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Blue Nile Case Study Essay examples

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Blue Nile Case Analysis

Overview Founded in 1999, Blue Nile has grown to become the largest online retailer of certified diamonds and fine jewelry. At Blue Nile you'll find high-quality diamonds certified by the most respected independent diamond grading labs. You can create your own jewelry were you choose the diamond and they will set it in your favorite earring, pendant, or ring design. Every order is shipped free, guaranteed and returnable within 30 days, so you can be sure you made the right decision. With sales of $251.6 million in 2006 compared to $169.2 million in 2004, Blue Nile is larger than the next three largest online jewelers combined. Blue Nile was the only jeweler to have ever received the bizrate.com Circle of …show more content…

Blue’s Nile suppliers represented more than half of the total supply of high quality diamonds in the United States. Blue Nile did actually purchase a diamond or gem from these suppliers until a customer placed an order for it, this minimized the costs associated with carrying large inventories. Blue Nile’s supply chain saving gave it a significant pricing advantage. For every dollar that Blue Nile paid suppliers, it sold its finished jewelry for a markup of about 33 percent over cost. Blue Nile’s marketing strategy focused on making sure the website was a positive shopping experience for customers. Also their efforts to draw more customers included both online and offline marketing. However in 2005 Blue Nile pulled back on advertising during December because the cost to buy keywords on Internet search engines rose dramatically. In a $55-$60 billion industry, management believes that the company’s market share of online sales of engagement rings exceeded 50 percent in 2005. In 2005 the share of the overall engagement ring market in the United States was approximately 3.2%. With sales of jewelry not containing diamonds accounted for 10% of Blue Nile’s 2005 revenues, but typically lesser-priced items were considered important because they

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