Thursday, November 16, 2006
Entrepeneur of the Year
Can you spot the error in this business plan?
Let's chew on the math a little. There were at least 6 homeless guys (could be more, but 6 was the highest number I could see at any time). At $100 + food (let's say $10) each per day, for at least two days, That's $1320. The store only has 8 PS3s, with at least three people ahead of them in line (in some shots it looks like there could even be four or five of them), so the maximum number of consoles they can get is 5. If the Japanese launch is any indicator, resellers were having a hard time selling them at any more than a 50% markup because the market was absolutely flooded with scalpers.
5 x (600/2) = $1500 - $1320 = $180
Minus costs, he's not going to make anymore than a few hundred dollars. And this is pretty much best case scenario. If he's got even one more homeless guy I didn't count, or there's one more person ahead of them in line, he's losing money with this scheme. That's also assuming he didn't pay to rent the U-Haul, which would probably put him deep into the red.
Abdul Salem, the man who exploited the homeless and still couldn't make a profit.