Many independent agents are paid by commission only, whereas sales workers who are employees of an agency or an insurance carrier may be paid in one of three ways-salary only, salary plus commission, or salary plus bonus. In general, commissions are the most common form of compensation, especially for experienced agents. The amount of commission depends on the type and amount of insurance sold, and whether the transaction is a new policy or a renewal. Bonuses are usually awarded when agents meet their sales goals or when an agency's profit goals are met. Some agents involved with financial planning receive a fee for their services rather than a commission. Company-paid benefits to sales agents usually include continuing education, paid licensing training, group insurance plans, and office space and clerical support services. Some may pay for automobile and transportation expenses, attendance at conventions and meetings, promotion and marketing expenses, and retirement plans. Independent agents working for insurance agencies receive fewer benefits, but their commissions may be higher to help them pay for marketing and other expenses. Related Occupations Other workers who sell financial products or services include real estate agents and brokers, securities and financial services sales representatives, financial advisors, estate planning specialists, and manufacturers' sales workers. Sources of Additional Information Occupational information about insurance agents and brokers is available from the home office of many life and casualty insurance companies. Information on State licensing requirements may be obtained from the department of insurance at any State capital. For information about insurance sales careers and training, contact: Independent Insurance Agents of America, 127 S. Peyton St., Alexandria, VA 22314. Internet: http://www.iiaa.org ☛ Insurance Vocational Education Student Training (InVEST), 127 S. Peyton St., Alexandria, VA 22314. Internet: http://www.investprogram.org National Association of Professional Insurance Agents, 400 N. Washington St., Alexandria, VA 22314. Internet: http://www.pianet.com For information about health insurance sales careers, contact: National Association of Health Underwriters, 2000 N. 14th St., Ste. 450, Arlington, VA 22201. Internet: http://www.nahu.org For information about insurance careers in the property and casualty field, contact: Insurance Information Institute, 110 William Street, New York, NY 10038. For information regarding training for life insurance sales careers, contact: ☛ Life Underwriting Training Council, 7625 Wisconsin Ave., Bethesda, MD 20814. For information about professional designation programs, contact: ☛ The American College, 270 Bryn Mawr Ave., Bryn Mawr, PA 190102195. Internet: http://www.amercoll.edu Society of Certified Insurance Counselors, 3630 North Hills Dr., Austin, TX 78731. Internet: http://www.scic.com/alliance The American Institute for Chartered Property and Casualty Underwriters, and the Insurance Institute of America, 720 Providence Rd., P.O. Box 3016, Malvern, PA 19355. Internet: http://www.aicpcu.org Manufacturers' and Wholesale Sales Representatives (O*NET 49002, 49005B, 49005C, 49005D, 49005F, 49005G, 49008) Significant Points Many are self-employed manufacturers' agents who work for a commission. Although employers place an emphasis on a strong educational background, many individuals with previous sales experience still enter the occupation without a college degree. Many jobs require a great deal of travel. Nature of the Work Sales representatives are an important part of manufacturers' and wholesalers' success. Regardless of the type of product they sell, their primary duties are to interest wholesale and retail buyers and purchasing agents in their merchandise and to address any of the client's questions or concerns. They also advise clients on methods to reduce costs, use their products, and increase sales. Sales representatives market their company's products to manufacturers, wholesale and retail establishments, government agencies, and other institutions. (Retail salespersons, who sell directly to consumers, are discussed elsewhere in the Handbook.) Depending on where they work, sales representatives have different job titles. Those employed directly by a manufacturer or wholesaler usually are called sales representatives. Manufacturers' agents are self-employed sales workers who contract their services to all types of manufacturing companies. Those selling technical products, for both manufacturers and wholesalers, are usually called industrial sales workers or sales engineers. However, many of these titles are used interchangeably. Manufacturers' and wholesale sales representatives spend much of their time traveling to and visiting with prospective buyers and current clients. During a sales call, they discuss the customers' needs and suggest how their merchandise or services can meet those needs. They may show samples or catalogs that describe items their company stocks and inform customers about prices, availability, and how their products can save money and improve productivity. A vast number of manufacturers and wholesalers sell similar products, thus sales representatives must emphasize any unique qualities of their products and services. As independent agents, they might sell several complementary products made by different manufacturers and thus take