I am the guy that loses at never have I ever.

Outside Sales is Always a Scam

This will catch your eye with a bold statement!  I have worked for a couple of outside sales organizations, and I have interviewed with many more.  The funny thing about these scheisters is that you are basically working for them in the interview.  There is no vetting process. They don’t care if you are a hardened criminal or have doctorate level expertise.  They just want a body willing to sacrifice its soul and knock on doors. Even the worst salesman will have a positive sale percentage.  I’m not saying over 50%, I’m saying over 0%. Given enough time, any salesmen will sell something. The sales industry operates on the hunger of certain individuals and the ignorance of others.  

My father has always described it as the “throwing spaghetti against the wall and seeing what sticks” method of job placement.  This last adventure I went on had a small audience. This makes the third company that has tried to scam me in just as many weeks.   The first was a golf related business that tried to have me as his customer, not his employee. The second was a business that did not exist, and this third one was a construction based business that had its eyes on some juicy margins.  The ownership class operates on margins while the employee class operates on hours, and these margins were very high. I have more experience than I want when it comes to commission based sales, and these numbers were realistic, but I’m not sure how realistic the company was.  

Now, if you are an hourly employee who has never known the internal workings of how a business is run from its owners, I can tell you that the best salesmen often end up as business owners.  There are a wide variety of traits that are gifted to salesmen either by experience or by education, but mostly by failure. The risk that an employee antes up is his or her time. The risk of an employer antes up is his or her money.  

Not in outside sales though!  The employer circumvents all of the employee protections and offers up a promise of a commission.  With this formula, the business reduces risk to its most minimal and increases its profit because the company no longer has to pay for the workers’ time, or benefits, or insurance in many cases.  This is another disruption of the status quo, yet unlike the tech industry, outside sales scams have been going on for decades. The real crux of the situation is that who is preyed upon has often created such a low perception of capital that the unemployed person is often willing to put his or her time directly on the line in order to “potentially” earn a paycheck.  The employer will sell the idea that the company is taking a risk on the salesperson, but the risk is mitigated by a profit margin high enough to lure the salesperson into the fray.  

I too have been throwing spaghetti against the wall, and started applying to more jobs than I wanted.  The problem is, if you take one job, you have to postpone, or eliminate, any other job that might present itself.  I’ve often overlapped careers, and have been caught like a cheating boyfriend on a couple occasions. I worked as a Texas hold’em poker dealer while I was working in a laboratory.  Although I was working full-time, the casino wanted to be able to schedule me all times of the day, and when they found someone to replace me, poof! I was gone. Another was when an employer gave me an ultimatum of working in his empty shop, or being affiliated with one of the most prestigious country clubs on the planet. The choice was easy, but at a cost of my passions. Full-time employment from an employer’s perspective means ownership.  They look at the total cost of your employ, and they expect only profit. Rightly so, I only expect profit from working. However, once the idea of profiting from labor for future gains became popular, outside sales became the sweet fruit upon the thinnest branch just out of reach without risking injury.

What I have learned is that canvassing has a long term payout, but the return for doing the work is never compensated appropriately.  If I was to generate leads (an expensive word in the sales world), those leads often create gains for the company. Marketing isn’t free, and there are companies out there that try to get a prospective employee to advertise itself through the candidates.  There are so many names associated with this kind of racket – Intern, trainee, fool! The list goes on and on. Theoretically, the business would be providing the employee protections that the employee cannot afford on his own. A business should have cash reserves to pay in times of drought, and the employee should never go home with an empty wallet.  

“Why should I pay him if he does not perform?”  Says the Owner

“Because he did the work, he took a risk of his time, and you did not.  You should pay him for his time.”

“If he makes a sale, his time will be greatly compensated!”

“Ahh, but what if your product has severe competition? And a backlog that goes back 2 years?”

“[Typical sales bullshittery jargon] Bbbut, but, but [I will continue to sell you this job despite knowing the specific objective that makes this job risky for the employee yet very profitable for the employer]…we’ll give you benefits after 90 days!”

“So, in 90 days of canvassing for you, generating a minimum of 500 leads, you are going to promise me stability?  Why not pay a draw against your promise of a better than livable wage?”

“Well, we have had experience with that formula, and we found this to be the best way to do it.”

