High wages for student work – but beware

The flyers posted around campus entitled “Work For Students: $13.25 Base Pay” are commonly attractive not only for their assortment of neon colors, but the potential for lucrative earnings for a college student. Questions of legitimacy will automatically arise with some, this however is a real corporation.

“Our annual sales figures exceeded $120 million,” says Sarah Andrus, the director of Academic Programs for Vector Marketing. Established in 1949, Vector Marketing is a vendor for another company, Cutco, which produces a variety of knifes and accessories. Cutcos products are then sold through direct selling by the independent contractors hired by Vector Marketing. Essentially, those that are contracted out by Vector to sell products perform one-on-one selling, go to people they already know and attempt to sell them Cutco knifes through demonstrations of the product.

The majority of this is done in the home of the person you are selling to. Thus, the pay that is received by independent contractors is either the $13.25 per appointment that you have, or your commission off the number of sales you made that week, which ever is higher.

“Over 85% of our independent contractors are college students,” remarked Andrus.

Successful independent contractors or distributors of Vector should be those who “are comfortable with selling products and are very proactive and self-motivated.”

“No one will call or force you to get up in the mornings or set up your appointments,” she said.

The concept of students being hired as “independent contractors” is an important one. With Vector Marketing’s direct selling positions you are not an employee. This is because Vector is a Multi-Level Marketing group. In an effort to inform consumers the Federal Trade Commission’s website defines: “Multilevel marketing plans, also known as “network” or “matrix” marketing, are a way of selling goods or services through distributors. These plans typically promise that if you sign up as a distributor, you will receive commissions. For both your sales of the plan’s goods or services and those of other people you recruit to join the distributors.”

In 1997, the FTC announced it may begin to review the rules concerning business opportunities (which includes MLMs and companies similar to Vector Marketing).

“This is a regular part of FTC Procedures,” commented Jackie Dizdul of the FTC. In April 2006, the FTC announced possible rule changes for business opportunities.

“Many of the proposed changes are designed to protect consumers,” said Dizdul.

These include a variety of changes. One of the biggest includes companies being able to essentially back up the claims they are making about earning potential. Companies would no longer be allowed promote “Make $40,000 a week,” without backing it up. Other changes would prohibit companies from various other related practices, like not honoring refunds on initial investments into these types of programs, and misrepresenting “material relationships” between the company and the distributor.

The FTC doesn’t condemn or prohibit Multi-Level Marketing Plans, but they do have several suggestions for being cautious with these types of businesses. Certain things according to Dizdul should “raise a few eyebrows” for consumers.

Being forced to buy or make large investments up front, plans that promise that growth through the sales of those you recruit into the program, rather than your own sales, and being put into high pressure situations very quickly.

Ultimately the question relates back to the real-world experience of students with the company.

“I would not recommend this to other students, but I believe Vector is a good company” said William Bell, a former Vector seller. “If you are cut out for direct selling then this is for you, despite the high pressure.”

But Vector also seems to have a number of downsides “You have to attend weekly meetings you don’t get paid for, you don’t get paid for gas,” said Bell.

All former employees did not seem to have the same experience however.

“They wouldn’t leave me alone, they would call non-stop, even after I told them I wasn’t doing any appointments today,” said a former employee, who requested to remain anonymous. “It was very stressful, training was horrible, you had three days of training that you didn’t get paid for.”

“The most important thing is to do your homework with any company,” says Dizdul. “The FTC is actually one of the few agencies which wants your complaints.”

She urges consumers in regard to any business topics to please report them to the FTC so they make do more to protect consumers.

For more information about potential job opportunities with Vector Marketing visit (www.workforstudents.com) For more information about the Federal Trade Commission recommendations about potentially bad MLM’s visit www.ftc.gov/bcp/conline/pubs/invest/mlm.htm.