an overall systems approach to their customer's business. Sales representatives may help install new equipment and train employees. They also take orders and resolve any problems or complaints with the merchandise. Sales engineers are among the most highly trained sales workers. They usually sell products whose installation and optimal use requires a great deal of technical expertise and support-products such as material handling equipment, numerical-control machinery, and computer systems. Additionally, they provide information on their firm's products, help prospective and current buyers with technical problems, recommend improved materials and machinery for a firm's manufacturing process, design plans of proposed machinery layouts, estimate cost savings, and suggest training schedules for employees. In a process that may take several months, they present this information and negotiate the sale. Aided by a laptop computer connected to the Internet, they can often answer technical and nontechnical questions immediately. Frequently, sales representatives who lack technical expertise work as a team with a technical expert. In this arrangement, the technical expert will attend the sales presentation to explain the product and answer questions or concerns. The sales representative makes the preliminary contact with customers, introduces the company's product, and closes the sale. The representative is then able to spend more time maintaining and soliciting accounts and less time acquiring technical knowledge. After the sale, representatives may make follow-up visits to ensure the equipment is functioning properly and may even help train customers' employees to operate and maintain new equipment. Those selling consumer goods often suggest how and where merchandise should be displayed. Working with retailers, they may help arrange promotional programs, store displays, and advertising. Obtaining new accounts is an important part of the job. Sales representatives follow leads from other clients, track advertisements in trade journals, participate in trade shows and conferences, and may visit potential clients unannounced. In addition, they may spend time meeting with and entertaining prospective clients during evenings and weekends. Sales representatives have several duties beyond selling products. They also analyze sales statistics; prepare reports; and handle administrative duties, such as filing their expense account reports, scheduling appointments, and making travel plans. They study literature about new and existing products and monitor the sales, prices, and products of their competitors. Manufacturers' agents who operate a sales agency must also manage their business. This requires organizational skills as well as knowledge of accounting, marketing, and administration. Working Conditions Some manufacturers' and wholesale sales representatives have large territories and travel considerably. A sales region may cover several States, and so they may be away from home for several days or weeks at a time. Others work near their "home base" and travel mostly by automobile. Due to the nature of the work and the amount of travel, sales representatives typically work more than 40 hours per week. Although the hours are long and often irregular, most sales representatives have the freedom to determine their own schedule. Consequently, they can arrange their appointments so they can have time off when they want it. Dealing with different types of people can be demanding but stimulating. Sales representatives often face competition from representatives of other companies as well as from fellow workers. Companies usually set goals or quotas that representatives are expected to meet. Since their earnings depend on commissions, manufacturers' agents are also under the added pressure to maintain and expand their clientele. Employment Manufacturers' and wholesale sales representatives held about 1.5 million jobs in 1998. Three of every 4 salaried representatives worked in wholesale trade-mostly for distributors of machinery and equipment, groceries and related products, and motor vehicles and parts. Others were employed in manufacturing and mining. Due to the diversity of products and services sold, employment opportunities are available in every part of the country in all kinds of industries. In addition to those working directly for a firm, many sales representatives are self-employed manufacturers' agents. They often form small sales firms and work for a straight commission based on the value of their own sales. However, manufacturers' agents usually gain experience and recognition with a manufacturer or wholesaler before becoming self-employed. Training, Other Qualifications, and Advancement The background needed for sales jobs varies by product line and market. The number of college graduates has increased and the job requirements have become more technical and analytical. Most firms now emphasize a strong educational background. Nevertheless, many employers still hire individuals with previous sales experience who do not have a college degree. For some consumer products, other factors such as sales ability, personality, and familiarity with brands are as important as a degree. On the other hand, firms selling industrial products often require a degree in science or engineering in addition to some sales experience. In general, companies are looking for the best