The internet makes our lives much easier, but for some professions, it poses a serious threat. For example, consider this article from The Wall Street Journal about how the internet is disruption the traditional role of car salesmen, and is this changing the nature of that job.
The underlying theme is that people have access to so much information online, that there really is no need for car salesmen to do any selling at all. In most cases, by the time a potential car buyer walks onto a car lot, he or she already knows what they are going to buy, how much they are going to spend, and have the documentation in their hand to make that happen.
Compare that shopping experience to that of buying a car in the past. In the past, people walked onto car without knowing everything there was to know about what options were available and what every dealer within 100 miles was charging for the exact car they wanted to buy. They had questions, and the car salesman had the answers. Depending on how well the salesman answered their questions, and how good a salesperson he or she was, they could make a big commission selling a nice shiny new car.
Those days are gone. Many dealerships have eliminated commissions from the equation, and instituted a "no haggle" pricing policy. They understand that shoppers no longer need the hard sell. A majority of car buyers are already sold before they ever walk onto a car lot, it’s just a matter of getting the papers filled out and sending them on their way.
Car salesman no longer have to sell, they simply have to be able to handle the transaction.
The same sort of scenario is playing out in other professions as well. Two that jump to mind are travel agents and real estate brokers.
It is hard to remember the days before travel sites like PricelineLine (PCLN) and Expedia (EXPE) were around. Before the internet, if you wanted to book a vacation you had two choices. Either do the homework yourself by calling airlines and hotel chains, or booking your vacation through a travel agent.
Agents got a commission on the vacations they booked, so of course they would try to put you up in the nicest hotels, or book you on the most expensive cruise you could afford.
Those days are gone too. There are still travel agencies, but the need for their services is greatly diminished.
If you want to book a vacation now, you have literally hundreds of different internet sites to choose from, all of which are competing for your business. As someone who frequently travels, I have used a wide range of these sites, and for the most part they all offer the same options, at roughly the same cost, give or take a few dollars here and there.
Sometimes it can be a daunting process, but with a little time and patience, you can easily plan your entire family vacation without having to get off your couch or pick up a phone. When you do need some assistance, there is someone you can call, but like car salesman, they are not working on commission, and not trying to make sales. They are simply there to help you out with any questions or technical issues you may have.
Real estate agents face the same pressure. Once again, it all comes down to how easy it has become to do the job yourself. Sites like Zillow (Z) or Trulia have everything you need to find your next home.
Two years ago when I was shopping for my current home, I knew exactly what house I was going to buy before ever walking into a real estate office. I went in, told them the house I found on the internet, and they made it happen.
Of the three jobs, real estate agents are the safest, simply because there is a lot of fear regarding selling or buying a home with an agent, but even here there is change happening.
Real estate commissions are high, so people are definitely interested in working without the help of an agent when possible. There are a few reasons why I believe we will see more of this in the future, and real estate agents could be forced to restructure the way their business works as people rely on them less and less.
For one, real estate commissions are high. If you can simply take them out of the equation, you cannot only put more money in your pocket, but you can do so while lowering your selling price. This will help you sell quicker, and move on to the next project.
There are a variety of sites already running that help homeowners navigate the process of selling their homes themselves, and I think in the future they will gain in popularity. The math is just too compelling to believe otherwise.
One such site is ForSaleByOwner. The site has all the tools that you would need to do the entire process without an agent. A quick search of my zip code shows that 73 homes are currently for sale by owner in my immediate area, so there is definitely interest out there in going it alone.
FSBO.com is another resource that you can use with all the tools you will need to list and market your property. Additionally, there is a section where you can find inspectors, accountants, attorneys and etc.
These are just three examples. The internet is a powerful tool for consumers, and now that the power has shifted into the hands of the consumer, commission- based sales jobs are a dying breed.
Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.