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Comment by drewgross | Hacker News Reader

A sales force amplifies what you are already doing. If a research company can hire a salesman that brings in $1M in additional sales, it makes sense to pay that salesman $900k in salary and benefits, because that's an additional $100k the company can put towards it's research. If you agree with the research, you should be happy they hired that salesman. Saying you agree with the mission of a company as long as it pays it's salesman less than $x doesn't make any sense, unless you somehow know that the salesman is bringing in less than $x.

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Why should the employment question for salesmen be, "How generous can we afford to be?", when for everyone else it's "How stingy can we afford to be?"? The whole reason a company hires any employee, at all, is because it's profitable. The question is why employees who don't contribute to the core mission of the firm should receive 90% of the revenue they generate, while those who do receive a fixed salary irrespective of revenue (and also have to work long hours and take few vacations).

The reason that top salespeople make so much money is that they're pretty much fungible across industry (they can sell basically anything to anyone), so there is a lot of competition for top salespeople. In industries where profit margins are very high (financial products, enterprise software, pharmaceuticals), these companies fiercely compete to get the best-performing reps, paying almost up to the marginal profit from each rep.

well I really don't believe this to be true. Even a salesman has to have something to sell- without good engineering they can't. imho the profits have to be split...

The impetus of this discussion is that pharma companies are buying rights to drugs. So it seems that, no, they don't need to research and create the drugs to market them.

Because to the CEO and the board and the shareholders the salesman contributes to the core mission of the firm (bringing in dollars) and the engineer just contributes to the costs.

By that logic, just fire all the engineers - costs go down and the dollars brought in remain constant or increases - hence the company makes more profits.

This happens all the time. Engineering is outsourced or team is moved to another project and the same product is sold for a long time.

I'm certain that the optimal state of our entire economy is for every firm to make absolutely nothing at all -- except sales. Who needs a product with all that money coming in for free?

There's the fundamental ethical issue.

The drugs you get prescribed should be based on medical necessity, not which sales chick winks at the doctor, gets the doctor a vacation, or gets the coolest promo into the office.

Ask yourself... Crestor is a multi-billion dollar business. That little yellow pill sells for $5-6/unit. Why are any sold today when generic Lipitor (an identical drug for most uses) is available for 80% less?

Except if competitor A hires a salesperson who brings in $1M of sales from competitor B and competitor B hires a salesperson who brings in $1M of sales from competitor A, you now have the exact same revenues at both companies, $1.8M extra in salesperson compensation and an equivalent $1.8M drop in your budget for everything else, including research.

That's not how it works. There's no "stealing" sales, both salespeople are just closing in $1M in value of the available market.

And how would your budget drop if the salesperson is bringing in more than they cost? Not having salespeople doesn't mean the same money will still be coming in, rather it would be potential market left uncaptured.

What you describe is a classic example of the prisoner's dilemma. They will all be better of not hiring a salesperson, but if one does it all have to do it to keep status quo.

That said, the real world is not that simple.

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