and brightest individuals who have the personality and desire to sell. Many companies have formal training programs for beginning sales representatives lasting up to two years. However, most businesses are accelerating these programs to reduce costs and expedite the returns from training. In some programs, trainees rotate among jobs in plants and offices to learn all phases of production, installation, and distribution of the product. In others, trainees take formal classroom instruction at the plant, followed by on-the-job training under the supervision of a field sales manager. Some sales representatives complete certification courses to become Certified Professional Manufacturers' Representatives (CPMRS). New workers may be trained by accompanying experienced workers on their sales calls. As they gain familiarity with the firm's products and clients, these workers are given increasing responsibility until they are eventually assigned their own territory. As businesses experience greater competition, increased pressure is placed upon sales representatives to produce faster. These workers stay abreast of new merchandise and the changing needs of their customers in a variety of ways. They attend trade shows where new products and technologies are showcased. They also attend conferences and conventions to meet other sales representatives and clients and discuss new product developments. In addition, the entire sales force may participate in company-sponsored meetings to review sales performance, product development, sales goals, and profitability. Those who want to become manufacturers' and wholesale sales representatives should be goal-oriented, persuasive, and work well both independently and as part of a team. A pleasant personality and appearance, the ability to communicate well with people and problem-solving skills are highly valued. Furthermore, completing a sale can take several months and thus requires patience and perseverance. These workers are on their feet for long periods and may carry heavy sample cases, which necessitates some physical stamina. They should also enjoy traveling. Sales representatives spend much of their time visiting current and prospective clients. Frequently, promotion takes the form of an assignment to a larger account or territory where commissions are likely to be greater. Experienced sales representatives may move into jobs as sales trainers, who instruct new employees on selling techniques and company policies and procedures. Those who have good sales records and leadership ability may advance to sales supervisor or district manager. In addition to advancement opportunities within a firm, some manufacturers' agents go into business for themselves. Others find opportunities in purchasing, advertising, or marketing research. Job Outlook Overall, employment of manufacturers' and wholesale sales representatives is expected to grow more slowly than the average for all occupations through the year 2008. Continued growth due to the increasing variety and number of goods to be sold will be tempered by the increased effectiveness and efficiency of sales workers. Many job openings will result from the need to replace workers who transfer to other occupations or leave the labor force. Prospective customers will still require sales workers to demonstrate or illustrate the particulars about the good or service. However, technology is expected to make them more effective and productive, for example, by providing accurate and current information to customers during sales presentations. Within manufacturing, job opportunities for manufacturers' agents should be somewhat better than those for sales representatives. Manufacturers are expected to continue outsourcing sales duties to manufacturers' agents rather than using in-house or direct selling personnel. To their advantage, these agents are more likely to work in a sales area or territory longer than representatives, creating a better working relationship and understanding how customers operate their businesses. Also, by using agents who usually lend their services to more than one company, companies can share costs with the other companies involved with that agent. Those interested in this occupation should keep in mind that direct selling opportunities in manufacturing are likely to be best for products with strong demand. Furthermore, jobs will be most plentiful in small wholesale and manufacturing firms because a growing number of these companies will rely on wholesalers' and manufacturers' agents to market their products as a way to control their costs and expand their customer base. Employment opportunities and earnings may fluctuate from year to year because sales are affected by changing economic conditions, legislative issues, and consumer preferences. Prospects will be best for those with the appropriate knowledge or technical expertise as well as the personal traits necessary for successful selling. Earnings Compensation methods vary significantly by the type of firm and product sold. Most employers use a combination of salary and commission or salary plus bonus. Commissions are usually based on the amount of sales, whereas bonuses may depend on individual performance, on the performance of all sales workers in the group or district, or on the company's performance. Median annual earnings of sales representatives, except retail, were $36,540, including commission, in 