So you've probably seen the CUTCO "opportunity" to make $15 an hour and now you're wondering... is CUTCO a pyramid scheme? Or can you really make money selling knives?
First of all, I want to congratulate you on taking some time to research the company.
So many people fall for scams because they don't spend a few minutes Googling it! And finding legit ways to make money can sometimes be harder than it seems.
This honest CUTCO review, with videos, will expose the truth about the company. I'll lay out the pros and cons so that you can make an informed decision if it is for you or not.
The overview and rankings
Founder: Alcoa company in 1949 (now owned by Vector)
Type: Cutlery direct sales company
Products (Including Pricing): 60 out of 100
Success Stories: 30 out of 100
Price To Join: Free- it used to cost $300+ (100 out of 100)
What To Look For In A MLM:
Summary: CUTCO is a direct sales company that sells knives and a range of kitchen cookware products. The quality of the products are very good and members get some decent sales training.
It's free to join and is mainly targetted at students. You do not earn $15 an hour but you get paid at least $15 for every "presentation you make". To arrange a presentation you will need to call family and friends and then try to sell them some knives.
Members receive 10-50% commission of any sales if it comes to more than $15.
"CUTCO at home" started in 2015 and is the "newest member of CUTCO's family". This acts more like a traditional MLM where you can also get paid bonuses from the sales of people you recruit into the company. This is mainly targeting stay at home Moms.
Make Time Online Rating: 60 out of 100
What is CUTCO?
CUTCO is a kitchen knives and products Direct Selling company that was founded in 1949. The company aims to attract students looking for money to sell the knives to their friends and family to earn a 10% commission.
Here, you need to consider who you're trying to reach seriously. Most individuals want to spend their money on something other than fancy knives, cutting boards, and other kitchen gadgets.
In the kitchen, all needs are reliable implements, and not all must cost a lot. Right about now is where everything could go south for you. Those who value high-end kitchen equipment will make your ideal customer base.
This could be a method to get some additional money if you are good at sales or think you can be. Although you'll gain valuable experience, you'll also have to make cold calls, including to friends and family, which may strain your relationships.
It's hard to believe, but this MLM is the only one some have found that pays an hourly rate of $9.50–$19.00. But if you don't close any deals during your presentations, you'll only get paid by the hour.
However, their marketing often claims people earn $10-$15 an hour and misleads them into thinking it will be a "cold calling job". This is why the company has faced a number of lawsuits.
Cutco is what is known as a single-tier direct sales organization. They are not a multi-level marketing or pyramid scheme, contrary to what some have claimed. You cannot develop a downline and receive commissions from them as a Cutco Sales Representative.
Initially, there were hundreds of these little local direct sellers working for Cutco.
Vector Marketing was one of these sellers, and from 1981 to 1984, Vector Marketing sold much more than all other independent sellers combined.
Consequently, Cutco acquired Vector Marketing in 1985, making them their top seller, and in a standardized approach, they replicated Vector's performance across the continent.
Today... if you see an advertisement or receive a phone call offering you a job selling Cutco Cutlery... It originates from Vector Marketing (not Cutco).
Over the years, Vector has also experienced its fair share of controversy. In 1996, the Washington Post surveyed 940 Vector recruits in conjunction with several lawsuits and the state of Wisconsin's mandate that Vector stops presenting students with false material.
Nearly half of those who worked for Vector Marketing (again, not Cutco) reported earning no money or losing money.
The Washington Post stated in 1996 that nearly half of the 940 Vector recruits surveyed earned nothing, and some even lost money.
All of their products are made in USA and are very high quality promising "lifetime guarantees".
"Vector Marketing" is the sole distributor of CUTCO and a variation called "CUTCO at home" was established in 2015. This acts more like a traditional Multi-Level-Marketing (MLM) model and is more aimed at "stay at home Moms" who can make money selling the knives to friends and then try to recruit them into the MLM model to earn extra bonuses.
The 6 minute video below explains more about the opportunity...
But you are smart enough to know this is just a sales video, so you are probably still wondering...
Is CUTCO a pyramid scheme?
No CUTCO is not a pyramid scheme.
The traditional business model is a "direct sales" model where students can only make commission from anything they can sell. There is no way to make money or bonuses from recruiting others into the business.
However, is the "CUTCO at home" model more like a "pyramid scheme in disguise"?
What is a pyramid scheme?
