Is Cutco a Pyramid Scheme? Legit MLM or Scam? Exposed!

Cutco is an MLM company that sells nutritional supplements and personal care products. It is not a pyramid scheme, and it is one of the legit MLM companies.

There is a good chance that you heard about Cutco through someone – a friend or family member.

Many people these days are looking for additional income, and you are most likely one of them. There was then an opportunity to work from home by joining Cutco as one of their independent distributors.

However, as I’ll discuss in this review, there are some reasons why success with Cutco is unlikely. Experienced salespeople and well-funded recruiters are the only ones I can think of to have real success with this MLM program.

As a disclaimer, I’m not affiliated with Cutco. It means I’m not paid to write this review. So you can rest assured that you will get an honest and unbiased review from me.

At the end of this review, I’ll also tell you the best alternative to the Cutco MLM program that has enabled me to make a full-time passive income online.

What is Cutco?

Cutco Corporation, formerly Alcas Corporation, is a U.S.-based company that sells knives, predominantly through direct sales. They own CUTCO Cutlery Corp., Vector Marketing, Ka-Bar Knives, and Schilling Forge. The Cutco brand is the company’s flagship product.

In 1949, Alcoa and Case Cutlery (hence “Al-cas”) teamed up to form a company that would produce stainless steel knives for Alcoa’s WearEver Cookware division. In 1972, Alcoa acquired Case’s stake in the business, and by 1982, Alcas had been spun off as its own private company thanks to a management buyout. The year was 1985 when the firm bought Vector Marketing Corporation.

Alcas rebranded themselves as Cutco in 2009, after their flagship product.

Cutco is now a direct sales company that sells kitchen knives through its multi-level marketing (MLM) company, Vector Marketing. 

The company produces and sells items other than knives. They also manufacture and sell hunting knives, pocket knives, and sports knives. All of their products are made in the United States, and they guarantee that they will last a lifetime.

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What Products Does Cutco Offer?

Cutco is a brand of cutlery and kitchen accessories marketed directly by independent sales representatives, mostly students, through demonstrations at customers’ homes. 

Cutco has opened six retail stores in Indianapolis, Okemos, St. Louis, Novi, Edina, and Erie, Pennsylvania, although its products are not normally sold at retail. Some of the company’s products are manufactured in Mexico and China, while others, such as its knives, are made in Olean, New York.

Here are some of the knives available from Cutco:

  • Kitchen Knives
  • Table & Steak Knives
  • Sporting Knives
  • Knife Sets
  • Table & Steak Knives
  • Knife Gift Sets

The knives were all made in the United States, and their handles are made of thermo-resin, which is stronger, dishwasher safe, and lasts longer. The Lifetime guarantee is possibly the best feature of these products.

Is Cutco An MLM?

Cutco is a legit MLM (multi-level marketing) company. Companies that engage in multilevel marketing are also sometimes referred to as network or direct sales businesses.

As a multi-level marketing firm, Cutco won’t provide its salespeople with a regular salary. After joining Cutco’s MLM program and becoming one of the members, you’ll run your own business as an independent distributor of Cutco products. In exchange, you will receive a 10% commission.

Cutco does not specify what you must do as a representative.

In general, the Cutco MLM program works as follows:

  • Students can work at Cutco for $15 per appointment.
  • The student interview process will be lengthy and complex.
  • They eventually send you to a three-day training course that lasts about seven hours each day.
  • They will request that you write down the names of everyone you know.
  • Contact family or friends.
  • Create a sales script.
  • Schedule a presentation, also known as a sales pitch.
  • To sell the knives, use an already prepared presentation.
  • Get between 10% and 50% of all sales, or $15, whichever is greater.

However, it is unlikely that you can make a good income selling their products. As in the case of most MLM programs, your business relies on recruiting new members to work under you. You will earn a commission on the sales and new recruits generated by the people you hire once they begin producing results.

This is complex on a number of levels (hence multi-level).

Let’s imagine a triangle. Because everyone in the triangle is in your direct downline (in an MLM, the people beneath you are known as your “downline,” and you are their “upline”), you will earn commissions from everyone in the triangle if the person at the top recruits ten people, and each of these ten recruits ten more.

If you can bring in just 10 people, you’ll make $1100.

Most people in your MLM would rather earn a lifetime passive income from recruiting others than a one-time commission from selling products, even if your MLM offers a wide range of products.

Due to the way the money flows, those at the top of the triangle have the most financial success, while those at the base have the least.

Having a large number of people in one’s “downline” is essential for success in a multi-level marketing company like Cutco.

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Is Cutco A Pyramid Scheme?

Cutco is not a pyramid scheme. It is a legit MLM company that allows members to make money by selling their products. As a member of Cutco, you don’t have to make money solely through recruitment.

In contrast, a pyramid scheme recruits members by promising them money or services in return for recruiting others. It is unsustainable and often a scam because members at the bottom end are doomed to lose money.

