Vector Marketing - A tricky scam or an exceptional opportunity?

[charlottecharade]

I was recently introduced to Vector Marketing Corpration by a friend. It sounded like a good, solid job with capabilities to succeed. They promise "college/university students and graduates exceptional career opportunities in sales and sales management." Also, a hefty base pay of $17.70 per appointment draws many motivated, money-hungry people into this business.

I scheduled my interview last Tuesday at 12pm, and was able to come in at 5pm the same day for my 90 minute interview. I got the job, and the 18-hour, three-day training seminar was to start on Thursday.

Saturday was the last day of our training sessions, which ended at about 4pm. Almost all of us had appointments scheduled within an hour or so on that same day.

When I told my friends about my new job they were wary. One of them mentioned that Vector called them twice, offering them an "excellent job." Sure enough, they blindly scheduled an interview with the company. However, they decided to do a little research on the company before attending the interview. SMART MOVE.

Well I did some research myself and this is what I found: SCAM SCAM SCAM.

The Truth About Vector Marketing Group - Associated Content

Vector Marketing Forum - Vector marketing-- Big scam | Indeed.com

Student Group Wants to Slice Up Vector

THESE ARE MY TOP REASONS WHY THIS MAY BE A SCAM:

1. You must pay a refundable $146 fee for the knives you will take to customers to sell. If the company had enough money on its own, it would not need your money. They would simply let you BORROW the knives and return them when you are done with them.

2. The office hardly implies that this business is successful. Plastic chairs, cluttered walls, un-organized file cabinents, an strangely relaxed business atmosphere...if a business was successful wouldn't they want to present themselves in a polished, professsional way? Ditch the plastic lawn chairs. That's just lame.

3. They offer you a high starting pay: $17.70. Again, if the company was successful, they wouldn't need your money from the starter kit. Where do they get the money to pay each employee such a ridiculous amount?

4. You first start selling to your friends and family. Smart move on Vector's part. They know your parents and relatives will buy from you, not because they necessarily NEED the knives, but because they feel a bit "sorry" for you and want to help you out. After all, they are just being supportive of you. The company sees this as an opportunity to not only rip YOU off for purchasing the $146 starter kit, but an opportunity to rip your friends, family, and relatives off as well.

5. People posting on blogs/forums, raving about the excellence of Vector, may be the same person.

Check out this story:

"Over the years I have honed my ability to recognize one person using several screen names to incite forum/IRC riots or just be a troll. Now on the forums where there were VC discussions and I had moderator rights I could see the IP addresses of the forum members. As I browsed the posts that were seemingly scripted and very similar to each other from several different people I noticed that they all came from the same subnet. Meaning that all of these people posting rants of valor about Vector-Cutco about how totally awesome they are were in the same building or at least using the exact same service provider. That’s a pretty tough thing to just happen by accident, my friends and I all have the same cable provider, but we all are on different subnets since we are in different areas of the city. So these guys had to be in the same building or on the same block." (dracolich.com » Vector-Cutco Scam)

6. Something is fishy about this company. From the minute I stepped into that cramped, messy, music-blaring office, I felt something wasn't right. Maybe my gut-feelings are true. I am still trying to figure out this whole mess of a company.

That being said...

What is your opinion about this company? Have you ever had any experience with it? Do you think it's a worthwhile "job" to pursue?

[openeyes]

Originally Posted by charlottecharade

1. You must pay a refundable $146 fee for the knives you will take to customers to sell. If the company had enough money on its own, it would not need your money. They would simply let you BORROW the knives and return them when you are done with them.

If they actually let you borrow the knives rather than pay a deposit, they may have to start being selective in who they hire. As it is, they can simply act like they are. They really will refund your deposit if you choose to return the pack as I did, though likely few people ever do. A benefit to this open door policy is that people who may not have otherwise been hired get a chance at building experience.

Originally Posted by charlottecharade

3. They offer you a high starting pay: $17.70. Again, if the company was successful, they wouldn't need your money from the starter kit. Where do they get the money to pay each employee such a ridiculous amount?

As you'll be dealing with sympathetic friends and family at first there's a good chance you'll get enough sales to make $17.70 per appointment worthwhile to the company, given the high markup of the knives. Realize that it isn't $17.70 + your commission. It's your commission plus what it takes for all of your appointments during the pay period to average at least $17.70, which may be nothing.

Originally Posted by charlottecharade

4. You first start selling to your friends and family. Smart move on Vector's part. They know your parents and relatives will buy from you, not because they necessarily NEED the knives, but because they feel a bit "sorry" for you and want to help you out.

To do well with this you will need either a LOT of sympathetic friends and family, or lots of good referrals. Probably both.

The knives are moderately good, worth at least a fifth the asking price because of the warranty and their sharpness. I sold them for about three months and everyone I came across who'd gotten them before was quite happy with them even decades later. Still, I came across a number of sites just as you have now, and had my doubts. I eventually realized that the knives were at least an okay product, so you needn't worry that you're selling loved ones a crap product, perhaps just an overpriced one (I've since bought knives at a local store for 10-20% of cutco's price that are about as sharp and more user friendly). Cutco did spoil me as far as sharpness goes, and I can't stand dull knives any more.

