What is Wrong With Salesmen?

There really isn’t anything wrong with earning a living as a commission salesperson. I have friends who have earned their living selling various products. They are ethical people. At least one of them left a lucrative position because he could no longer deal with the changing requirements and products of his company. If you want to be a successful salesperson, you must believe in your product.

There is, however, an inherent conflict of interest between you and the salesperson. When you are dealing with salesmen you must always remember if you don’t buy anything they don’t get any money.

Back when I worked in factories, those of us in supervision envied successful salesmen. They could earn three to four times the salary of mid-level factory supervisor. We use to say those people had the “gift.” It is a gift. The ability to skillfully manipulate others to act in a way that is not always in their best interest is rare skill. Salesmen must hear “No.” a hundred times a day and still start all over with a fresh and positive attitude with the next customer. They must be able to get up, on their own, every morning. Then without specific directions go out and make that next sale. Since she is paid on the basis of commissions, by definition a saleswoman has earned her pay in a way that is not true for most of us.

No sales; no commissions; no pay.

Unfortunately, their commission structure is based on the interests of their company, not on your interests. In the life insurance business there is a saying, “Sell whole life can’t sleep. Sell term can’t eat.” Whole life policies except in very unusual circumstances are a rip-off, pure and simple. They are a money machine for the insurance companies. Therefore the commissions on these products are very generous. In comparison, term insurance is dirt cheap. It provides protection to minor children when it is needed. Then when it is no longer needed it goes away. You can buy term insurance on the Internet from a variety of reputable companies without even messing with a salesman.

I knew a man who sold cars during the first oil shock of 1973-1974. He worked for a car dealership that sold Honda and Mercury automobiles. Salesmen were paid a flat $60.00 for a Honda. At the time there was a waiting list for Honda Civics. If he was able to sell a big gas guzzling Mercury, he could earn up to $700 per sale. In 1973 that was serious money.

Even if a salesperson is working for you, their interests and your interests are not quite perfectly aligned. Consider real estate. A salesperson might be able to earn a 7% commission on a given sale. Again, by definition they earn their money. No sales; no commissions; no pay. The good ones are worth their weight in gold. However, while a $10,000 difference in the sale price of a house is very significant to the owner, it only represents $700 to the real estate agent. Ten thousand dollars is only 2.5% of the price of a $400,000 listing. A drop in a commission of 2.5% is not significant, especially if it means a quick sale. A study described in the book Freakonomics by Steven Levitt and Stephen Dubner demonstrates that when real estate agents sell their own homes, they sell them at measurably higher prices. They are also willing to wait longer to get the higher price.

When you are dealing with a commission salesperson, treat them with respect. If they have been around for longer than a couple of years they are good at their job. The bad ones don’t last long. They are the beneficiaries of constant training. They know how to read you. They know your reactions to their pitch, before you understand what is happening. They are backed by a marketing machine that has been building images in your subconscious mind for years at the cost of millions of dollars.

There is a reason that a good salesman can earn more in a year than a heart surgeon. When I worked in factories, we were well aware of what was happening in sales. No sales; no orders; no work. When our sales force wasn’t selling we weren’t working. One good salesman can provide jobs for 100 factory workers. Good salespersons are the elite shock troops of capitalism. They earn their money.

Learn from salesmen. I recommend you check out basic books on sales that apply to some aspect of your job. In a way, we are all salesmen, even if the only product we are selling is ourselves. Sales courses also teach self-motivation techniques and the psychology of the sale. Even if you don’t have the gift, learn from those who do.

And for heaven’s sake! “Let’s be careful out there today.”