Those who want to join must pay a membership fee to the company that runs the pyramid scheme. The company would share a portion of the funds raised from each additional member they recruit as a reward.

However, the scam is profitable only for the directors of the company, i.e., those at the top of the pyramid, since they can receive a portion of the payments from every newly recruited member. The scheme continues as long as members recruit and funnel money to the top of the pyramid.

Such companies almost never sell valuable goods or services. The scam’s only source of revenue is from recruiting new members and soliciting more money from current members.

A pyramid scheme would have to grow infinitely to make money for everyone who participates. This is impossible due to the finite population of the planet.

The scam will fail if there are no new recruits and other sources of income. Since the majority of members are at the lowest level of the pyramid, most of them will lose their money.

A good example of pyramid schemes is Vemma, a producer of energy and weight loss drinks. The FTC accused Vemma of operating a pyramid scheme in August 2015 that paid more to recruit new members than to sell products.

New members, who were typically college students and other young people promised high compensation, were required to pay $600 for starter packages and hundreds more for monthly products. According to the FTC, the majority of participants lost money.

Cutco Compensation Plan

Cutco allows you to make money in two ways: by selling products and receiving a commission, or by receiving bonuses from the sales of people you bring into the company.

  1. Commission of sales (20-30%)
  2. The bonus from your downline’s sales (1-10% if they sell $1,000 or more per month)

To be paid, you must submit a complete qualified presentation report to your office manager every week so that they can keep track of you.

In addition, you must sign a standard Sales Representative Agreement and deposit a $200 security deposit for your demonstration knives.

If you choose the second option, here is how you will be compensated:

Cutco offers a 10-50 percent commission on sales or $15 for a presentation (whichever is higher).

The presentation does not take an hour to complete. This is why most people do not comprehend what it means to be paid $15 per hour.

Here’s a strategy based on how much you’ve previously sold:

  • $0-1,000 = 10% commission
  • $1,001-3,000 = 15% commission
  • $3,001-6,000 = 20% commission
  • $6,001-10,000 = 25% commission
  • $10,001-20,000 = 30% commission
  • $20,001-30,000 = 30% commission + 5% bonus
  • $30,001-50,000 = 30% commission + 10% bonus
  • $50,001-150,000 = 30% commission + 15% bonus
  • $150,001+ in career sales = 30% commission + 20% bonus

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9 Reasons You Should Not Join Cutco MLM Program

1. Very Few People Can Make Money With Cutco

Success is difficult to achieve with an MLM company like Cutco.

You can look at the statistic that says 72.5 percent to 99.9 percent of MLM members lose money.

The reason for this is that MLMs have sales quotas that require members to continue selling products in order to remain active and eligible for commissions.

They will not be paid if they do not meet the quota.

As a result, many MLM members lose a significant amount of money before even recruiting one person into the company.

2. Losses From Cutco MLM Program Are Reframed As Investments

Cutco MLM uplines often reframe their financial losses as ‘investments’ in their business so as to keep their reps in an MLM scheme, dangling the carrot of future financial freedom. 

But the reality is that these are not investments. You are unlikely to get the money back. And the return on “investment” is negative in most cases. So saying that it’s an investment is cheating.

3. Cutco is a Cult

Why do people continue to work for Cutco if it appears to be so bad? Our investigation of MLMs revealed that they all have cult-like company cultures.

Critical thinking is actively discouraged among MLM representatives. They are chastised and even isolated when they ask questions that deviate from the ‘this company is a-mazing’ mindset.

MLMs, like abusive partners, encourage you to isolate yourself from anyone who questions your involvement.

Those who leave an MLM are labeled as failures or bad people/influences, and reps are not allowed to contact them.

Rejection from people they once considered practically family is one of the most devastating losses experienced by former MLM representatives.

MLMs frequently expect their representatives to prioritize their events and business over their personal lives in order to further embed them in the business while separating them from their family and friends.

4. You May Need to Purchase Cutco Products Yourself

If you don’t have a large network of friends, family, neighbors, and so on, you may have to buy products yourself each month. It’s a losing proposition all around.

I think it’s quite ridiculous when you have to buy the products you are trying to sell. But this is very common for people who join MLMs like Cutco. That’s why in the long term, you are going to lose a lot of money, not to mention making money.

5. Cutco Products are Overpriced

As with other MLMs, Cutco offers overpriced products. There are many other brands that offer similar products but at lower prices.

Therefore, you may find it difficult to sell Cutco products because your prospects can buy the same product elsewhere at a much cheaper price. This explains why most people who join MLMs only focus on recruitment instead of selling actual products.

6. Cutco’s MLM Business Model Has a Bad Reputation

Some people have benefited financially by joining a network marketing/MLM company. Unfortunately, most people who join MLMs are left with nothing but regret and a lot of useless products that they were unable to sell.

MLM like Cutco is fundamentally flawed. The distribution of commissions is skewed toward the top.

The majority of those in the top tier and pioneers make the most money, while those at the bottom will not even break even after a few months.

