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Vector Marketing is the sales arm of Cutco Corporation, a cutlery company that targets and recruits college students to help sell its product. College students are recruited heavily during the summer months, and hired on as independent contractors rather than salaried employees.

The company, however, is ridden with controversy.

Vector Marketing has been sued several times, for failing to adhere to labor laws, for failing to pay adequate wages, for providing dishonest information to recruits, for misrepresenting its compensation system, and more. The company has been called a “pyramid scheme” and its ads have been accused of falsely affiliating itself with universities.

Lessons in Ethics

Don’t be evil or it may catch up to you. When you type “Vector Marketing” into Google, one of the first suggestions that comes up as you type is “Vector Marketing scam.” And the first YouTube result at the time of this writing is titled, “Vector Marketing Is A Scam.”

While we’re not here to debate the legitimacy or accuracy of the lawsuits and accusations leveled towards the company, the fact is that if you do engage in shady business practices, negative publicity can catch up quickly. 

Don’t misrepresent your company, your products, your services, or anything else associated with your business. Misrepresenting any part of your business practice can come back to bite you. While the internet marketing industry has historically been rife with scams and unsavory practices, the evolution of search technology and IT in general is helping to weed much of those practices out. Anyone interested in building a legitimate, long-term business will have to focus on creating and maintaining a solid reputation.

Don’t take advantage of the vulnerable. According to the above-cited article, Vector Marketing required new hires to put down a $135 security deposit for a demonstration kit. Professionals and adults who have real-world work experience would be more likely to balk at such a requirement.

While the above-cited article says that some students suspect a scam and leave the interview, others stay. This practice has contributed to Vector Marketing’s label as a “pyramid scheme.”

We don’t want to sound like we’re bashing Vector Marketing,. Despite the company’s scandal-ridden past, there are some employees who feel that the company’s bad reputation is exaggerated.

Where to Draw the Line

While some claim that marketing is inherently evil, this blanket statement is rather extreme and impractical.

All creators, whether they be coders or artists, need to make money from their products and services. And the only way to get the word out is through marketing. Even in competitive markets, however, there is no reason to resort to unethical practices in order to promote your product or service.

Here are a few areas to pay attention to when engaged in marketing:

Data collection and analyticsWhile marketing requires demographic data and other data to be effective, one chief concern these days is the invasion of privacy. The more data you collect, the more effective you can be with your advertising, but don’t go too far or you can lose market share and damage your reputation.

Exploitation of vulnerable audiences – College students aren’t the only vulnerable audiences around. Vulnerable audiences can be those who are emotionally or mentally unstable, or people who are economically vulnerable. Poor people, the elderly and the young, for instance, can be vulnerable to scams or other offers that are “too good to be true.”

Truth vs. puffery vs. fraud – “Puffery” is actually a legal term that refers to hyperbole or exaggeration, which is legal in marketing. If, however, a marketing campaign uses untruths in its promotions, it can quickly descend into false advertising. Deceptive advertising is not only unethical, it can also have the opposite of the intended result: native advertising and sponsored content, for instance, has been cited as being “untrustworthy” by most readers and viewers.

Spam – Telemarketing, email spam, pop-ups, automated blog comments, Twitter bots, automated blog comments, and similar marketing tactics are considered unethical because they are unsolicited.

Negativity – Attacking competitors is not only unethical, it is also illegal in many parts of the world. If your product can’t compete by virtue of its own benefits and features, do you think that attacking a competitor will make you look any better?

Marketing has a direct impact on a company’s bottom line. But shortcuts will usually short-circuit that profit margin and cause more harm than good, as we can see from Vector Marketing’s hiring and marketing practices. While you may be able to generate quick profits, these can quickly evaporate in the face of a damaged reputation or – even worse – lawsuits.

Easy money is always tempting, but magic bullets and pyramid schemes will only come back to haunt you in the end. When you’re looking for ways to make more money online, find companies that have stellar reputations, solid track records, and upstanding business practices.