Creative Marketing — Silver Edition

“U.S. zip codes turn up silver for residents.”

This is the title of a full-page newspaper ad for 1/4 ounce silver bars.

In the ad, there is a list of the 1st two digits of various zip codes around the country. The ad is made to look like this is only available to an exclusive set of people.

Upon closer look, ALL zip codes in the country are covered.

The silver bars sell for $59 each if buying one, but if you buy a bag of 10, then the price is “only” $39 each (soon to increase to $59 once this special ends).

Let’s look at the math. Right now, silver is about $64 an ounce (big run-up this year). So, each 1/4 ounce bar has about $16 worth of silver in it.

Not a bad mark-up for stamping useless designs on the bars, since the intrinsic value is in the silver, not the design.

If buying one bar, the cost is 3.68 times the intrinsic silver value. To break even, silver would have to increase to $236 an ounce.

By splurging for a bag of 10 bars, the cost is 2.43 times the intrinsic silver value. The breakeven silver price drops to $ 156.

Neither of these is a good investment.

“There’s a sucker born every minute.”