Of course it’s the best way to do it, you circumvent labor laws, employee protections, and at the worst of times for an employee – wages.  There is a need for many more companies than we currently have in the United States. Playing by the rules does not have a positive correlation with profit.  If an employer follows all the legally mandated employee protections, his profit margins would not be so great. Without the great margins, the employer will have trouble enticing thristy salespeople.  The obvious result for those businesses that are necessary, but not astronomically profitable is to sidestep the rules that are the hardest to get caught breaking – a path of least resistance. If I were to create 500 leads, there is a chance that 0 of them end with a sale. There is a chance that all 500 would lead to a sale.  Of the 5 people in the room, 1 thought about selling all 500, and I was the bitter Betty who thought about the idea that it was entirely possible that 0 of those leads could end in a sale. Why? Because there is more work that needs to be done in this area than there are workers to complete the work. I had to sit through an hour long presentation that makes a hungry salesperson salivate.  The margins were high, the available customer base was vast, and from my experience in canvassing, was completely unreasonable.

“When do I get paid?”  

“You get paid weekly!”

Oh, that’s great, except you only get paid commission when the sale has been finalized.  Considering, it is working with insurance companies, and not directly with the customer, this wonderful company has promised a win, win, win scenario.  The customer pays nothing, the company makes a 75% profit, and the salesman gets a 25% commission on profit. This business model banks on the idea that the insurance company is too ignorant to know it is being gauged by some middle man that promises a high workload but operates out of a leased office space in a high rise office building. 

The building was not what I expected from a construction business, and that was the first red flag.  I walked into the foyer to an Indian gentleman who got to the receptionist before me, “Excuse me, is this the Spaghetti Sales Factory?”

“Yes” said the receptionist, “Can I get your name?”

“I’m here to interview with the Spaghetti Sales Factory,  as well,” I said and asked to use the restroom. When I returned, we both walked toward a conference room – more like a classroom in an office building.  There were 2 presenters – 1, a young kid who looked like a community college dropout who must have mastered the art of bullshitting from selling door to door, and is now climbing up the ranks of this little company.  The 2nd was a Freddie Kruger looking guy – short, bald, aggressive, and hungry. His methodology was to just drive his philosophy about making money into the entire sales pitch. He wore a stupid button that said, “Ask me how to make $$$$”  

The Indian guy never even made it into the conference room.  I had made the decision to go to this interview because the advertisement sold itself as an INSIDE sales job, specifically claiming, “NO COLD CALLING!”  I have worked a sales job where it involved incoming cold calls – The customer accidently clicks a button on the internet and is called by call center hub, passed out to one of the salespeople, and usually the customer doesn’t know they are involved in an elaborate scripted sales pitch.  It was too late for me to turn back once I had scheduled the interview. I knew it was a sales job, I knew it was going to include canvassing, but I didn’t know it was a sales presentation. At no point did either of these presenters show any interest in who the employees were aside from rapport building.  I could have been [I might be] a complete psychopath, but they didn’t care. As I sat down I was handed a paper application. It is the second paper application I filled out this month. Why should I be filling out a paper application when I was forced to submit an online application, and a consent for a background check?  What value does me writing in my chicken scratch the names and dates of my last employer and what high school I graduated from? As soon as I completed the form, I hear, “You can make as much money as a doctor, and you don’t even need to go to school!” Balancing on the cusp of white collar and blue collar, I am no stranger to people directly insulting my high level of education.

One guy came in late, filled out the useless paper application, and then left.  Where did that guy go? My assumption is that he had been through this carnival before, knew it was a pitch to get salespeople, and left.   I waited until everyone else left. The first guy who was eager to sign up for this job was a gym rat who was wearing training shoes, sweatpants, and had a gallon jug of water with him at all times was elated to join.  There was a female sitting behind him, she too signed up. The other gentleman to the front of me also sniffed out the bullshit and simply said goodbye without burning a bridge, or building one.

I waited until the real salesman left the room, and I spoke to the presenter in private, “Look, I didn’t want to say this in public, and I don’t want to burn a bridge, but this isn’t new to me.  I think you may have a good business model, but I’m not in the position to take this kind of risk.”

“What risk? We just want to make sure we can retain employees.  We used to give a $1000 sign up bonus, but once they received their bonus, they would quit!”

