What's not clear to me is how you could (according to the final paragraph) "lose a lot of money" when you seem to have had minimal overheads and (according to part 1) you were making a profit of $40.75 per unit.
Naturally you had some unsaleable stock left over, but at $2100 shipped per lot of 500, did this really make much of a dent in your final profit from the venture?
I guess he was taking seriously the demand that he "couldn’t even trade under the same name", and the USB drives do feature his brand rather prominently.
I don't see why trading under the same name would be an issue. Not that I'm educated in the area. But just because some lawyer told him he couldn't, doesn't mean it is fact. I think he should have kept going with the usb drives. And even if he did feel he needed to change names, he could've ....changed names! And still kept up with the import and sale of the usb drives. The article doesn't really explain why there was a complete halt to the business.
I'm guessing this was a case of big company doesn't really want to sue a 16-year-old entrepreneur, they just want him to cease all operations. Sure, he could have changed his company name and sold another product, but that product couldn't have been the USB drive given the rather prominent branding on them.
non-affiliate sales generated $40.75 profit per unit according to the first article.
affiliate sales generated $35.80 profit per unit by his numbers ($55 - $15 affiliate - $4.20 unit cost). I get the impression that affiliate sales were face-to-face and not the bulk of his business, although I might be wrong here.
I was purchasing these products for $4.20 each [including shipping and handling] so I could afford to undercut the competitors by a significant margin. A buy it now (BIN) price was put as $49.95 -- this would give me a $45.75 profit, minus the eBay fees which brought the profit down to around $40.75.
It should be obvious to others who the "major business in the MP3 industry" was when you see the product he was re-selling: http://www.sofamoolah.com/wp-content/uploads/2011/07/1p.jpg
What's not clear to me is how you could (according to the final paragraph) "lose a lot of money" when you seem to have had minimal overheads and (according to part 1) you were making a profit of $40.75 per unit.
Naturally you had some unsaleable stock left over, but at $2100 shipped per lot of 500, did this really make much of a dent in your final profit from the venture?