StashLearn
Get the app
Get the app

Join millions of investors on Stash

Investing, simplified

Start today with as little as $5
Get the app
Life

It’s The Most Profitable Time of the Year: Inside Santa’s Workshop

December 24, 2018

3 min read

What if Santa Claus’ North Pole-based operation was an actual business or non-profit organization?

He’d be faced some unique challenges, to say the least, including maintaining a large, elvish workforce, building out huge factories and storage facilities, and of course, dealing with the health consequences of eating millions of cookies.

As a fun little exercise, we attempted to calculate out some of the business costs Santa faces, as well as how big of a market the big man is trying to serve.

Tighten your sash, we’re about to slide down a strange chimney.

Santa’s market

There are more than 525 million children under the age of 14 who are likely to celebrate Christmas in the world. We can use this as our bare-bones estimate—there are likely tens or hundreds of millions more.

So, we’ll say that Santa has to visit at least 525 million kids on Christmas night. And if we say that Santa gives each kid three presents, we know that he’ll need at least 1.575 billion gifts ready for delivery.

How he does it remains a mystery, so we’ll give him the benefit of the doubt that he can get it done. We just need to know the size of the market.

Santa’s workforce

If you need at least 1.5 billion toys ready for delivery every Christmas, it’s going to require a lot of labor. But just how much?

To calculate how much elf-power would be needed to produce the appropriate number of toys, we could use an equation such as this:

So, what if we have 525 million kids, and each needs three toys, elves work 364 days per year for 8 hours, creating four toys per hour? By plugging in these variables into the equation, we find that Santa’s elf workforce would total up to 135,216.

As for what these elves are being paid? The North Pole is actually outside of any nation’s exclusive economic zone—an area stretching out from a country’s shoreline in which that country’s laws and regulations would apply—so there wouldn’t be any specific regulations related to wages that would apply. In other words, there are no rules Santa would have to abide by.

But, for fun, if you wanted to apply the U.S. federal minimum wage of $7.25 per hour, your average worker elf would earn a measly $21,112 per year working 8 hours per day, 364 days per year.

Equipment and facilities

Here are some quick estimates for some of the other costs Santa should expect to encounter:

As for factory and warehouse space, the costs could vary. We can presume that Santa already owns plenty of North Pole acreage, so his costs likely revolve around construction and heating.

We don’t know how much space Santa would need—but we could possibly compare it to perhaps a similar commercial complex, Amazon’s recently announced global hub in Cincinnati. That hub will have more than 3 million square feet in which to conduct operations, and have a footprint of 1,100 acres.

The total cost is expected to be $1.5 billion. Santa may end up paying more for a similar facility, since transporting materials to the North Pole is likely to present logistical challenges.

Taxes

The North Pole is a wild, lawless land. As such, there wouldn’t be any taxes to pay—because there isn’t a government to pay them to (although, interestingly enough, if you are a Santa Claus actor in Belarus, you’re expected to pony up).

But, again, if Santa wouldn’t want to end up on the IRS’ naughty list. It’s difficult, if not impossible to tell what types of taxes Santa would owe to the IRS, but we do know that he’d likely be able to reduce it considerably—perhaps as much as 50%—due to charitable contribution deductions.

The bottom line

Santa’s not running a cheap outfit up north. He’s giving away billions of dollars in gifts every year, employing tens of thousands, and is faced with some weighty infrastructure and upkeep costs.

All told, he’s running an operation that costs billions of dollars. But that may be a small cost to eat in exchange for tens of millions of happy kids on Christmas morning.

Receive more fun stories, direct to your inbox, by subscribing to the Stash newsletter.

By Sam Becker

Next for you
Why the Holiday Season is The Super Bowl of Retail

Investment Profile

Bonds Worldwide

An International Bond ETF on Stash

Learn more
Explore more articlesChoose a topic to learn more about
politics market news social media Technology Careers
Disclaimers

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Before investing, please carefully consider your willingness to take on risk and your financial ability to afford investment losses when deciding how much individual security exposure to have in your investment portfolio.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.