Our economic system depends on selling because it keeps our economy moving, promotes competition, affects employment, adds utility, helps customers determine needs, and creates desire for products. Let’s take a closer look at these effects of selling.

Keeps our economy moving. As shown in the diagram, businesses buy resources (natural, human, and capital goods) to be used in the production of goods and services. Then, they sell the goods and services to the market that wants them. That market could include manufacturers, wholesalers, and retailers, along with individuals and households. Individuals sell their resources to businesses to help in the production of goods and services. If individuals and businesses did not do this, there would be no economic flow. Selling keeps our economy moving by enabling us to move the products that come from our factories and farms to the people and businesses that will use them.

Promotes competition. Customers only have so much money, and it’s up to them to decide where to spend it. That’s why all businesses have to compete to earn those dollars, and businesses that sell the most products that satisfy customer needs at the best prices will succeed. This puts pressure on the competition to produce better products. Businesses continue to develop new or improved products to make more sales than their competitors.
Affects employment. Salespeople aren’t the only ones whose jobs depend on making sales. As businesses grow, they hire not just more salespeople but also other employees to keep up with the demand for their products. For example, Starbucks Coffee opened as a one-store operation in 1971. As sales increased, the company hired more salespeople, opened new stores, and hired people to manage and operate those stores.

In addition, other manufacturers and wholesalers have benefited from the growth of Starbucks. The stores must purchase sugar, cream, paper cups, napkins, straws, and more to accompany the coffee. To open a new store, building materials, tables, chairs, coffee-brewing equipment, and refrigerators must be purchased from manufacturers and wholesalers as well. Today, there are over 24,000 Starbucks stores in more than 75 countries. The company also offers many bottled versions of its coffee drinks as well as ice creams and instant coffees. If the business continues to grow, so will the number of its employees and the number of employees at associated manufacturers and wholesalers.

As you can see from the above example, the exchanges created by selling help businesses make a profit that enables the companies to expand. On the other hand, if Starbucks Coffee’s sales decline, so will the number of people that the business employs. And if sales continue to decline for a steady period of time, it will begin to affect manufacturers and wholesalers as well.

Adds utility. Selling adds utility, or usefulness, to products. Through selling, products can be “in the right place at the right time.” Skilled salespeople aid in developing utility for their products by creating customer desire. They may attempt to sell not only a suit but also the accessories to go with it, for instance. They may have the customer try on a shirt and tie that match the suit—while pointing out the features and benefits of buying all three.
Helps customers determine needs. By providing opportunities for two-way communication between customers and salespeople, selling enables customers to receive help with their buying problems. In this way, customers can determine their needs and can select products that are right for them. For an example, view the customized options offered to commercial building clients in the “Butler Building Structural System” video by Butler Buildings: Butler Building Structural System.
Creates desire for products. Skilled salespeople can create desire for new or established products. They do this by determining clients’ needs, wants, and buying motives. Then, salespeople explain product features and benefits to clients and heighten their desire through the use of demonstrations. For example, if you know a business is looking for a software program that will help its accounting department manage data and save time, you could talk about how your company’s easy-to-use software will make the accounting staff’s lives easier. Since you understand the company’s buying motives, you would be sure to focus on the time-saving features of your product in your sales presentation.

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