(2022) Is Cutco a Pyramid Scheme?

Cutco Review

If you’ve ever tried to find a side hustle, odds are you’ve heard of Cutco– you may even have interviewed with them. But just because a company has been around for a long time doesn’t mean they have your best interests at heart.

For years, rumors have swirled about this company and their business model. You’re probably wondering, “Is Cutco a pyramid scheme?” and a million other questions about this knife-seller.

Today, I’m doing a deep dive into Cutco. We’ll talk about their history, their knives, what it’s like to be a rep, and my personal opinion of their business. By the end, you’ll have a very clear understanding of Cutco… and whether or not they make the cut.

Who Owns Cutco?

Cutco is a multi-level marketing company that sells kitchen knives, shears, and other cutlery. The company was founded in 1949 by Alcoa, an aluminum company– which should give you an idea of the quality of their knives (hint: they’re not great).

In 1966, Vector Marketing Corporation took over Cutco. Vector is the direct sales arm of Alcas Corporation, which still owns Cutco today. If that sounds confusing, don’t worry– I’ll explain everything in more detail later on.

For now, just know that Cutco is owned by a larger corporation, which isn’t uncommon for MLMs. What is uncommon is the amount of lawsuits this company has faced over the years… which we’ll talk about later.

About Cutco Knives

Cutco knives are made of a high-carbon stainless steel that supposedly never needs sharpening. The company also claims their knives are heat-treated and frozen for extra strength (more on that later).

Each knife is handmade in the United States– although some of the parts are outsourced, which I’ll get into shortly.

Are Cutco Knives Made In China?

No, Cutco knives are not made in China. According to the Cutco website, all of their products are made in their factory located in Olean, New York. However, I found quite a few rumors and claims that materials for their handles and accessories are shipped in from overseas.

Like many things with Cutco, they try very hard to sell you only on the story they want you to hear. This is just my personal opinion, but I’m extremely doubtful that every single Cutco product component is produced and manufactured here in the USA.

Heat Treatment

Cutco knives are heat treated in a process that strengthens the steel and makes the knives less likely to chip or break. The company claims their blades go through a 17-step process that starts with heating the metal to over 1,700 degrees Fahrenheit.

The metal is then cooled rapidly in order to make it harder and more durable. This is a common process used in knife making, so I have no reason to doubt Cutco’s claims.

Deep Frozen

After the heat treatment process, the knives are frozen at -320 degrees Fahrenheit. This supposedly makes the knives even stronger and less likely to break.

Oven Tempered

Finally, the knives are tempered in an oven set to 350 degrees Fahrenheit. This supposedly makes the knives more flexible and less likely to chip.

I have no reason to doubt any of these claims, as they’re common knife-making processes. That being said, I have yet to find any scientific evidence that supports Cutco’s claims of making unbreakable knives.

How Does Cutco Work?

Now that we know a little bit about Cutco’s knives, let’s talk about how the company works.

Cutco is a direct sales company, which means they rely on independent contractors (called “reps”) to sell their products. These reps are not employees of Cutco, but rather independent contractors who work on commission.

Cutco reps typically sell their knives through in-home demonstrations. The customer invites the rep into their home for a “party” where the rep will show off the knives and give a demonstration.

The idea is that the customer will be so impressed by the quality of the knives (and maybe even a little bit pressured by the high-pressure sales tactics) that they’ll make a purchase on the spot.

In my opinion, this is a terrible business model for two reasons:

1) It’s extremely inconvenient for the customer. Who wants to have a stranger in their home, especially when they’re not expecting it?

2) It’s nearly impossible to make a sale when the customer can’t try out the product first.

Fortunately, Cutco has started to move away from this in-home demonstration model in recent years. The company now offers several different ways for customers to buy their knives, including:

– Online: Customers can now purchase Cutco knives online through the company’s website. This is a much more convenient option for customers, and it also allows them to compare prices and read reviews before making a purchase.

– Catalog: Cutco also offers a catalog, which is basically a glorified price list. Customers can browse the catalog and then place an order over the phone or through the mail.

– Retail stores: Cutco knives are also available at a handful of retail stores, including Bed Bath & Beyond and Ace Hardware. This is by far the most convenient option for customers, as they can try out the knives before they buy them.

Cutco Compensation Plan

Now let’s talk about how much money you can make as a Cutco rep.

The company claims their reps make an average of $20 per hour, but I’m skeptical of this claim. In my experience, most direct sales companies inflate their earnings claims in order to recruit more reps.

The Cutco compensation plan is pretty standard for a direct sales company. Reps earn a commission on every sale they make, and they also have the opportunity to earn bonuses and commissions on the sales of other reps they’ve recruited. There is also a team override component, which allows reps to earn a percentage of the sales generated by their team members.

The company also offers a few different ways for reps to earn additional income, including:

– Selling knives at events: Reps can set up tables at community events and sell knives to attendees.

– Holding in-home parties: As I mentioned earlier, Cutco reps can hold in-home parties where they give demonstrations and try to sell knives to guests.

– Recruiting new reps: Reps can earn a commission on every new rep they recruit, as well as a percentage of the sales made by that rep.

Overall, the Cutco compensation plan is pretty standard for a direct sales company. There’s nothing particularly unique or exciting about it.

How Much Can You Make With Cutco?

Now let's talk about how much money you can actually make with Cutco.

