Just a few days ago, my friend excitedly informed me that she got a great job compensating $17/hr. I was skeptical about such a glorious prospect simply because: who would want to employ the most inexperienced and least skilled members of the labor force (teenagers) at such a high rate? I asked my friend about the company she worked for. Who owned the company? Where are the stores located? What did her responsibilities entail? Piecing it all together along with a bit of research, I present to you the “Cutco Business Model”. Using its seemingly high pay rate to lure in unsuspecting students, the Vector Marketing teams proceeds to glorifying its company and products through presentations of its high performance knives and cutlery set and its success in the market. The “employees”, hired as independent contractors not bound by the law to be compensated for training hours, are then told in workshops to invest (purchase) in their own Cutco kitchen demo set of knives which they will be using during appointments with clients to display the wondrous cutting power that their knives embody.
This I will say: the knives are high quality, but prices are ridiculously high ($500-$4000). There in lies the beauty of the Cutco business model. Students working for them are told to market the knife sets to their personal network. I know that this leads to a pity party in that friends and family of the student will be supportive/guilt tripped into buying these pricey knife sets which they can ultimately live without after the student spends many hours persuading through demos and speeches alike. I feel that this business model completely disregards the value of personal relationships. Relating to the discussions on shared value, Cutco is doing the exact opposite: it’s trying to maximize profits by taking advantage of unknowing students and their close contacts while staying within the limits of the law. Persuading friends to buy products for the sake of retaining a job will ruin friendships or strain them in the least. I believe this business model is unsustainable as the student will eventually run out of close connections to market the product to – and this is exactly what happens which is why Cutco has to continually recruit new students to join the selling force as students who can’t sustain their selling levels quit. Relating to the discussions on shared value, Cutco is doing the exact opposite: decreasing