Cutco Business Model

[Trent54]

Gentlemen,

I am ashamed to admit, I was a sucker. I am a former Cutco salesman. Well, not really. Like most people that become Cutco "salesmen," I gave up after a few humiliating attempts to sell their knives.

I have a big gripe with Cutco, and that is that they use a pyramid type marketing scheme to sell their knives, and although I can't prove this, I would guess that they sell a helluva lot more "demo kits" to young dumb kids than to actual end users.

Here's my experience:

You see the signs everywhere that read "Summer Employment, $14.00 an hour." At age 19, in 1996, this seemed like something worth checking out. About 15 people, all around my age showed up. A guy named Brett Semenski gave us a talk about how wonderful Cutco and their products were, and how much money we could make if we signed up to be "salesmen."

However, the $14.00 an hour figure was just an "average," I guess meaning a number some one had pulled out of their #4%. Our actual pay would be $40.00 an appointment, and we could collect that as soon as we could send in a form stating the names of the first ten of our appointments. We'd also make a small commission on anything we sold. The second big however was that we had to buy our own "demo kit' from Cutco. Of course this was explained to be a "steal," only $140.00 for a fake leather bag of knives, and a strand of 1" hemp to demonstrate the sharpness of these fine cutting instruments. The plan we were encouraged to follow was to write down a list of all our family members and friends of family, sign them up for appointments and start raking in the money.

What they don't tell you is that people are busy and don't normally want to take an hour to learn the benefits of something they know they don't need or want. They also don't tell you how embarassing it is to try to explain to a guy why a kitchen knife should cost $35 to $100 when you can buy a whole set at Wal Mart for well under the cost of one Cutco.

You eventually realize that the only way to be "successful" at this enterprise (racket) is to get good at subtly convincing people, working class people in my case, that they just aren't respectable/don't have class/haven't "arrived" unless they own a "quality" set of kitchen knives.
It is necessary to make a "good set of knives," something most people haven't ever thought about buying, seem like an absolute neccessity. And you know it's not. So you quit after two or three appointments, and try to return your "demo kit" and get your hard earned $140.00 back. Fat chance.

In the years since then, and coming to college I've had opportunity to meet a lot of people that have had the same experience with Cutco, and so far I haven't met anyone that actually became a "successful" Cutco salesman.

I guess it just makes sense. If they were making a quality knife at a reasonable price, i.e., if their business was on the up and up, they would sell their knives in stores and not use such a convoluted marketing scheme.

Now when I see the signs, I rip em' down.

Trent

 

[Crayola]

Once upon a time I almost became a Cuto rep! I say almost, because after the first day of training I decided the sick feeling in my stomach was telling me that I couldn't do it. So I quit! WHEW!

In all fairness, the knives don't look that bad, the handles are ncie and lots of folks, even here, like their double-D edges. What leaves me NOT wanting Cutco, however, is the sleesy marketing that they do. Much liek you don't want to deal with a custom maker who is an A$$hole, you don't want to deal with A$$hole companies either. Now I'm making my own kitchen knives! And I liek them much better. At least I know what steel they are amde of and how hard the steel is.

 

[TorzJohnson]

The smell of Amway / Pixtar is all over Cutco. I wouldn't touch anything tainted by them with a 10 foot pole.:barf:

 

[Josh Feltman]

Yeah, I went to one of the orientation meetings once after responding to an add about selling knives and outdoor products. I figured it was an actual store or something. I could tell five minutes into the presentation what the whole thing was about. What a joke I made it through the presentation, the first "interview",and then, during the second "interview", which was convenienty scheduled about fifteen minutes after the presentation, both the Cutco honcho and I decided that I wasn't really cut out for Cutco. Whew!
--Josh

 

[92degrees]

My college roomate sold for Cutco. It seemed like a "friends and family" thing to me...rely on the pity of your parents' friends to buy a couple of knives. My roomates' demo set was pretty much ruined when a third roomate overindulged and used them for some heavy carpentry work on our back deck. Those were the days.

Me, I worked for CollegePro housepainting. Same racket with a different product.