These are illegal in most countries because it's impossible for everyone to make money as you can see in the Wikipedia diagram below...
Most MLMs, do offer legit products or services.
And the CUTCO model you have probably seen if you are a student is impossible to earn any money from recruiting people into the company.
However, the newer "CUTCO at home" offers bonuses for any sales that people you can recruit make. This often means that the good money is only made when representatives recruit more people into their "downline". This is similar to a "pyramid scheme in disguise".
The 5 minute video below explains how to spot these pyramid schemes...
Success is rare with CUTCO
In fact, success if rare in most direct sales companies.
The only way you can make money as a CUTCO representative is by selling their products and earning 10-50% commission.
So if you sell one of their knives that costs around $100 you would make $10. That means you would have to call numerous people, arrange a time to meet them, deliver the "done for you" presentation and hope they buy something... for $10!
Sure the per cent increase goes up with the more you sell (over $10,000 sales earns you 30% commission).
But let's say you manage to sell the most expensive knife set at $3,000. That will be a $300-$1,500 commission depending on how much you've already sold. But...
How many of these presentations can you realistically expect to perform in a month?
How many people do you know that you think may be willing to spend $3,000 on some knives?
Ready to make passive income online?
Hey, I'm Mike.
I created a passive income online within a year. I had no marketing skills or online experience when I started.
How does CUTCO Work?
CUTCO makes high quality knives and kitchen products.
They then save money on advertising and marketing by getting people (typically students) to sell the knives for them. In return, these "cash poor, time rich" students can earn 10% commission.
But they don't make it clear what you are actually required to do as a representative. So here's the overview of how it works:
- CUTCO advertise a "job for students" that makes $15 per appointment
- Students go through a long interview process with multiple "stages"
- Eventually they send you on a 3 day training course (around 7 hours each day)
- Ask you to write a list of all the people you know
- Get you to call everyone you can think of or find a number for
- Provide a sales script for what to say to these people
- Try to book a "presentation" aka sales pitch
- Use a "done for you" presentation to try to sell the knives
- Get 10-50% commission on any sales (or $15, whichever is more)
Although the operational aspect of Cutco and its marketing division are not a scam (meaning, they create, sell, and deliver a quality product, as well as pay their employees, vendors, and taxes), their sales and recruiting techniques have been called into doubt.
When a "receptionist" from Vector Marketing phones to recruit you as a sales representative for Cutco, they do so in a manner geared to gain your confidence and sell you an opportunity in a mannwayt some may consider fraudulent.
Vectoruses marketers (also known as recruiters) to schedule interviews. The official term for this position is "receptionist," and there are various levels (receptionist, VIP receptionist, Elite receptionist)
The receptionist employs a carefully constructed script to win your trust. (It should be mentioned that most sales professions, from real estate to automobile sales to retail and fast food, use handsets while selling.) ("Do you want fries with that?")
The 3X means they have to call you three times a day: in the morning, in the afternoon, and before they leave.
They are also told to call you twice in a row. If you answer the second time, a recruiter (receptionist) will read from a script...
"Hey, thanks for getting back to me! I know it's a little strange that I called you twice a row... We've been so busy, and I wanted to ensure I got in touch with you immediately because you (for example) filled out an application online. If I hadn't made sure I got in touch with you right away, I never would have."
After connecting with you by phone, they will attempt to establish a friendly relationship with you.
And this 1-minute video below pretty much explains exactly how CUTCO products work...
If you are think it may be an opportunity for you then it's vital that you understand more about what products CUTCO offers.
Here are the main categories on offer:
- Knives - $40-$250 for a knife i.e. cleaver, trimmer, table knife, french knife etc.
- Shears - around $120 for scissors
- Cooks' tools - $40-$300 gadgets, baking tools, utensils, cutting boards etc.
- Tableware - $30-$1,500 for cutlery
- Cookware - $80-$2,600 for pots and pans
- Outdoor - $100-$250 for hunting knives, pocket knives, sporting knives, garden tools
A good set of sharp knives is a great kitchen hack to save you time.
CUTCO knife set- flagship product
CUTCO's knives are certainly their main stand out products.
A pretty standard set of 3 knives costs around $300 and is the main product pack that reps will be encouraged to sell...
They are no ordinary knives though... they are all made in the USA and their handles are made of thermo-resin for:
- Greater strength
- Dishwasher endurance
- Long-term durability
The biggest selling point is possibly the "Lifetime guarantee". There are dozens of stories online of people who have had these knives for 60+ years!
