Read any want ad section and you will notice one thing is abundantly clear. A predominance of the jobs available in the United States are in the field of sales & marketing. This phenomenon has always troubled me.
A salesperson is selling a product, but someone has to produce that product, a process that is surely more labor intensive than selling it. So how can it be that we always need more sales people? Because the production jobs are going away.
I’ll briefly point out that many sales positions are commissioned, so companies often over-hire because they don’t really have to pay salespeople unless they do well. They’re effectively throwing ten darts at once in hopes of hitting a bull’s-eye instead of putting the effort in to being a better dart thrower. It’s both lazy and ineffective. You often damage your brand more than improving your actual sales.
But while advertising is important, it should always play second fiddle to production, let me give an example.
If I were to offer you the car of your choice, cost-no-object, what would it be? All over the world, many of you would choose a Ferrari. Yet, have any of you ever seen a Ferrari television or magazine ad? Likely not.
Yet, millions of you would buy one tomorrow if you could afford it, despite never being faced with a single advertisement from them. Aside from their racing efforts and emails, Ferrari doesn’t really do much marketing. People wear Ferrari-logoed clothing and put up Ferrari posters, essentially marketing Ferrari for free. This is genius! You pay Ferrari for the privilege of marketing their stuff, instead of them paying someone to market it for them.
So how is it possible that one of the most desired and recognized objects on the planet does not need to be sold? Because it sells itself, just look at it!
A beautiful design, flawless engineering, a sound that is mechanically orgasmic, and a palpable passion ooze from these machines. This quick video, one of their few actual marketing efforts which will never air on TV, but has been shared (for free) at the time of this posting 5 million times, should illustrate my point.
The lesson here is pretty clear. Too often you see business owners thinking that their issues stem from poor salesmanship instead of poor craftsmanship.
There are certainly bad salespeople, and some turnover should be expected, but marketing in general seems to be where companies want to spend their money instead of research, development, and production. I see (and occasionally have worked for) companies who have incredibly outdated equipment, inefficient internal processes, and products of inferior quality that could be easily updated, but they’ve emptied their bank account on advertising instead.
We’ve all heard the story of The Goose that laid the Golden Egg, this is exactly what many companies are doing. Profit-margin is the holy grail these folks are after, but this is how they kill the goose.
A company with a great reputation will hunt for a more cheaply made product, often in China, and then hope through marketing they can continue holding on to their market share. But once you gut that goose, and people find out you used a respected name to market an inferior product; profit margins may remain high, but overall profits will start to plummet as people take their business elsewhere.
For instance, let’s look at Irwin tools. You may have never heard of Irwin, but you’ve certainly heard of Vise-Grips, and they’re the makers of them. Since 1921, they have been making these pliers that just about every person has in their “tool drawer” at home. Irwin Vise Grips have been a superior quality hand tool for nearly a century, but no more. Irwin moved them to China in recent years as they hunt for greater profit margin.
As a libertarian, I certainly want companies to have the freedom to build wherever they wish to, but that doesn’t mean I don’t think it’s stupid.
These companies are hoping most people won’t notice the loss in quality and continue paying a premium price, but consumers who use products are pretty good at noticing when a product’s quality has been diminished, and it’s insulting. Believe me, I notice the difference—the new Vise-Grips are clearly inferior.
So these days, I don’t mind buying a cheap $5 pair from the local Harbor Freight, because I know they’re probably the same plier at this point, and I’m not paying extra for the Irwin name if I’m not going to get the legendary Irwin quality.
They’re now just another cheap Chinese version no different from all the other copies out there, there’s a good chance they all come from the same factory—China doesn’t exactly believe in intellectual property. We are talking about a country that brazenly opened up an Apple Store that wasn’t actually affiliated with Apple in any way. So it’s not unlikely that the factory Irwin commissioned to make their pliers isn’t selling the exact same pliers to others, literally giving Irwin’s design away to someone Irwin didn’t sell it to.
I want to point out that there can be no doubt, with labor unions, overbearing regulations, the highest corporate tax rate on Earth, and the ever-increasing cost of living in the United States thanks to a poor economy, the costs of building in the U.S.A. are ruining our chances of keeping these jobs. Irwin is not completely to blame here.
But if the American people demanded our government ease regulations, get rid of the corporate tax rate (they can’t vote, so why should they be taxed?), and make the concept of manufacturing in the United States more viable again, maybe the want ads will be looking for more than just the next Ron Popeil, and real jobs and quality products will again be a part of the American economy.