With more and more people looking for additional sources of income in the current unprecedented times, scams are at an all-time high, exploiting the demand and need for work. In 2019, more than three million people filed reports of fraud with the Federal Trade Commission (FTC), making people warier than ever of work opportunities that require little in return for a lot.
While there isn’t a set template for scams, those following a Pyramid or Multi-Level Marketing (MLM) structure garner a significant amount of attention and concern. One prominent organization to face scrutiny is CUTCO and its marketing division, Vector. Vector Marketing has been described as multi-level marketing and as a Pyramid scheme—but are CUTCO and Vector really scams, or even a pyramid scheme at all?
What’s the Difference Between a Pyramid Scheme, Multi-Level Marketing, and Single-Level Marketing?
The three might seem the same from an outside perspective, making it seem especially easy to either fall for a scam or miss out on a legitimate opportunity.
Pyramid schemes are a marketing model in which salespeople recruit other salespeople for a company by requiring them to purchase an entry package, including the products they must sell. In return, those employees get a cut of their recruits’ sales, creating a pyramid-shaped distribution of the company’s revenue. Pyramid schemes are the only illegal model of the three as there is little return for those not at the top of the pyramid.
Multi-level marketing, or MLM, is a direct marketing strategy defined by a marketing department that doesn’t rely on centralized stores to sell its products but on independent salespeople. The similarity to pyramid schemes results from the fact that often, salespeople recruit one another and take a cut of their recruits’ profits. However, the defining factors differ.
In Single-level marketing, or SLM, a company relies on individual salespeople to directly sell their products without recruiting other salespeople. Therefore, all salespeople are paid according to their sales and do not receive a cut of their colleagues’ proceeds. CUTCO is an SLM company.
Go Right to the Source
CUTCO is aware that Vector’s model garners attention from consumers and prospective employees alike due to the increased awareness around other scams. After all, many pyramid schemes disguise themselves as genuine MLM and SLM companies to take advantage of people. In fact, CUTCO and Vector have addressed the issue themselves by providing transparent responses to questions and concerns in hopes of demonstrating that Vector Marketing is not a scam.
Main features that allow pyramid schemes to turn a profit are missing from Vector. In an SLM, employees can’t passively profit by relying on recruits. Additionally, salespeople are not required to purchase or commit to purchasing a starter kit of CUTCO’s products to sell. Vector’s sole source of income is through genuine sales of its products.
So How Does Working for Vector Work?
Vector has a solid business history dating back to 1981, before being purchased by CUTCO in 1985. The company does ‘recruit’ salespeople, but the method is closer to independent contracting or freelancing than the employment models utilized by pyramid schemes.
Vector representatives do reach out to potential salespeople and offer the opportunity to work with Vector and CUTCO. These calls are commitment-free and involve an explanation of what it’s like to work for CUTCO.
Salespeople get a guaranteed wage, in addition to commissions from products sold. CUTCO doesn’t require salespeople to go door-to-door carrying knives to sell and offers scripts for a range of outreach methods. Sellers aren’t required to go anywhere in person, and all in-person selling is paused during the COVID-19 pandemic.
Who Is CUTCO Right For?
Not every company structured around individual salespeople is a scam, although it may not be a good fit for many people. An occupation in sales isn’t for everyone. You need a particular set of skills, including being outgoing, persuasive, and likable. The most important thing is to know what you’re signing up for before committing.
MLM and SLM-structured businesses aren’t right for those in every financial situation. Generally, they work well as a side hustle but not a single source of reliable income. CUTCO and Vector are ideal for students, stay-at-home parents, those looking to develop and hone sales skills, and retired people looking to keep busy while making a little extra cash.
Some disadvantages of working with CUTCO and Vector include older or more “classic” recommended marketing techniques, the difficulty of selling expensive products, and a lack of paid time off and benefits.
Doing Your Research
When it comes to scams, scammers will always tell you what you want to hear. That’s why you should always conduct your own research before committing. Read online reviews, check the company’s history, and try contacting current or previous employees.
Established in 1949, CUTCO is a reputable company with a proven history, and the company’s knives are known for their quality and durability. The company is easy to look into and transparent about its policies, allowing you to decide what you think for yourself.
