OLEAN, N.Y. -- Tom and Melissa Miklinski have just
agreed to spend $200 a month for five months for a spiffy new set of
kitchen knives, but the young salesman who got them to sign on the
dotted line isn't through with them yet.
If the couple will
refer him to two people _ right now while he's still there at their
dining room table _ salesman Ben Owliaie will notch another point
toward a $200 scholarship.
working on it, getting closer and closer," the 18-year-old tells the
Melissa Miklinski agrees to make the
Owliaie gives her a script.
"I just met with
Ben Owliaie," she's supposed to say. "My appointment was pretty fun.
Would you meet with him?"
The calls are made, referrals
sealed. A good day for Owliaie. A crucial day for CUTCO Cutlery
As its college-age sales force goes, so goes the
western New York cutlery maker. There are no retail outlets stocking
its high-end wares, no Internet sales except to existing customers.
CUTCO relies on the college students and these in-home
encounters for virtually every sales dollar _ $182 million in 2004,
$242 million the year before.
While changing times and
technologies have swept up other traditional direct sales companies
_ Tupperware and Avon are now stocked at mall kiosks and Web sites _
CUTCO's reach remains only as long as the arms of its young sales
It has been that way since the 1970s when college
students brought in to bolster the adult sales force in the summer
became the primary sellers.
"We have been at it long enough
that we recognize that there are shortcomings," said Erick Laine,
chairman of the board of Alcas Corp., the parent company of CUTCO
and its sales arm, Vector Marketing. "But they make such a perfect
sales force that we have no desire to change it."
(pronounced oh-woll'-ee), a Canisius College freshman with a career
eye on Wall Street, is typical. Recruited by mail before his high
school graduation, he signed on for three half days of training that
served as a crash course in the product and how to sell it.
"It was a lot of role playing, going over the program, over
and over again, why CUTCO is so much better," said the finance
major. "It got us pumped up."
Now, armed with a demo set, a
couple of carrots, a length of rope, shoe leather and newfound
self-confidence, Owliaie gives his spiel, a mix of youthful zeal and
seasoned sales speak.
"Is that cool or what?" he asks as Tom
Miklinski glides a knife through a narrow length of rope in a single
stroke. Then later, "I'm sure you would agree that CUTCO is a
Leaning so heavily on students, who by their nature
are temporary employees, may seem like building a castle on shifting
sands, but company officials say that's not so.
ever-changing sales force opens the company to an equally changing
potential customer base. Each sales person is told to make their
first pitches to the people they know best _ parents and friends _
and network from there via referrals like the ones from the
"This is not walking down the street, knocking
on doors," said Alcas president and chief executive James Stitt. He
estimated more than 40,000 college students sell CUTCO in any given
The in-home approach is a logical one for a big-ticket
item like CUTCO, whose knife sets can range from $600 to $2,400,
experts said. The 45-minute sales presentation gives customers a
lesson on the knives' construction, with an emphasis on their
American-made status and a "forever" guarantee that is passed with
the products through generations. All are woven into a demonstration
that keeps the potential customer engaged _ slicing, peeling,
inspecting, handing over pennies to be snipped in half or spiral-cut
into a corkscrew.
"Certain products are very good for the
direct sales model because they benefit by that demonstration:
kitchen products, home decor," said Amy Robinson, spokeswoman for
the Direct Selling Association, an umbrella organization for the $29
billion a year industry. "If you can see those products in the home,
it's so much better than seeing them on a shelf in a store."
Some colleges, including Purdue University and Illinois
State, have integrated the CUTCO presentation into sales and
marketing courses as a way to apply academic concepts in the real
CUTCO sales reps receive $14.25 for each
demonstration, and a percentage of the sales, beginning at 10
percent. It's not for everyone, judging by the good number of
complaints from former reps online, which take issue with everything
from unpaid training time to having to pay for the demonstration
The sales model has not kept the uncertain economy from
hurting Alcas, headquartered in Olean, a city of 15,000 about 65
miles south of Buffalo. Three rounds of layoffs over the past year
have reduced the staff at the manufacturing plant to a little over
700 employees, down from more than 1,100.
attributed to flat and declining sales in 2003 and 2004, followed
several years of growth and hiring, said Stitt.
were $130 million in 1999, increased 17 percent in 2000, 39 percent
in 2001 and 17 percent in 2002, he said, leading the company to hire
hundreds of workers and spend $30 million on equipment and building
The company projects slight growth in 2005.
On the Net:
CUTCO Cutlery Corp.:
Direct Selling Association: www.dsa.org