 

[Gollnick]

I sometimes stop for lunch at a sub shop that's part of a west-coast chain. I've noticed that they use all Cutco knives. Now, granted, cutting sub sandwiches isn't exactly the most demanding duty, But, on the other hand, these knives get used all day everyday and run through commercial dishwashers. So, they must be, if nothing else, pretty durable.

My guess is that Cutco does some substantial commercial business and that that is where the real money is at.

 

[R.W.Clark]

I am probably one of the biggest Cutco foes out there. I hate the company. It is dishonest and illegal. They require their salesmen to purchase a product that is only available through Cutco. That is a violation of Californias Anti Sweat shop laws. They sucker very well meaning teens and young adults (students mostly) into becoming reps. This is after one of the worst brainwashing sessions you will ever see.

They get these kids to buy the demo set. Then they send them out to hit up their freinds and family. That will normally get one or two more sales. And that will be all the sales 99% of them will be able to make. But what does Cutco care. They have made thier profit off of their employees. They do not have to pay you a set wage. They do not pay any benefits. All they have to do is set up these bogus interviews.

As far as the quality of the knives are concerned, I would prefer Ginsu! If you want to tear and rip through meat save some money and buy a hacksaw. These knives make Valor and Frost appear to be top end.

As for their Lifetime Warrantee, big fat hairy deal! Any quality kitchen knife company offers the same thing, but better. Cutco has to be sent back to the company by the customer. Other companies do not need this. Following is a true story.

I managed a retail cutlery store while in college. We had a lady bring in a beat and battered Henkels chefs knife. The lady said that it had been passed down to her from her grandmother who had bought it in the 30s or 40s. It was totally worn out. She was disappointed to hear that we would be unable to sharpen it for her. I mean this chefs knife blade looked like a paring blade it was so worn. We asked her if she had any attachment to the knife. She said that she did not. So I took the knife and handed her a brand new Four Star. She was surprised that this was free. I told her that it was part of the Henkels warrantee. After she left I stuck the blade in a shop vise we had in the back and snapped off the blade. Now the warrantee would replace the knife!

I have yet to find a Cutco rep that is willing to take me up on a long standing challenge. He/she can bring their best hunting knife to my shop. We will put it up against one of my basic hunters in a test to destruction. First knife to break in rope cutting and heavy chopping loses. If I lose I will buy what is left of the Cutco knife. If they lose they have to buy what is left of my hunter. None has been willing to put their money where their mouth is! That says it all in my book!

 

[wolfmann601]

My son's college room mate sold CUTCO one summer and as a "favor" we agreed to sit through the demonstration. He was informed going in to the Demonstration that I was a knifeknut.

The kid did a wonderful job with his sales pitch because the kid is a wonderful and intelligent young man. He had me get a few of my knives and we had a little cutting contest. The first thing he showed us was a $45.00 pair of scissors that easily cut a penny in half. I matched that with a $4.00 pair of EMT shears. Then we went cut for cut until he got to the soda cans, the wood and plastic. I refused to use my knives for that purpose. The Cutco knives looked as if they cut well enough, and in light of the fact that this was kind of a "family thing", my wife and I decide to buy a complete set.

When he said :"They retail for $2,000, but if you buy this set that I used this morning, I can set it for $1,400", I was flabbergasted. I thought it was a joke, maybe $200 bucks, but $2,000?

YUP, and then we talked in "earnest". The young man was forced to buy that set and if he sold it for full sticker, he would have earned 50%. Even at $1,000, the price of CUTCO is absolute proof that someone within their convoluted pryamid was getting very, VERY rich.

The young man had no idea what type of steel was used because CUTCO did not tell him, and although he was to earn $45.00 for the house call, that was contingent on my wife and I providing him with the name and phone numbers of ten friends or family. Only because he was my Son's friend did we give him the names. That's how it works, ply on the friends and family to sell knives at fives times what they are really worth.

It turned out that the "luxury set" the young man was using to demonstrate was one of two sets of knives he needed to buy from CUTCO to put on his show. By the end of the Summer he sold two sets of knives, bombarded every family and friend of the family and ended up selling his $2,000 set of CUTCO knives to his Mother.

What a racket.....................Ira