Post by kostgard on Jul 18, 2014 3:01:22 GMT -4
This was driving me nuts, so I dug around and I think I figured it out.
I doubt the mob guy did stuff for Red for free. They weren't friends, so why take the risk for free? I think Red primarily operated in cash - people have their family/friends on the outside get the cash to Red (apparently Paypal is very popular for this sort of thing), Red overcharges for stuff because she can ($10 for a $5 pair of pantyhose, say), her outside person (probably her son) buys the goods, they pocket the rest - after mob guy gets his cut, of course. Pornstache must have had a similar system (Tricia said something about her cousin paying him for the drugs). I think in season two Red operated the same way, and just cut out the middle man with her son being the sole outside man.
The stamps took longer to figure out, but I think I got it. Apparently the cigarette biz is HUGE in prisons and people can and do charge something like $20 per cigarette (again, because they can). And I learned that Vee was really stupid to get into heroin - the demand isn't as high as for cigs, and if you get caught with cigs, the punishment is relatively minor. Not true with heroin. So anyway, stamps are currency on the inside and you can charge a ridiculous amount of stamps for one smoke, like $20 worth of stamps. So, let's say you smuggle in one pack of cigs, that's 20 cigs, $20 each, totaling $400 in stamps you can earn. Minus about $5 for the pack and say your man on the outside takes 30%, you still make over $200 off one pack of cigarettes. Problem is, that money is in the form of stamps. Who the hell buys the stamps?
Well, you can go to a convenience store or one of those "mailbox" stores - the postal service can't control any mark up on stamps and a lot of these places do mark up stamps in "convenience fees" or whatever. So your man on the outside can offer the stamps to them at cost (you've already made your profit), or hell, knock 10% off the price. They buy them from you and make their own profit from their markup. Even if you sell the stamps below cost, your profit margin on the cigarettes is so huge it doesn't matter. You still walk away with a tidy profit. Apparently there are prisoners who have made hundreds of thousands of dollars doing this, and were able to support their families this way.
True, stamps are considered legal tender, but good luck trying to pay your rent with piles of stamps. Better to sell them to someone who will turn around and sell them as part of their regular business.
I doubt the mob guy did stuff for Red for free. They weren't friends, so why take the risk for free? I think Red primarily operated in cash - people have their family/friends on the outside get the cash to Red (apparently Paypal is very popular for this sort of thing), Red overcharges for stuff because she can ($10 for a $5 pair of pantyhose, say), her outside person (probably her son) buys the goods, they pocket the rest - after mob guy gets his cut, of course. Pornstache must have had a similar system (Tricia said something about her cousin paying him for the drugs). I think in season two Red operated the same way, and just cut out the middle man with her son being the sole outside man.
The stamps took longer to figure out, but I think I got it. Apparently the cigarette biz is HUGE in prisons and people can and do charge something like $20 per cigarette (again, because they can). And I learned that Vee was really stupid to get into heroin - the demand isn't as high as for cigs, and if you get caught with cigs, the punishment is relatively minor. Not true with heroin. So anyway, stamps are currency on the inside and you can charge a ridiculous amount of stamps for one smoke, like $20 worth of stamps. So, let's say you smuggle in one pack of cigs, that's 20 cigs, $20 each, totaling $400 in stamps you can earn. Minus about $5 for the pack and say your man on the outside takes 30%, you still make over $200 off one pack of cigarettes. Problem is, that money is in the form of stamps. Who the hell buys the stamps?
Well, you can go to a convenience store or one of those "mailbox" stores - the postal service can't control any mark up on stamps and a lot of these places do mark up stamps in "convenience fees" or whatever. So your man on the outside can offer the stamps to them at cost (you've already made your profit), or hell, knock 10% off the price. They buy them from you and make their own profit from their markup. Even if you sell the stamps below cost, your profit margin on the cigarettes is so huge it doesn't matter. You still walk away with a tidy profit. Apparently there are prisoners who have made hundreds of thousands of dollars doing this, and were able to support their families this way.
True, stamps are considered legal tender, but good luck trying to pay your rent with piles of stamps. Better to sell them to someone who will turn around and sell them as part of their regular business.