People always say mattress stores are shady and used for money laundering. Not totally sure I understand exactly what money laundering is. How would this occur at a mattress store?
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Look at them the same as funeral homes. Margin and profits are so high, they can afford to go a few days without business.
[The Planet Money podcast did a good episode on why there are so many mattress stores.](https://www.npr.org/sections/money/2018/12/13/676538506/why-are-there-so-many-mattress-stores) You may find it enlightening.
One of the best options for money laundering is actually providing a ‘service’ rather than selling a Good. Any Goods you sell have to be accounted for and traced back to supplier. Your Stock and Warehouse supply has to match your Sales. It also means you end up spending a lot on Stock to make it look like your a thriving business.
But if you provide a ‘service’ however…
For example, my friend provides a ‘Carpet Cleaning’ service. He has a Van as well as all the necessary equipment to do the job. In fact, he actually does the job legitimately on the side. He might clean 3 carpets a week. Nothing major. His main business is selling Cocaine however. But the Carpet Cleaning enables him to fake jobs and sales – without having to invest in stock, and because he is a Mobile Business – also less likely to be inspected by a Taxman sitting outside your store counting customers.
It’s also less obvious of a service such as Garden maintenance, or building work – because there is legitimately no way a Taxman can enter a random persons home and check their Carpets to see if they’ve been cleaned. It’s very difficult to prove if the business is generating more Cash than it actually is.
This is done with roadside car washes in the UK.. there’s like 5 of them round me.. so they have the legitimate car wash business that generates 5k a week.. but they actually post revenue of 20k per week.. and just fudge the books to say they washed way more cars than they actually did and that extra cash goes in the bank and is now laundered.. they just draw the money from the business.. they still have to pay the tax on the ill gotten gains but it’s almost 100% safe..
My parents sold mattresses for decades. I even worked for my parents at one point. They did not launder money or do anything illegal.
People are used to going to busy chain stores with very high volume sales (and low prices) and assume that a private business, with almost no foot traffic, can’t make a profit and must be a front for illegal activity. The reality is that the few customers who do make purchases spend enough to pay for the day’s expenses with some profit (usually). Some days, there will be zero customers so the business operated at a loss for that day. But the profit from other days makes up for these zero income days.
The reality for a lot of small retail businesses is that it’s really boring much of the time since it’s just time waiting for customers to come in. So if you were to take a snapshot randomly, the likelihood that you’ll see customers in the store is low. But when there are customers, they typically are there to buy something.
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