Ok, so I’m biased. I’ve been a career sales professional for almost 20 years. I always knew I wanted to be in sales, I just didn’t know I knew. Confused? Allow me to elaborate. You see, when I was asked in high school what I wanted to be, my answer was always “I want to be that guy on an airplane. He’s in New York one day, and Paris the next. He wears a suit and meets with CEOs the world over.” What I didn’t know was that guy is flying around because he’s closing deals. That guy is selling.
What I find hilarious, is even though I didn’t know I wanted to be in sales, I found my way into anyway, almost by accident (How’s that for the power of the subconscious). I had a roommate who did a crazy summer job selling books door to door. We all thought he was crazy, until he came back from summer break, and told us how much money he made. I told him I’d join him since it sounded better than working at Burger King all summer.
The work was hard, 80 hours per week minimum, 6 days per week. But I made 5 times what I made at BK the summer before…. so I did it again the next summer, and the next. 3 Summers in all. By that time I had knocked on over 12 thousand doors and pitched to thousands of prospects. By that time I had more sales experience than most seasoned sales professionals get in a decade. So naturally when I graduated, I was more qualified to be in Sales than any other line of work. So my first job out of college was in sales, and if you’re sick of hearing the word Sales, sorry not sorry.
So why do I think Sales is the best job for building wealth? I’ll get to that, but first let me answer some objections you might have up front, which is what a skilled sales professional does.
You may be thinking, sales people are slimy, or that you’re overqualified for a sales job, or sales is beneath you. Well, to address the first point – that sales people are slimy – I agree that some are. But I would argue that they aren’t good salespeople. Unfortunately there are more sales jobs than there are good sales people to fill them. As a result, many sub par sales people end up filling sales roles for which they’re really not a fit. As a result, consumers get stuck dealing with slimy sales people and getting a bad taste in their mouth. It’s no wonder only a small percentage of sales people on every team bring in most of the revenue.
Good sales professionals leave their customers happy and feeling good about their purchase. They take the time to find out what their customer needs, and then meet that need. To sum it up, good sales people aren’t slimy, they’re consultative.
To the second point, that you’re overqualified, or that sales is beneath you. I would argue, that no matter what line of work you’re in, you could benefit from having above average sales skills. So you’re a doctor? Being able to sell your care plan to a patient (ethically) would increase your case load and patient satisfaction, and prevent them from seeking second opinions. So you’re a teacher? Would the ability to sell your lesson plan to uninterested students make life easier? If you have a boss, being able to sell would drastically improve your odds when asking for your next raise, instead of just blurting it out. Finally, selling is basically just effective communication and listening. Who couldn’t benefit from that?
As far as creating massive wealth from Sales, here are the reasons why I believe the profession is particularly suited to just that end.
The One Skill Billionaires and Multimillionaires Attribute to Their Success
In this Marketwatch article by Catey Hill she explains that in the book “The Wealthy Elite” by historian Rainer Zitelmann, out of 45 multimillionaires and billionaires:
” …roughly two in three said that their talents as sales people had been a “significant” factor in their financial success. More than one in three said they owed 70% or more of their success to their sales talents.”
Zitelmann isn’t alone in his belief, and neither are the high net worth individuals who were interviewed.
For instance, in this article by INC Magazine, Jeff Haden higlights how Mark Cuban (ever heard of him?) said on the podcast How I Built This, :
“I would get a job as a bartender at night and a sales job during the day,” Cuban “and I would start working.
“Could I become a multimillionaire again? I have no doubt.”
Mark saw how important sales skills were during his time on the show “Shark Tank.” Cuban would listen to aspiring entrepreneurs looking for capital to fund their business ventures. Take a wild guess what every single business owner on Shark Tank is doing… that’s right, they’re selling.
You could have the best business model in the best industry with the best product. But if you need capital, and your pitch falls flat, game over. Effective Selling is what makes the difference.
Uncapped Potential – Sometimes
So aside from the fact that Rich people say it is, another reason I think sales is an excellent avenue for creating massive wealth is the potential for uncapped earnings – sometimes.
Many times, when pitching a job to a potential candidate, managers will tell the candidate that the “earnings potential is uncapped!” Sometimes this is true, and if it is, you should jump on it. But sometimes it is not, let me explain.