Just check out the 1 minute video to learn more about them...
Can you make money with CUTCO?
Some people do make money from CUTCO.
It's not easy and the people that do the best are the ones that have good charisma and sales skills.
After all, you will basically be required to call friends and family and then book a face to face "presentation" with them.
Basically, the only way you can make money is by selling!
How to make money with CUTCO
Now, let’s talk about the opposite: you're familiar with the company. Your role as a company representative would be to show off the products to close friends and family in the hopes of making a sale, and you would get a commission off those purchases.
You need to make sales to get compensated in direct marketing. Cutco product presentations are paid at an hourly rate. However, that's only because of the time spent presenting. Depending on where you live, the going rate for an hour of work is somewhere around $15.
This means that if it takes 30 minutes to get to the presentation, an hour for the presentation, and another 30 minutes to go home, you will be paid for 1.5 hours. That's assuming the production doesn't result in any sales.
There will be no out-of-pocket costs associated with your training, but you will also receive no compensation for the time spent in class. A set of knives was once required for demonstrations, and that is not the case.
Consider the costs both obvious and not so apparent, of running a business. You are also responsible for covering the cost of your gas to and presentations.
How much does it cost to join CUTCO?
It is completely free to join.
It used to cost around $300 to buy the "Knife kit" so you could use that for presentations. But now you get this for free as long as you are an "active representative"...
To remain active you basically need to sell $100 of knives or products every month.
If you are not active by the end of the month you have 2 choices:
- Give the knife kit back
- Buy the kit for $75 (better than half price)
"CUTCO at home" compensation plan
The basic CUTCO compensation plan is pretty easy to understand:
- Make 10-50% commission of sales or $15 for a presentation (whichever is higher)
Here's the commission structure based on how much you've sold before:
- $0-1,000 in career sales = 10% commission
- $1,001-3,000 in career sales = 15% commission
- $3,001-6,000 in career sales = 20% commission
- $6,001-10,000 in career sales = 25% commission
- $10,001-20,000 in career sales = 30% commission
- $20,001-30,000 in career sales = 30% commission + 5% bonus
- $30,001-50,000 in career sales = 30% commission + 10% bonus
- $50,001-150,000 in career sales = 30% commission + 15% bonus
- $150,001+ in career sales = 30% commission + 20% bonus
A presentation lasts for around an hour. This is why the confusion over getting paid $15 an hour exists (but it doesn't include the time calling people to set up these presentations or travel time, training, practicing etc.)
But do not get this confused with the...
Cutco at home compensation plan
In 2015, the "Cutco at home" MLM program started where you can earn money in 2 ways:
- Commission of sales (20-30%)
- Bonus of your downline sales (1-10% as long as they sell $1,000+ month)
You can learn more about an in-depth understanding of their inner workings in the 30-minute video below...
Is CUTCO a scam?
CUTCO is not a scam.
They sell legit products and pay their representatives exactly like they say they will.
The lawsuits and confusion has come from their misrepresentation of the company, mainly claiming that people will make $15 an hour and that it often looks like it will be a "cold calling job".
This is not the case.
You will be required to sell knives to your friends and family and this can come as a shock to people, hence filing a lawsuit against them!
The rest of this CUTCO review will lay out the pros and cons so that you can make an informed decision if it's for you or not.
Common positive reviews
Here are some of the positive reviews we had from Trust Pilot about the job opportunity...
- "Orders are processed fast and accurately. They have this lifetime warranty that works."
Common negative reviews
And here are the common negative reviews...
- "Complete sham marketing. Overpriced knives."
"I was a part of this industry for too long and I will never purchase Cutco knives or recommend them to anyone ever again."
Just to be fully transparent with you, I am not a distributor myself and I do not endorse CUTCO in any way.
I have researched the website, testimonials and information on the Internet to get to the bottom of what this program genuinely does. This is because I have been burnt from programs just like this in the past and I want to prevent others from making the same mistakes.
What I like about CUTCO
There are some good things that I genuinely like about the company...
- Pyramid Scheme – recruits members via a promise for payment from referring others to the service rather than providing a product
- Affiliate Marketing- Connecting a customer to a product they are looking for and receiving a commission for doing so
- Red Flag - A warning sign
#1 Proven company
PR Web shows that Vector was named in the top 20 Direct Selling Associations in 2016...
