At the end of the year, yeah. But at the end of the first month, in order to be able to pay your salesman, he must have done 22 sales. By charging yearly, only

At the end of the year, yeah. But at the end of the first month, in order to be able to pay your salesman, he must have done 22 sales. By charging yearly, only 2 sales are needed. That's cash flow. So yeah, if he does his 22 sales / month, at the end of the first month, you're even, and starting from month #2, you're making money. Combine this with "It's easier to sell one time a $1000 product than 1000 times a $1 one" and you get the main idea.