In some jobs the earning potential is capped by the market, the territory or the comp plan itself. I once worked for a company that changed the comp plan almost annually. You needed a PhD in economics to understand how the hell you got paid. I was the company’s best rep 2 out of 5 years. I grew my territory 300% in those 5 years, and made less money each of my last 3 years. This is a huge red flag. If the comp plan is complicated, don’t take the job, or if you already have find another one with a simpler comp plan.
I finally woke up and decided to interview for another position. During my interview I asked the hiring manager what the comp plan was. His answer, “13% off the top, plus a 10% bonus if you hit plan. It’s not complicated, next question.” I did some quick math in my head and realized, if I tripled my territory here like I did at my current job, I’d triple my income. I was sold.
You want to seek out these types of jobs. They’re usually straight commission, but in my experience they pay more than jobs that offer more security. Even straight commission jobs often have a recurring revenue stream that acts like a base of income anyway. If not, the company will usually offer you a draw to cover you in between deals. All of these structures are better the everchanging comp plan, based on growth, or some other ridiculous metric. Talented sales reps want to make more year 3, than year 1 if they are growing, and that’s the way it should be.
So, if you happen to land one of these jobs, you can increase you your earnings, and hopefully your investments each year, adding to your net worth each year as well. This is exactly what I did.
Base Plus Commission Structure
In addition to the increased earning potential, the basic structure of many sales jobs lends itself to the discipline of wealth building. As I mentioned earlier, many sales jobs, especially those that are more in the B2B world, are structured with a base + commission comp. plan. With this structure, the sales representative is paid a base salary just for working with the company, and then is given sales commission paid out on various performance metrics. My first sales jobs out of college were structured this way. Even some 100% commission sales jobs have some recurring business every month, then big tickets items that both make up the sales person’s overall compensation. Either way, if you can learn to live off of your base pay, and invest your commissions, you could accelerate your wealth much faster than if you try and live off of your commission.
No matter what, don’t ever get yourself into a lifestyle where you need to make commissions just to pay your bills. I learned this lesson the hard way. My first job out of college was a base + commission sales job. My base was a meager $45,000 per year. However, my first quarter I was paid a $10,000 commission, mostly from deals the previous rep had closed. I thought I was rich. I spent like crazy. I took the big room in the house I was renting, bought a ridiculous car that I never should have bought. I took trips to Vegas and was out every weekend. Then the next quarter, the commissions dried up, and I realized I was screwed. My base wasn’t enough to keep up with my lifestyle and I had put myself in a trap which I described in a previous post.
I vowed never to get into that position again. Each job I subsequently took, I was living off my base salary, or no more than 80% of my lowest month’s recurrent business if the job was 100% commission. (Note: some 100% commission jobs are selling large capital items, where you are given a monthly draw which is paid back when you close a large deal. You keep the difference between the draw you pay back and the commission from the deal. In these types of structures, I recommend taking a small draw, and living off that alone.)
After several years of living off my base alone, and saving my commissions, my commissions were stacking up and I was living well below my means. However I had become accustomed to a certain lifestyle and didn’t feel like I was missing out. I now had hundreds of thousands of dollars to invest, and this jump started my wealth journey.
This structure alone lends itself to massive wealth building. If you can learn – and almost force yourself – to live modestly and invest commission, it can accelerate the wealth building process. It’s not complicated, but it takes discipline.
It’s a Skill That’s Transferrable to the World of Investing
The final point I’ll discuss in this post is that the world of sales, especially B2B sales, is transferrable to the world of investing. What do I mean by this? Well, if you sell long enough, and grow in your career, you will inevitably find yourself selling to more sophisticated buyers. If the item is large enough (Medical Capital, Enterprise Software, IT solutions, etc) the company CFO may get involved. At this point you will find your objections will also become more sophisticated. They’ll want to know what their ROI is or they’re accounting rate of return. Maybe they’ll use the present value concept to analyze the cost of your solution, or they’re more interest in the IRR (Internal Rate of Return.) They’ll ask for different financing solutions and want to know if they can amortize their equipment with one solution vs. the other. If any of this sounds like a foreign language, don’t worry, it did to me too. But basically what you’ll be selling to the CFO is how the investment in your product will affect their bottom line. You’ll learn to think like an investor, and over time, you’ll learn to analyze how you invest your money. Being a sales person, if you do it long enough, will make you a better investor. I don’t think many people talk about this fact enough. But I do believe its one of the reasons so many wealthy people credit sales as their most important skill.
So there you have it, the reason why I believe effective selling, is the best career for creating massive wealth. What do you think? Feel free to leave a comment or drop a like if you liked this post. Until next time, live free.
Collin