1998. The middle 50 percent In addition to their earnings, sales representatives and engineers are usually reimbursed for expenses such as transportation costs, meals, hotels, and entertaining customers. They often receive benefits such as health and life insurance, pension plan, vacation and sick leave, personal use of a company car, and frequent flyer mileage. Some companies offer incentives such as free vacation trips or gifts for outstanding sales workers. Unlike those working directly for a manufacturer or wholesaler, manufacturers' agents are paid strictly on commission. Depending on the type of product or products they are selling, their experience in the field, and the number of clients, their earnings can be significantly higher or lower than those working in direct sales. In addition, selfemployed manufacturers' agents must pay their own travel, entertainment, and benefit expenses. Related Occupations Manufacturers' and wholesale sales representatives must have sales ability and knowledge of the products they sell. Other occupations that require similar skills are: advertising, marketing, and public relations managers; insurance sales agents; purchasing managers, buyers, and purchasing agents; real estate agents and brokers; securities, commodities, and financial services sales representatives; and services sales representatives. Sources of Additional Information Information on manufacturers' agents is available from: Sales and Marketing Executives International, 5500 Interstate North Real Estate Agents and Brokers (O*NET 43008) Significant Points Real estate sales positions should continue to be relatively easy to obtain due to the large number of people who leave this occupation each year. Real estate agents and brokers must be licensed in every State and in the District of Columbia. Nature of the Work The purchase or sale of a home or investment property is not only one of the most important financial events in peoples' lives, but also one of the most complex transactions. As a result, people usually seek the help of real estate agents and brokers when buying or selling real estate. Real estate agents and brokers have a thorough knowledge of the real estate market in their community. They know which neighborhoods will best fit clients' needs and budgets. They are familiar with local zoning and tax laws, and know where to obtain financing. Agents and brokers also act as an intermediary in price negotiations between buyers and sellers. Real estate agents are usually independent sales workers who provide their services to a licensed broker on a contract basis. In return, the broker pays the agent a portion of the commission earned from the agent's sale of the property. Brokers are independent business people who, for a fee, sell real estate owned by others; they also may rent and manage properties for a fee. When selling real estate, brokers arrange for title searches and for meetings between buyers and sellers where details of the transactions are agreed upon and the new owners take possession. A broker's knowledge, resourcefulness, and creativity in arranging favorable financing for the prospective buyer often mean the difference between success and failure in closing a sale. In some cases, brokers and agents assume primary responsibility for closing sales; in others, lawyers or lenders do this. Brokers supervise agents who may have many of the same job duties. Brokers also manage their own offices, advertise properties, and handle other business matters. Some combine other types of work, such as selling insurance or practicing law, with their real estate business. There is more to an agent or broker's job than just making sales. They must have properties to sell. Consequently, they spend a significant amount of time obtaining listings-owner agreements to place properties for sale with the firm. When listing a property for sale, agents and brokers compare the listed property with similar properties that have recently sold to determine its competitive market price. Once the property is sold, the agent who sold the property and the agent who obtained the listing both receive a portion of the commission. Thus, agents who sell a property they also listed can increase their commission. Most real estate agents and brokers sell residential property. A small number, usually employed in large or specialized firms, sell commercial, industrial, agricultural, or other types of real estate. Every specialty requires knowledge of that particular type of property and clientele. Selling or leasing business property requires an understanding of leasing practices, business trends, and location needs. Agents who sell or lease industrial properties must know about the region's transportation, utilities, and labor supply. Whatever the type of property, the agent or broker must know how to meet the client's particular requirements. Before showing residential properties to potential buyers, agents meet with buyers to get a feeling for the type of home the buyers would like. In this prequalifying phase, the agent determines how much buyers can afford to spend. In addition, they usually sign a loyalty contract which states the agent will be the only one to show them houses. An agent or broker uses a computer to generate lists of properties for sale, their location and description, and available sources of financing. In some cases, agents and brokers use computers