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Is Sales Dying?

Dr. Joe wonders what’s happening to sales? The number of sales people in the economy is declining, and they’ve been essentially replaced by computers and server farms. All those sales call reports have been replaced by analytics. All that T&A expense became electrons. Entrepreneurship is critical to a growing economy, but having the right context to the statistics helps put it in perspective. And then there’s trade. Can we change the subject? Some economists are finally writing with clarity about the topic.

Monday, February 27, 2017

There are few industries that show the effects of e-commerce more than the travel industry does. In 2000, there were 124,000 US travel agents. By 2015, that was down to 66,560, according to the Bureau of Labor Statistics. When you take population growth into account, the number of agents has about halved.

Personally, I find it hard to believe that there are that many left, as we book everything online from hotel to rental cars, and of course, air fares. Some corners of the industry, such as cruise bookings or for international travel, still have agents hard at work, especially for first-time travelers who benefit from their guidance. The remaining agents tend to specialize in niches based on destinations, mode of travel, or for other specific reasons, such as managing and negotiating travel spending on behalf of corporate and clients. 

Travel agents are sales people. Has what’s happened to them happened to others? The number of those professionals has also suffered, but but to a lesser degree, for now. You can see the change in demand from the direction of salaries. Since 2009, the inflation-adjusted salary of a technical sales person is down -1.5%, while that of a non technical sales representative is down -2.2%. Since 2009, the number of sales people in wholesale and manufacturing declined by -8.7% (-72,360). In that time period, real GDP grew by +10.3%. What happened? When you look at what sales people do, which is primarily a communications role, their job has been replaced by computers.


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About Dr. Joe Webb

Dr. Joe Webb is one of the graphic arts industry's best-known consultants, forecasters, and commentators. He is the director of WhatTheyThink's Economics and Research Center.

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