This is like your girlfriend saying, “I used to suck my ex-boyfriend’s dick all the time, but I just wasn’t getting what I wanted from him, so I’m just not going to do that anymore!”  I mean, if that isn’t a sales pitch, I don’t know what is!

Like Mark Cuban after being presenting some clothing deal specifically geared toward Damon, “I respect what you are doing, but I’m out!”  I showed concern about the industry, the specific job tasks, and the real difficulty of door to door sales in Texas – Guns and space. Texans are proud to own guns, and they are very proud of their space.   What does this mean for door-to-door sales? It means that houses are very spread apart, and that if a stranger goes knocking on doors, he or she might be met with a shotgun to the lips. Door-to-door sales is hard enough without the risk of walking miles only to reach a handful of houses and risking the occassion xenophobic sociopath who believes having a doorbell is a call to duty.  

As I said, I liked the idea of walking around, trying to build a clientele in an area that has similar homes structures and storm damages.  I don’t like the idea of showing up to a person’s home unannounced and trying to scam their insurance company. The gym rat guy really liked the idea of walking around, and they big, fat, real salesman hated the idea of walking from door-to-door.  When I lived in San Diego county, I would canvass an area with twice the urban density. The return rate was low. The houses were closer together, and there is much less of a culture of shooting first and asking questions later.  

Every time I was trying to bring up potential income objections, Freddie Kruger would continue to sell me on the job.  He didn’t know how to stop selling! I even called him out on it at one point. Once he could not answer my questions, he just turned it on to himself and started selling himself.  I wasn’t buying it.  

I had explained that I didn’t want to burn a bridge, and that if they truly were looking for account managers, and they were truly a legitimate company that spends more money on lawyers than business cards, that they should reach out to me.  Akin to walking up to a model and telling her that if she ever wants to ditch the losers she goes out with, she should go out with me – a fool’s errand. I made a couple of jabs, but at the end of the day, they came out ahead. My time was wasted, and they managed to wrangle up enough fools to get their business off the ground.  They weren’t looking for managers, they were looking for mercenaries willing to put their time on the line. I mentioned that I had 30 years of experience with salespeople. I was dumb enough to be seduced into this presentation, but I wasn’t dumb enough to risk my time for a company that might not exist the next time I went into this building.  The fly-by-night companies are very common in the construction industry. Horror stories of people literally racing to the bank are common for anyone who has worked in the construction industry for more than a decade. The fear is greater on the sales side, because money allocated to labor is a direct cost for the company, where paying sales commissions requires a longer investment.  Never once did the company mention a realistic timeframe of commission payout.

Just because something is a scam, doesn’t mean it can’t be profitable for the salesperson.  I worked for the diamond industry long enough to recognize that it was a scam in many aspects.  I was never scammed by the diamond industry, but I played a role in the scam. It wasn’t that I didn’t want to play a role in scamming the scammers, I just didn’t want to do it with the risk on my own shoulders.  They wanted to “start training” the following day. I felt like I didn’t get a feel for how the business operated, what our specific daily job task was, or where this company would be by the time my 90 days was up.  They often deflected any questions that related to the daily operations – 2nd red flag. The final red flag was when Freddie Kruger decided to aggressive defend my objections to the holes in this spurious tale of great success. 

“I have been to many of these presentations, always selling their ideas but over-promising and under-delivering.  Surprisingly, this is the smallest audience I have seen.” 

“We have a very rigorous vetting process. That is why the attendance is this small!”

Is it? Who were these rejects?  I did not see a pool of talented individuals.  I saw a lot of disappointed faces. Some of those disappointed faces even signed up.  I could very well have been wrong, and this company will be full of millionaire salespeople [however unlikely].  The industry is very profitable, and we might be entering into an employment market that has loads of people ready to work for the legal minimum just to risk their lives to walk up on a rooftop.  The margins are there, they claimed to have the entire program set in place ready to present it to the world. Or, they are just looking to prey on self-esteem deprived unemployed individuals who are looking for a position that shares reward and responsibility equally.  Scammers are always shitty people that should be punished for trying to cut corners at the risk of someone else. Scamming unemployed people is even more sinister. It is an unregulated market that the shittiest of the shitty people utilize to steal a peoples’ time. Trading time for money goes back to the birth of capitalism.  What can we do about trading your time to make someone else money?  

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