Police found about 1,000 cell phones in the men's minivan. Authorities have not said what they believe the men intended to do with the phones, most of which were prepaid TracFones. But the police chief in Caro, Mich., where they were arrested, said cell phones can be used as detonators, and prosecutors in a similar case in Ohio have said that TracFones are often used by terrorists because they are not traceable. Odeh said the men were buying the phones to sell to a man in Dallas for a profit of about $5 per phone. She said they were in Michigan because so many people in the Dallas area are doing the same thing that the phones are often sold out.
This is not illegal, Actually I learned this from a Jewish dealer up in New York.
Ok people I'm gonna let you in on a cellphone business trade secret here. Most prepaid cellphone business depends on volume, the margin is low but with a large volume people make good money. Let's do the math; If I make $5 a phone then if I can sell 1000 phones that's $5000 in my pocket, mostly wholesale business. Walmart works on smaller margin while relying on high volume, Walmart makes it's own special deals with all their suppliers specially Wireless companies. Walmart would go to T-mobile and say I want to be able to make 10% profit only, so I want you to sell me this phone for $30.50 and in return Walmart sells it for $34.95 something. Well, all other dealers direct and indirect can not strike such a deal with T-Mobile because simply we can not match Walmart volume sales. So, if I want to buy that same phone (Nokia 6010) that Walmart gets it for $30.50 I have to pay $79.99 for it buying it from my master dealer or from my supplier. Now, if I buy it from Walmart for $35 who cares about commission I will make my money from price difference and once I sell it for $79.99 I would double my money. Here is a link to show you the price of Nokia6010 at WALMART PRICE ( $26.32) T-MOBILE WEBSITE PRICE ($99) FREE WITH A CONTRACT. Cellphone wholesale business is all over the states and there are thousands of phones being bought and sold from state to state. What those dealers did in Michigan is legal 100% their only crime is that they are from a Middle Eastern origin.