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February 9, 2009

Specialty Kitchen Knife Sales Thrive During Recession

During our current recession, the hardest our economy has been hit since World War II, people are spending less and trying to save money any way they can. Despite the present hard financial times, sales of specialty kitchen cutlery continue to rise for one Southwest County outlet.

According to North County Times, sales of Vector Marketing who market Cutco Cutlery, drove the Temecula office to the top rung for new company offices last year with $537,000 in sales, and so far this year are up in the company’s western region.

All kitchen knife sets, accessories and sporting knives that were sold last year, contributed to the Olean, NY-based company’s sales totaling $203 million. All Cutco Cutlery is sold directly to consumers, through Vector Marketing independent contractors working out of offices such as the regional office in Temecula. The majority of salespeople working out of this office are college students, some are non-students in their 20s and 30s, one saleswoman is 60 years old.

Jack Gillette of Hemet is a full time student at UC Riverside, who has been working the Southwest County territory since shortly after the office opened last May. So far he has sold $17,300 in Cutco Cutlery, earning about $5,000 in total commissions. He as well as other Vector Marketing salespeople, move up a commission schedule that begins at 10 percent and tops out at 50 percent. The average sale in the Temecula office is about $280, which buys a starter set of kitchen knives. A 32-piece professional set costs $1,999 and a 12-place set of flatware costs $1,000.

On a typical week, Gillette will present as many as 10 demonstrations at various homes around the area through referrals. Vector Marketing approximates at least half of these demos will turn into sales, and from those sales come another set of personal referrals.

Experts feel Gillette and other Vector salespeople are benefiting from several converging factors:

• Increased interest in home cooking, evidenced by the success of the Food Channel.
• The cocooning phenomenon that occurs during recessions. “When growth of the U.S. economy slows, consumer spending on housewares remains steady,” said Phil Brandl, president of the Rosemont, IL-based International Housewares Association. U.S. housewares' sales in 2007, the latest year for which figures are available, totaled $76.3 billion, up from $72.8 billion the year before.
• A trend toward buying quality goods.
• A “forever” guarantee by a company with a long heritage. Cutco was founded in 1949. "It's a really good product," said Greg Stoffel, an Irvine-based retailing expert.
• Selling directly to consumers through personal referrals. “Anytime you know someone, it helps a lot,” Stoffel said.

Vector Marketing is a direct-sale company, meaning its products are sold to the consumer with no middle-level salespeople deriving income from those below them. Vector Marketing steers clear of sales parties, selling in stores, and cold calling.

So why does the direct-selling formula work in an era of viral marketing, electronic sales, and mega-stores? The answer remains somewhat of a mystery.

George Belch, a San Diego State University marketing professor, says it’s surprising that the Vector direct sales formula still works. However, he notes the company’s good reputation helps, and its well-trained and persistent salespeople know how to use referral networks well. “And they are passionate about what they do,” he said.

SDSU real estate professor Mark Goldman sold Cutco knives back in the early 1970s as a college student. “It was a tremendous experience,” he said. “I learned fundamental sales and presentation skills that have helped me in everything I have done.” Goldman still uses a set of Cutco knives he acquired while selling over three decades ago.

At a regular Monday evening “key staff” meeting at Vector’s Temecula office, district manager Evan Keller reviews sales for the week and helps the six salespeople attending set goals for the next week. Keller has been with the company for 6 years, joining Vector while he was a student at Marquette University, where he double-majored in finance and marketing.

“My job is to motivate them,” he explained, while his sales team watched a video on tactics to set up a demonstration. Keller is 23 years old and sprinkles “awesome” into many of his conversations and presentations. A few years back, he visited the factory where the Cutco knives are made, a place Gillette and his fellow salespeople regard as the Vatican of knife making. Visiting the factory, Keller said, was “awesome.”

April 7, 2005

YOUNGEST STATE SENATOR LEARNS HOW TO GET THE VOTES THROUGH VECTOR TRAINING

When State Senator Nick Hacker hit the campaign trail last year, he was reminded of his days as a Vector sales representative.

"My philosophy has always been that you don't learn to sell knives," said the former rep. "You learn how to sell your self."

That sums up the lessons he learned selling Cutco knives as a student at the University of North Dakota in Grand Forks. Today, at 23, Hacker is the youngest state senator in the history of North Dakota, and may very well be the youngest in the history of the United States.

"The key to campaigning is to gain rapport with people you've never met before," Hacker said. "It's all about how fast you can gain respect. And how you can get someone to like you in a few minutes."

Hacker was able to master this skill as a Vector sales rep during the summer after his freshman year.

"Like most students, I received a letter and went in for the interview," he recalled. "At the time I was working as a bartender and needed a second job. I was a little hesitant because I had never sold anything."

The rest is history.

really liked the process. Once you sell yourself, the knives sell themselves."

During that first summer, Hacker earned more than $13,000 in commissions, and much of his success was based on his ability to build customer confidence during the initial moments of the in-home demonstrations.

But he learned much more through the "Skills For Life" program. Budgeting his time and setting goals were other key elements that ultimately helped him get elected. These skills are still appropriate because in addition to being a state senator, Hacker has a full-time job and is finishing up his senior year at the university.

His full-time position with the university's Center for Innovation is also directly related to his Vector experience. As a business and entrepreneur consultant, he develops business and marketing plans for innovative high-tech businesses.

Hacker said that his experience as a Vector rep and assistant manager has been invaluable when working with start-up businesses. All of these skills caught the attention of the Republican Party in North Dakota's District 42 in Grand Forks where more than half of the constituents are under the age of 25.

"Nick was the perfect candidate for that district," said Bruce Goodman, president and CEO of Vector West. "As an assistant manager, Nick recruited and trained many college students. He understands their needs and his ability to relate to peers was critical during his campaign and election."

At 23, Hacker has a bright future and many opportunities.

"My experience with Vector was invaluable," he said. "You can't put a price tag on it. As I see it, three types of people work for Vector: those looking to earn money while in college; those who choose a full-time career with Vector; and those who leave and perhaps return."

Where does Hacker fit in?

"Let's put it this way. I never close a door," he mused. "My demonstration kit is still in my closet."