Sixteen Years Old, $1.7 Million in Revenue: Max Hits It Big as a Pandemic Reseller

There is lots of money to be made in unethical and shameful things like scalping.

What else is new?

Let's not praise this little child asshole. He deserves to be shamed instead.

(not that I really care about consoles at all, but still)
 
If those number are true:
Max ended last year with a profit of more than $110,000 on $1.7 million in revenue,

And not lie for the IRS, that would show a lot of work on is part at least, 6.5% margin before tax when you do not have employee or much expense is not a lot. Edit: after going around the paywall he had lot of expense.
 
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ashmelev75 said:
Taking bets on whether he forgot to pay taxes on that 1.7 million revenue and spent it all on some stupid shit.
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Is there any state that tax revenues ? If he say on a journal article that he made 110K in profit that probably what was declared if needed.
 
LukeTbk said:
Is there any state that tax revenues ? If he say on a journal article that he made 110K in profit that probably what was declared if needed.
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Depends if he filed taxes as personal income tax, then every thing is taxable. You can make a standardized deduction sure, but there's no such thing as "profit" as an individual. He would have had to file as a small business then he could differentiate between profit and revenue.

Still wonder what the details are, while yeah he made $110k in profit it boggles my mind that he had $1.7M in revenue, that's only 6.4%. If he sold everything for twice what he paid, his profit should be closer to 850k (pre-tax).

Either way, fuck him, he's part of the problem, of making a further class divide only those who are willing to pay twice the actual retail value should get to have said video game systems.
 
sfsuphysics said:
Depends if he filed taxes as personal income tax, then every thing is taxable. You can make a standardized deduction sure, but there's no such thing as "profit" as an individual. He would have had to file as a small business then he could differentiate between profit and revenue.
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I feel it is almost certain, because yoiu would always loose money if you declare revenues has personal income (outside giant margin), like you said is margin are really low (or maybe he is sitting on a 350K+ of stock), which make me believe that is under a paying tax on profit system and making those lower than they are, with maybe a lot of cash buyer and that in reality is revenue are higher than those he said they are and profit much higher.
 
sfsuphysics said:
Depends if he filed taxes as personal income tax, then every thing is taxable. You can make a standardized deduction sure, but there's no such thing as "profit" as an individual. He would have had to file as a small business then he could differentiate between profit and revenue.
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Either way, there's potentially: income tax--both employer and employee halves, Medicare (same), state taxes, local taxes in some states, business license, corporate profits, blah blah blah.
 
Some high quality parenting. Get those kids in on the high end grifts early I say. /s

Seriously though what shit parents. When this kid blows through all his monies at 25.... I am sure he will find the next best probably not so legal scam. Pat your kid on the head he'll be locked up by 30.... if they're lucky he can turn it into a movie when he's 40 and get rich again.
 
ChadD said:
Some high quality parenting. Get those kids in on the high end grifts early I say. /s

Seriously though what shit parents. When this kid blows through all his monies at 25.... I am sure he will find the next best probably not so legal scam. Pat your kid on the head he'll be locked up by 30.... if they're lucky he can turn it into a movie when he's 40 and get rich again.
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Get real, the kid is in high school and understands:

Working capital
Payment terms
P&L, balance sheet, and GAAP
Margins
Time value of money
Opportunity cost
Inventory management
Quickbooks
Forecasting and projections
E-commerce
Rudimentary employment law and management/HR concerns (he employs 2 employees)

Etc, etc, etc, etc. The kid made about triple the salary of his high school teachers (who teach a fuckload of less useful things than the above, like Latin and cursive). If it was my kid I'd tell him he could drop out if he wants and I'd fund a startup for him based on his hustle alone. There is absolutely zero doubt he learned more about the real world and business doing this than he did in school.
 
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Never understood the targeted hate for sellers of non-essential items during peak demand...it's the buyers that choose to open their wallets for such prices that give these sellers such profits.

For those buyers with pockets deep enough: more power to ya! Your money, your choice.
 
sleepeeg3 said:
I've made money reselling during the pandemic - not on computer goods. I sacrificed my time to move goods from multiple platforms to one platform to help people more easily find those goods.
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That can happen, say making Alibaba stuff seen and on a platform customer are more use to in the USA.

But a lot of scalping during the pandemic took stuff where it was extremely easy for people to find and get shipped to them like bestbuy.com, newegg or amazon to platform where it is harder and less convenient a la ebay and other marketplace of the sort.

Scalping already in demand on already popular platform is different than creating actual value by matching customer to items (say you make a YouTube video with a link to amazon, to something the customer would have never went to look for on alibaba, versus you buy something on amd.com that would have been sold directly to a customer in the next 60s if the scalper would not have bought it just before).

Say for the xbox and gpu, they provided has a service is to move good from multiple place to people willing to spend more money to game or do something else with them that is more valuable here, not really helping people finding. (if the items where running scarce that an indicator that customer had no issue finding them)
 
let's say he was only flipping consoles, to generate $1.7 million in revenue, he would have to sell 1700 consoles at $1000 each. that is acquiring and flipping nearly 5 consoles every single day.
and that would net a profit of at least $680,000 (let's say $400/console in profit).

Also, $1.7 million is $4600+ every single day for the entire year.
 
When I was his age, you'd make that kind of money buying stuff with rebates to resell near retail and hope the rebates came through.
 
