Cash4Gold 50 Million a year?

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shawn81

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Sep 26, 2007
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50 Million a year? Oh my...

Cash4Gold Absolutely Raking In The Money

You’ve probably seen ads on TV and the Internet for Florida-based Cash4Gold, a service that buys gold from people (watches, rings, other jewelry, etc.) via the mail. You send in your stuff, the company sends you money. You have twelve days to say you don’t accept their offer and you get your gold back. The company pays shipping (both ways if necessary) plus insurance.

The service launched in early 2008 to a perfect storm of soaring gold prices and a down economy. But still, it’s more than surprising that the company raked in $90 million in revenue in the first year of operations according to a source close to the company. Profit, even after paying out cash to sellers and a huge marketing spend, was in the $30 million range.

Revenues in 2009 are on track to hit $160 million, says our source, with a similar profit margin. That implies $50 million or so in 2009 profits.

The company decided to buy a Super Bowl commercial in 2009, featuring MC Hammer (pictured in image above, sans dignity) and Ed McMahon. You can watch it here (embedding is disabled for some reason). Television, not Internet advertising, continues to be their most profitable marketing, says our source.

The business velocity attracted the venture capitalists, of course. Sometime this year the company took a sizable investment from Mangrove Capital Partners and possibly other investors as well. Mangrove is notable because they’re a European firm (and also one of the first investors in Skype).

So what’s next for Cash4Gold? Competition. A number of clones have launched in the U.S., which is driving marketing costs up. The company recently launched operations in the UK and will continue international expansion. They’re going to have to do some serious brand building and lock up key strategic partnerships if they intend to create a long term business. But in the meantime they’ve made a ton of money off a very simple but very good idea.
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^ Probably none. I'll bet they melt all that shit down and sell it as gold blocks to some arab country.
 
efeezy said:
^ Probably none. I'll bet they melt all that shit down and sell it as gold blocks to some arab country.
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Hell no... arabs wouldnt even buy our shitty gold... any arab country you go to, they only sell 18k gold and up.

the norm is 24k for everything. I wonder if they send out that check like telebrands does... there backend system must be phenomenal.
 
imouttehre said:
Hell no... arabs wouldnt even buy our shitty gold... any arab country you go to, they only sell 18k gold and up.

the norm is 24k for everything. I wonder if they send out that check like telebrands does... there backend system must be phenomenal.
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You do realize when they melt it down it is pure gold right? They make it without the metals that make gold karets

I could be wrong.
 
After gold is melted it's reprocessed and can become any karat. Arabs generally buy 22k gold, as 24k is too soft to be durable. I have a 22K cartouche that came from the middle east and has Arab markings (purchased for $42 from eBay!).
 
Higher the Karat rating , the softer gold is (pure gold is quite soft, which is why it was so sought after in ancient times, it's very easy to mold into jewelry and has a low melting point.)
 
I wonder why local jewelry and pawn shops don't capitalize on the opportunity by advertising better payouts than Cash4Gold? I mean, do a direct comparison right in the ad and they'd get people in the door. I guess pawn shops don't understand that you can sell that shit to refiners for serious bank.
 
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