As I mentioned earlier, the company claims their reps make an average of $20 per hour. In my experience, most direct sales companies inflate their earnings claims in order to recruit more reps.

The truth is, most people who join direct sales companies like Cutco don't make very much money. In fact, the average rep only makes about $250 per year.

There are a few reasons for this:

- Most people who join direct sales companies do so primarily for the discount, not to make money.

- Most people who join direct sales companies have no sales experience and very little experience with the products they're selling.

- Direct sales is a very competitive industry, and it's very hard to make a sale when there are so many other reps selling the same thing.

The bottom line is that you're not going to get rich by selling Cutco knives. If you're looking for a way to make some extra income, then Cutco might be a good option for you. But if you're looking for a full-time income, then you'll need to look elsewhere.

Success Rate With Cutco

Many Cutco reps report making around $200 per week, with top earners making over $1,000 per week. The success rate with Cutco is low-to-fair, with most reps able to generate at least some income from the opportunity.

Is Cutco A Pyramid Scheme?

No, Cutco is not a pyramid scheme. A pyramid scheme is a illegal business model in which participants make money primarily by recruiting new members, not by selling products.

Cutco is a legitimate direct sales company, and reps make money primarily by selling knives, not by recruiting new members. The company also offers a few different ways for reps to earn additional income, as I mentioned earlier.

Is Cutco A Scam?

No, Cutco is not a scam. It’s a legitimate direct sales company that offers a variety of high-quality kitchen knives.

However, I do have some concerns about the company. First of all, their products are very expensive. In my opinion, you can get just as good of quality from other brands like Wusthof or Victorinox.

Second, the company has a lot of negative reviews online, many of which accuse the company of being a pyramid scheme. I’m not sure if these claims are true, but they’re definitely something to be aware of.

Third, the company has faced a lot of lawsuits over the years. In 2009, the company was sued for allegedly misrepresenting their earnings potential. And in 2012, the company was sued for allegedly using deceptive marketing practices.

Overall, I think Cutco is a legitimate direct sales company that offers high-quality products. However, I do have some concerns about the company that you should be aware of before joining.

Things I Like About Cutco

Now let’s talk about some of the things I like about Cutco.

First of all, I like that the company offers a variety of high-quality kitchen knives. I also like that the company has a very low start-up cost, and that you can sell their products online as well as in person.

Next, other reviewers agree that Cutco has an amazing management team. Regardless of the fact that Cutco as a company doesn’t care whether or not its reps turn a profit, management team members are committed to helping you thrive, grow, and ultimately succeed.

I also appreciate that the company is very upfront about their earnings potential. Most direct sales companies inflate their earnings claims in order to recruit more reps. But Cutco is very honest about how much their reps make, which I respect.

Finally, it’s nice to see a “side hustle” company focusing on goals it can actually achieve for its reps. So many of these companies spend big money on marketing and selling the idea of the lifestyle… but when you join the program, you find out they’ve spent nothing on their actual infrastructure. You wind up being sold on a dream you can never hope to achieve– especially using the lackluster resources provided.

But Cutco simply says their reps can make “some extra income.” Because they aren’t spending a ton of money on fancy ads, they can afford to retain their excellent management team– enabling you to make some actual money. That is just so refreshing.

Things I Do Not Like About Cutco

Now let's talk about some of the things I do not like about Cutco.

First of all, I think their products are overpriced. In my opinion, you can get just as good of quality from other brands like Henckels or Wusthof. Especially when you consider that Cutco knives aren't 100% made in the USA, it doesn't make sense to price them so exorbitantly.

Second, I'm not a fan of the company's recurring order policy. I think it's unfair to force customers to order more knives every month, especially when they're already paying such high prices.

And finally, I'm concerned about all the lawsuits the company has faced over the years. In 2009, the company was sued for allegedly misrepresenting their earnings potential. And in 2012, the company was sued for allegedly using deceptive marketing practices.

Obviously, Cutco is still in business today even after facing lawsuits. Just keep it in mind if you choose to become a rep.

Cutco Review: Summary

In summary, Cutco is a legitimate direct sales company that offers a variety of high-quality kitchen knives. However, I do have some concerns about the company that you should be aware of before joining.

First of all, their products are very expensive. In my opinion, you can get just as good of quality from other brands like Wusthof or Victorinox. Because of this, you may have trouble selling to customers. In the days before the internet, it was much easier to sell a product for a higher price than competitors. But in these modern times, you may be price-checked on the spot and shown the door.

Second, the company has a lot of negative reviews online, many of which accuse the company of being a pyramid scheme. I’m not sure if these claims are true, but they’re definitely something to be aware of. My experience is that if you want to make real money, you need to sign up your friends and family members. Considering most anybody could pop out to Costco and buy the knives you’re selling for half the price, you just can’t make much money there. If you join as a rep, you’ll get definite pyramid scheme vibes.

And finally, the company has faced a lot of lawsuits over the years. While Cutco is still in operation today (meaning it’s not a blatant scam), many people have found themselves nowhere near the financial position they hoped to be upon joining.

Overall, I think Cutco is a legitimate direct sales company that offers high-quality products. However, I do have some concerns about the company that you should be aware of before joining.

I do not recommend joining as a rep if you want to make any kind of supplementary income. There are many other legitimate opportunities for you to do so. However, if you’re purely interested in getting a large quantity of knives with the rep’s discount pricing, this is a good way to do it.

I hope this review has been helpful. Thanks for reading!

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