As a result, many people do not consider Cutco to be a legitimate business opportunity.

7. Exaggerated Claims Of Income

Cutco, like any other MLM company, makes exaggerated income claims, but in reality, very few people make a good living by promoting Cutco knives.

Cutco’s low retention rate can also be discouraging, as less than 41% of its distributors are active.

According to Cutco’s payouts to distributors, over 99 percent of Cutco distributors never make a profit.

8. Cutco MLM Program Is Like A Pyramid Scheme In Disguise

If you want to avoid losing money every month, the MLM will actually encourage you to recruit people.

Every system that requires you to recruit people in order to make money eventually looks like this.

Cutco is not a pyramid scheme in the traditional sense because you can earn money by selling Cutco knives.

However, in order to make a living, you will need to hire others in reality.

9. Recruiting is Required to Succeed

I don’t recommend MLMs to people for this reason. MLMs like Cutco put a lot of effort into recruiting. Eight out of ten ways to earn money with Cutco require recruiting. If you don’t recruit, you are destined to lose money at the end of the day.

My #1 recommended platform is different. You can make a 4-figure, 5-figure or even 6-figure passive income by promoting and selling products you truly like. You don’t have to recruit people but recommend useful and great products. I will tell you more at the end of this Cutco review.

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How Much Does It Cost To Join Cutco MLM Program?

The great thing about Cutco is that you do not have to pay anything to join.

To become a Cutco sales rep, you have to take the Vector Marketing training course. There you will be taught how to do sales demonstrations to get people interested in your products.

Once you are a member, Cutco will provide you with a product sample to show others. That’s a positive development.

You can also borrow sample kits, and if you do not use them, just return them.

To remain a member, you must sell knives or other products for $100 each month.

And if you do not use the knife kit and are not active by the end of the month, you can either return it or buy it for $75, which is less than half the price.

However, there is a catch. If you are giving business presentations, you will have to pay for expenses such as travel, gas, equipment, and anything else that is required for the presentation. I can assure you that this will be very expensive. You do not have to pay for a membership, but all of these costs add up quickly.

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Cutco MLM Program Feedbacks By Real Users

Positive Feedbacks

  • Joining is completely free.
  • High-quality products
  • The company has been in operation for a long time.

Negative Feedbacks

  • Opportunity for low-income people
  • Several legal actions
  • There is no income disclosure.
  • More funds will be required

Is Cutco Knives a Scam?

I cannot say Cutco Knives is a scam for legal reasons. A scam is defined as “a dishonest scheme; a fraud” by the Oxford Living Dictionary. 

Can you make money selling Cutco products? We already know that a majority of Cutco reps did not earn any money. A few people do make money but only if you put in a lot of effort. And usually, the way they make a lot of money from Cutco is by recruiting aggressively.

Also, Cutco blatantly makes disingenuous and irresponsible marketing claims to recruit members. Therefore, some people do consider Cutco Knives a scam.

My #1 recommended platform, however, has seen a lot of beginners earn four figures a month after joining it for a year.

I will tell more about my #1 recommended platform at the end of this review.

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Final Verdict: Cutco Review

Here comes the conclusion of my Cutco review. Overall, I don’t recommend joining the Cutco MLM program to make money.

You will have a tough time in the beginning when you are prospecting and trying to find recruiters to add to your Cutco commission.

The worst part is that you practically have to ask your family and friends to join your Cutco business opportunity. It’s not fun.

Your upline is constantly following up with you to encourage you to buy more Business Support Material even as you struggle to get people to join your downline.

The reality is that you’re likely to lose more money. Statistics confirm this as well. 99% of people who join an MLM break even or lose money, according to a case study on the FTC’s website.

People who join these MLM-type businesses often feel under pressure to succeed, and that is one of the main reasons they leave. 

Why not consider starting your own online business if you want to earn money and have a flexible schedule? 

Thus, you can choose what you want to promote rather than having someone tell you what you must promote.

Let me tell you how to build an online business in a legit way to make passive income online in the next section. This has allowed me to make a full-time income in a year. Most importantly, unlike MLM models, It’s 100% legit and sustainable.

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Best Alternative To Cutco MLM Program

If you’re beginning your online business journey, you deserve a program much better than Cutco MLM.

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If you like the platform, you can then upgrade to the premium membership to get access to everything on the platform. There are no upsells afterwards.

But How Much Can You Earn with Wealthy Affiliate?

A 21-year old student from Wealthy Affiliate was able to earn $7,395 in just 1 week, which means he made more than $1k a day…all while applying what is taught inside Wealthy Affiliate.

Wealthy Affiliate Testimonial

Compared with Authority Hacker, Wealthy Affiliate has a much longer history, which has been established for 15 years and there are many success stories in the past decade. Actually, Wealthy Affiliate has more than a million members so far, so you can see how popular this platform is.

To give you more examples, here are some of the other inspiring success stories of Wealthy Affiliate members.

Where to Join Wealthy Affiliate?

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