It's been around since 1949 so it has a long proven track record.
This is another great sign that CUTCO is not a scam.
#2 Positive product reviews
You can honestly find so many of these types of reviews online...
I've read a lot of complaints about the company but I haven't found one person that has complained about the quality of the knives!
It's a great sign that CUTCO is not a scam if everyday people use their products all the time.
#3 Develop sales and leadership skills
If you have any entrepreneurial spirit or want to create your own business and live a life on your own terms, then these are 2 vital skills.
Just look at an example presentation below...
Sure, it may be a bit awkward and push you out of your comfort zone. But these sales skills are transferable to everything you end up doing in the future.
There are also "leadership" positions inside the company to manage or train other new members for certain reps.
If I could go back in time, I would focus on working to learn skills such as sales and leadership, rather than just trading my time for money.
#4 Guaranteed commissions
This is pretty much NEVER heard of in any direct sales or MLM business models...
You get paid for EVERY "presentation/ appointment" you make.
If you book a face to face meeting with someone, you are guaranteed to get paid $15. If you sell more than $150 then you will earn more.
If you're a student looking for some extra income, then that's not too bad! CUTCO is certainly not a pyramid scheme when you don't make money by recruiting people either.
Direct sales is normally ONLY commission based.
What I don't like about CUTCO
There are some hidden truths that are important to be aware of if you have any interest in joining CUTCO...
#1 Expensive products
You will need to know some people that have money...
Some knife sets are over $3,000!
If you are planning on selling these knives to your student friends then you may need to think again!... I'm thinking you may need to call some of your parents "business friends"!
#2 Outdated sales techniques
Holding a face to face meeting with one person at a time to sell some knives is considered weird in 2022!
Many students have never called a random person and are not willing to pick up a phone to a number that they don't know.
These are the types of sales methods you will be taught inside CUTCO.
More and more people buy things online in the 2020's and these old techniques are quickly becoming extinct.
#3 Low commissions
You can see what previous members think about the company on websites like Indeed...
10% commission is not a lot, when you are selling face to face!
You have to sell more than $150 worth of products to make it worth selling anything and that is quite a lot of money to spend on some knives!
The person in this review clearly didn't understand that you either earn 10% commission OR the $15, whichever is more.
If you sell $300 you ONLY get $30 commission. You DO NOT get the $15 as well! Can you see what I mean about the confusion and misleading marketing!?
#4 Peaks and troughs
Google Trends shows that every June- July and December there is a spike in searches for CUTCO.
I guess this is because of the nature of the people the company targets... aka students!
These are the biggest holidays for students and so the company appears to focus on recruiting and selling during these 2 times each year.
It just means that it's not likely to be a consistent income stream all year. It really only works when you put the effort in as a rep, which leads onto...
#5 You're still trading time for money
in the 2020's there are far better ways to make money.
It's just that schools still do not teach these methods of making money.
Using the power of the internet to sell for you 24/7 whether you are asleep or on holiday just makes sense. So many businesses are using this as leverage these days, but it's amazing at how few people are even aware of how to do it still.
Rather than spending time on learning sales and leadership skills, the most profitable skills in the future will be online marketing. And anyone can learn these skills.
Ready to make passive income online?
I've created a growing passive income online with no previous marketing skills or online experience...
I've made a special video for you to explain exactly how I did this.
My opinion - CUTCO
CUTCO clearly has some great products. Their lifetime guarantee shows how much they believe in them and there are tons of positive reviews about their knives online.
However, what do I think about their direct sales or MLM business model?...
The best thing about it will be the skills that you learn (sales and getting out of your comfort zone).
However, the outdated techniques and low commissions means it's super hard to make any decent money from CUTCO unless you are a natural sales person.
Finding a system that allows you to use the internet to sell 24/7 will be a much better skill in the long run...
How I make passive income online
MLMs are not scams or illegal. However, I'm not a fan of them because of the restrictions to the expensive products you have to promote.
Once I learnt about affiliate marketing, I realised it's a far superior business model because:
- You can promote anything you want and truly own the business
- You never need to sell to friends and family
- It's completely free to start
In 2018 I had no idea what affiliate marketing was.
But I went from a full time PE teacher to making a passive income online within one year...
If you want to discover how I did it then check out this special video I created which explains exactly how. You can also get your free 7-day bootcamp to get started.