Most people never sharpen their knives, so it's useful to have something with a warranty that covers that (for the few people who actually use it). If I were going to buy cutco for myself now, I'd likely pop on ebay and buy them for about what they're worth, and if I want, I could then mail them in to cutco to have them refurbished for a few dollars shipping, as the lifetime warranty transfers to whoever owns the knife at any given time.

I stopped selling cutco when I no longer felt it was the best deal, particularly since in order for it to be profitable to me, people had to buy more than they really needed. Even with my manager being generally good, when I called him about a little old lady having a full set that was ~40 years old, he suggested having her buy a new set ($800+) rather than reminding her she could have all of them refinished or replaced for the cost of shipping. When I had tried selling it to strangers, while Vector so often claimed that the knives virtually sold themselves, I found that wasn't usually the case. I had one of the best sales rates in the office starting out, and met some very nice people along the way, but it was difficult to get useful referrals from friends of friends. If you can sell cutco to people who don't know you, get referrals from them, sell to those referrals and keep repeating the cycle as Vector makes it sound like it's so easy to do, then sure, it could be a fine income opportunity. My observations showed me that few people last more than a few weeks though.

In thinking about it, Vector is set up quite well for making money for themselves, but not for the sales reps. Commissions start at 10%, and new reps are encouraged to list as many friends to apply for the job as possible before they've even finished training. By the time the first group of kids is washing out, rarely getting anywhere near the lauded 50% payscale, a new group of enthusiastic kids is ready to list their friends, and go out and sell at 10% commission again. Vector doesn't have to pay to find customers, to cover gas or meals, healthcare or anything. Also, while they act like an average appointment is only about an hour, after a while assistant managers mentioned that they usually take at least 1.5 to 2 hours per meeting. This is in addition to drive time. Thus it's not the implied $17.70 per hour. And you will be spending many, many hours on the phone seeking appointments. It can be good experience though if you can think of it as an internship, at least at first.

I went to one of the big conferences and was somewhat disappointed to see how the very best salespeople were making only $100-200 grand per year. That may sound like a lot, particularly for someone who has never been in sales, but the people making that money could have likely been making several times as much elsewhere as they were incredibly gifted. There are a number of aspects to the Vector sales model that cripple the ability of normal reps to make serious money. A big one is that you're wholly reliant upon referrals. Another is the payment method. The big knife sets for $800 to more than 2 grand, and yet it has to be paid off within a few months. My first sales job was door to door (not always optimal, but certainly one way of drumming up business when one doesn't know anyone in the area) selling a $1500 item to be paid for over a period of 36 months. Salesmen could enter an area knowing no one and make $100 to a couple grand per day, much, much more than with the Vector model.

Final assessment: though it apparently depends a lot on whether you get a good office or not, my managers were generally honest, and the product was fine. If you want sales experience and don't need it to be profitable at first, it may be worthwhile trying out. I've looked at three different companies that use students for sales and ultimately worked for two of them for 2-3 months each. Two were fairly honest and paid about as well as one might expect an internship to, their training was okay, and they seemed to care about the reps to some degree. The other one had great income potential, but on an integrity scale seemed like the next Enron.

Sales is the 2nd best paying profession in the world, after entertainment, and women tend to do better at it on average than men. Though Vector wasn't the best paying, I felt that had I had their training for my earlier sales job I'd have done much better, so you may get some benefit from it yet. A sales job can be a good challenge to make you grow past your old comfort zone.

[Addict]

I have a small piece of advice. I was almost was taken in by Southwestern, a similar company I believe. Instead of making appointments to sell knives, you get relocated for an entire summer to sell textbooks door to door. The whole operation seemed a bit fishy. The two things that I realized while going to their "group interview" session were:

1) They need you more than you need them- They really focused entirely on what they were going to offer you (which was inflated I'm sure). Compare this to a normal job interview where there is talk of compensation, but it's largely about what you can provide the company.

2) They would hire anyone- There was never any hint that they would actually refuse anyone; they tried to make it seem like they were selective, but they were setting up group interviews by calling everyone they could find! If they would hire anyone, do they really expect everyone they hire to be successful? Of course not. This company had nothing to lose. If you failed, it was your problem. In a typical employment setting, it's way too costly to hire people you expect to fail. You've got to train them and pay them.

So in general, I would look out for opportunities were the company isn't selective at all and they build you up and list off tons of benefits instead of asking about your qualifications. It just doesn't make sense.

[openeyes]

Originally Posted by Addict

I was almost was taken in by Southwestern, a similar company I believe.

Very similar. It was the first sales company I looked at, but I dropped the idea before they headed off for the summer once I had a better understanding of the setup. Someone else asked about it a few months ago here: Southwestern Company, a scam?

Hopefully I'll eventually come across a well-paying sales company with some degree of integrity, a company I can enthusiastically recommend with good conscience.

[sv800]

Every time I see "money upfront" to get a job or getting involved in a selling scheme I smell rat...

I do not have much information about those expensive knives, but selling consumer items will worth when buying from manufacturers:

I know Alibaba Manufacturer Directory - Suppliers, Manufacturers, Exporters & Importers is valuable when looking for the right item for the right market...

Maybe someone have experience going this way...