Props to him, I wish I was that enterprising at 16. I honestly don't have an issue with scalpers (I even bought my GPU on eBay).

I mean, I don't like the situation, but I'm not going to blame some kid just trying to make a few extra bucks.

In any case, how did he only net $110k? That doesn't make any sense with the prices as they are.
 
sleepeeg3 said:
Unless you work for free, you're out of line.
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when I work I do work for free ... I'm retired

also, your logic is quite faulty and you might need some counseling to get rid of that Lefty syndrome ... it destroys both brain and soul. I'm an Independent so I wind up reading what's posted by both the Right and the Left and can now say you're both out of your right minds half the time.
 
I call bs or at least a lot more to the story then that. That's an insane amount of goods to be moving....like warehouses full it's cheep goods or pallets and pallets of Xboxes ect...also that profit margin sounds very low and I think it's more likely something shady is going on
 
LukeTbk said:
Is there any state that tax revenues ? If he say on a journal article that he made 110K in profit that probably what was declared if needed.
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Yes, it's called Sales Tax. 45 out of 50 states have Sales Tax.

He had better have kept records and collected and remitted sales tax for those sales, else the kid is screwed. If he sold over state lines, he has the potential of having up to 45 state comptrollers and the armies of lawyers behind them coming for him. But with the WSJ saying they looked at his books, he's probably doing things well enough to not get the ire of the comptroller.

You can go for years without filing tax returns with the IRS, but if the comptroller gets wind of you not remitting taxes on sales you made, you better have a boatload of cash on hand, else things are going to start disappearing real quick. If you can't pay, they'll take whatever is deemed of equivalent value listed as property by the business. If you're doing business as yourself, god help you.

1.7 million dollars of sales tax in NJ would be $112,625. If he sold over state lines, that number is going to be higher due to the varying tax rates from state to state.
 
$110,000 profit on $1.7 million in revenue? Realistically, his only expenses are the cost of goods sold and shipping. It doesn't seem like he's really doing that well of a business. It's probably more just that he's 16 and has $1.7 million in revenue that's the story. He's only at a 6.47% profit margin. You can barely call that scalping.
 
I can't hate on the kid. Hope he's smart with the money he made. I am surprised he only made $100k tho. He probably made a lot more to then he claims to avoid paying the tax man a bigger cut. You know they are going to go after him cause of this story now.
 
sfsuphysics said:
Depends if he filed taxes as personal income tax, then every thing is taxable. You can make a standardized deduction sure, but there's no such thing as "profit" as an individual. He would have had to file as a small business then he could differentiate between profit and revenue.

Still wonder what the details are, while yeah he made $110k in profit it boggles my mind that he had $1.7M in revenue, that's only 6.4%. If he sold everything for twice what he paid, his profit should be closer to 850k (pre-tax).

Either way, fuck him, he's part of the problem, of making a further class divide only those who are willing to pay twice the actual retail value should get to have said video game systems.
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By your own admission he only made 6.4% profit. How is he furthering a class divide when his actual profit margin is closer to a relatively cheap finders fee.

Quite frankly, for only 6.47%, he's stupid for taking on that kind of liability for such little profit.
 
UltraTaco said:
Agreed.

Taco is nt sure why scalping is now considered 'legitimate' business, praised nd defended by many?
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But all companies scalp... Let's take a piece of furniture, a couch for instance. You go down to your local big box and want to buy a couch. A decent couch could run you over a grand, but that company you are buying it from probably paid less than half of that. How is that not scalping?

It is. People have just become conditioned to accept it if it's a company doing it, but it's a bad thing if it's an individual.
 
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kirbyrj said:
$110,000 profit on $1.7 million in revenue? Realistically, his only expenses are the cost of goods sold and shipping. It doesn't seem like he's really doing that well of a business. It's probably more just that he's 16 and has $1.7 million in revenue that's the story. He's only at a 6.47% profit margin. You can barely call that scalping.
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You are putting a lot of faith into people understanding tehnical terms, and not just getting emotional outraged.
 
auntjemima said:
But all companies scalp... Let's take a piece of furniture, a couch for instance. You go down to your local big box and want to buy a couch. A decent couch could run you over a grand, but that company you are buying it from probably paid less than half of that. How is that not scalping?

It is. People have just become conditioned to accept it if it's a company doing it, but it's a bad thing if it's an individual.
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We were promised trickle down economics. Now we see what has actually trickled down.
 
paradoxical said:
Get real, the kid is in high school and understands:

Working capital
Payment terms
P&L, balance sheet, and GAAP
Margins
Time value of money
Opportunity cost
Inventory management
Quickbooks
Forecasting and projections
E-commerce
Rudimentary employment law and management/HR concerns (he employs 2 employees)

Etc, etc, etc, etc. The kid made about triple the salary of his high school teachers (who teach a fuckload of less useful things than the above, like Latin and cursive). If it was my kid I'd tell him he could drop out if he wants and I'd fund a startup for him based on his hustle alone. There is absolutely zero doubt he learned more about the real world and business doing this than he did in school.
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What are you, 80? Latin and cursive? Lol. This post is the embodiment of a large portion of our problems in the US of A. When teaching the next generations is looked at less favorably and with less value than some zero value add “business” and business for the sake of business is worth more than an education … yeah, there are some fundamental structural and cultural problems.
 
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