to give buyers a virtual tour of properties in which they are interested. Buyers can view interior and exterior images or floor plans without leaving the real estate office. Agents may meet several times with prospective buyers to discuss and visit available properties. Agents identify and emphasize the most pertinent selling points. To a young family looking for a house, they may emphasize the convenient floor plan, the area's low crime rate, and the proximity to schools and shopping centers. To a potential investor, they may point out the tax advantages of owning a rental property and the ease of finding a renter. If bargaining over price becomes necessary, agents must carefully follow their client's instructions and may have to present counteroffers in order to get the best possible price. Once both parties have signed the contract, the real estate broker or agent must see to it that all special terms of the contract are met before the closing date. For example, if the seller agrees to a home inspection or a termite and radon inspection, the agent must make sure this is done. Also, if the seller agrees to any repairs, the broker or agent must see they are made. Increasingly, brokers and agents handle environmental problems by making sure the properties they sell meet environmental regulations. For example, they may be responsible for dealing with problems such as lead paint on the walls. While loan officers, attorneys, or other persons handle many details, the agent must check to make sure that they are completed. Working Conditions Increasingly, real estate agents and brokers work out of their homes instead of real estate offices because of advances in telecommunications and the ability to retrieve data on properties over the Internet. Even with this convenience, much of their time is spent away from their desk-showing properties to customers, analyzing properties for sale, meeting with prospective clients, or researching the state of the market. Agents and brokers often work more than a standard 40-hour week; nearly 1 out of every 4 worked 50 hours or more a week in 1998. They often work evenings and weekends, and are always on call to suit the needs of clients. Business is usually slower during the winter season. Although the hours are long and often irregular, most agents and brokers also have the freedom to determine their own schedule. Consequently, they can arrange their work so they can have time off when they want it. Employment Real estate agents and brokers held about 347,000 jobs in 1998. Many worked part time, combining their real estate activities with other careers. More than two-thirds of real estate agents and brokers were self-employed. Real estate is sold in all areas, but employment is concentrated in large urban areas and in smaller, but rapidly growing communities. Most real estate firms are relatively small; indeed, some are a oneperson business. Some large real estate firms have several hundred agents operating out of many branch offices. Many brokers have franchise agreements with national or regional real estate organizations. Under this type of arrangement, the broker pays a fee in exchange for the privilege of using the more widely known name of the parent organization. Although franchised brokers often receive help training salespeople and running their offices, they bear the ultimate responsibility for the success or failure of their firm. Real estate agents and brokers are older, on average, than most other workers. Historically, many homemakers and retired persons were attracted to real estate sales by the flexible and part time work schedules characteristic of this field. They could enter, leave, and later reenter the occupation, depending on the strength of the real estate market, family responsibilities, or other personal circumstances. Recently, however, the attractiveness of part time work has declined, as increasingly complex legal and technological requirements raise startup costs associated with becoming an agent. Training, Other Qualifications, and Advancement In every State and in the District of Columbia, real estate agents and brokers must be licensed. Prospective agents must be a high school graduate, at least 18 years old, and pass a written test. The examination-more comprehensive for brokers than for agents-includes questions on basic real estate transactions and laws affecting the sale of property. Most States require candidates for the general sales license to complete between 30 and 90 hours of classroom instruction. Those seeking a broker's license need between 60 and 90 hours of formal training and a specific amount of experience selling real estate, usually one to three years. Some States waive the experience requirements for the broker's license for applicants who have a bachelor's degree in real estate. State licenses typically must be renewed every one or two years, usually without reexamination. However, many States require continuing education for license renewal. Prospective agents and brokers should contact the real estate licensing commission of the State in which they wish to work to verify exact licensing requirements. As real estate transactions have become more legally complex, many firms have turned to college graduates to fill positions. A large number of agents and brokers have some college training. College courses in real estate, finance, business administration, statistics, economics, law, and