heavily recruiting High School and College Students with little or no experience.
- Designating representatives as independent contractors and in doing so, not having to pay them for training. (16 hours)
David Tatar, a supervisor with the Wisconsin Consumer Protection Dept. was quoted in 1996 by the Washington Post 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]
Vector Marketing's business tactics have been targeted for criticism, specifically for deceptive recruitment practices. This was due to an ambiguous explanation of the work in the job advertisements. Vector was sued by the Arizona Attorney General in 1990, the Australian Competition and Consumer Commission in 1999, and was ordered by the state of Wisconsin not to deceive recruits in 1994. Each time their legal trouble revolved around allegedly fraudulent recruiting tactics, and each time Vector settled and promised not to mislead their recruits. In the early 2000s, Vector made what they called "transparency" changes to become more upfront about what they offered representatives. Many of the people who were in upper-level positions with Vector 10 to 15 years ago when most of the criticism occurred no longer work with the company [citation needed].
References
- ^ "High School Students Can Target Careers During the Summer". Yahoo! Finance - Business Wire. 2007-06-27. Retrieved 2007-07-23.
{{cite news}}: Check date values in:|date=(help); Cite has empty unknown parameter:|coauthors=(help); Italic or bold markup not allowed in:|publisher=(help) - ^ McKay, Peter (1996-07-01). "For Vector Marketing, the question of the hour". The Washington Post. p. F8. Retrieved 2007-07-17.
{{cite news}}: Check date values in:|date=(help); Cite has empty unknown parameter:|coauthors=(help); Italic or bold markup not allowed in:|publisher=(help)