English are helpful. For those who intend to start their own company, business courses such as marketing and accounting are as important as those in real estate or finance. Personality traits are equally as important as academic background. Brokers look for applicants who possess a pleasant personality, honesty, and a neat appearance. Maturity, tact, trust-worthiness, and enthusiasm for the job are required in order to motivate prospective customers in this highly competitive field. Agents should also be well organized, detail oriented, and have a good memory for names, faces, and business details. Those interested in jobs as real estate agents often begin in their own communities. Their knowledge of local neighborhoods is a clear advantage. Under the direction of an experienced agent, beginners learn the practical aspects of the job, including the use of computers to locate or list available properties and identify sources of financing. Many firms offer formal training programs for both beginners and experienced agents. Larger firms usually offer more extensive programs for both beginners and experienced agents. Larger firms usually offer more extensive programs than smaller firms do. Over 1,000 universities, colleges, and junior colleges offer courses in real estate. At some, a student can earn an associate or bachelor's degree with a major in real estate; several offer advanced degrees. Many local real estate associations that are members of the National Association of Realtors sponsor courses covering the fundamentals and legal aspects of the field. Advanced courses in mortgage financing, property development and management, and other subjects are also available through various affiliates of the National Association of Realtors. Advancement opportunities for agents may take the form of higher commission rates. As agents gain knowledge and expertise, they become more efficient in closing a greater number of transactions and increase their earnings. Experienced agents can advance in many large firms to sales or general manager. Persons who have received their broker's license may open their own offices. Others with experience and training in estimating property value may become real estate appraisers, and people familiar with operating and maintaining rental properties may become property managers. (See the statement on property, real estate, and community association managers elsewhere in the Handbook). Experienced agents and brokers with a thorough knowledge of business conditions and property values in their localities may enter mortgage financing or real estate investment counseling. Job Outlook Employment of real estate agents and brokers is expected to grow about as fast as the average for all occupations through the year 2008. However, a large number of job openings will arise due to replacement needs. Each year, thousands of jobs will become available as workers transfer to other occupations or leave the labor force. Not everyone is successful in this highly competitive field; many beginners become discouraged by their inability to get listings and to close a sufficient number of sales. Well-trained, ambitious people who enjoy selling should have the best chance for success. Increasing use of electronic information technology will increase the productivity of agents and brokers as computers, faxes, modems, and databases become commonplace. Some real estate companies use computer-generated images to show houses to customers without leaving the office. Internet sites contain information on vast numbers of homes for sale, available to anyone. These devices enable an agent to serve a greater number of customers. Use of this technology may eliminate some marginal agents such as those practicing real estate part time or between jobs. These workers will not be able to compete as easily with full time agents who have invested in this technology. Changing legal requirements, like disclosure laws, may also dissuade some that are not serious about practicing full time from continuing to work part time. Another factor expected to impact the need for agents and brokers is the ability of prospective customers to conduct their own searches for properties that meet their criteria by accessing real estate information on the Internet. While they won't be able to conduct the entire real estate transaction on-line, it does allow the prospective buyer the convenience of making a more informed choice of properties to visit, as well as the ability to find out about financing, inspections, and appraisals. Employment growth in this field will stem primarily from increased demand for home purchases and rental units. Shifts in the age distribution of the population over the next decade will result in a growing number of persons in the prime working ages with careers and family responsibilities. This is the most geographically mobile group in our society, and the one that traditionally makes most of the home purchases. As their incomes rise, they also may be expected to invest in additional real estate. Employment of real estate agents and brokers is very sensitive to swings in the economy. During periods of declining economic activity and tight credit, the volume of sales and the resulting demand for sales workers falls. During these periods, the earnings of agents and brokers decline, and many work fewer hours or leave the occupation altogether. |