The Blue Nile Corp

Blue Nile Inc , considered to be the world 's biggest online retailer of certified diamonds and fine jewelry , seems to have cornered the online diamond market . The company , with sales of 169 .2 million in 2005 became a force to reckon with among jewelry e-tailers , which collectively sold 2 .3 billion in the same year . It has , from 2001 seen a sales growth rate of 39 and a profit of 13 .1 million (a turnaround from losses of 7 .4 million just 5 years before , the company became a force to reckon with

in online jewelry retailers , which collectively sold 340 million in the same year . In 2005 , Blue Niles sales mix was largely skewed towards engagement rings , which comprised 72 of its rings--makes up a bulk of the remaining sales . The company 's management believes that it owns more than 50 of the market

Blue Nile , a company founded in 1999 , also had a debt-free balance sheet going into both 2006 and 2007 . The company had , however , been reluctant to expand its offerings and increase its marketing , due to profitability concerns . This would expound on how increased marketing efforts would provide for a successful expansion in both product lines and international markets , and ultimately improve the company 's sales and profitability

The company found its niche by offering high-quality merchandise at attractive prices , combined with superior customer service and wide product selection

High-quality merchandise . Blue Nile , through its Web sites , has offered as much as 60 ,000 diamonds . Each had been independently certified , and the selection had been basically limited to those conforming to high-quality standards in terms of shape , cut , color , clarity and carat weigh . While focused mainly on diamonds , the company also carries gold platinum , pearl and silver , along with settings , rings , bands , watches pendants , earrings , bracelets , and necklaces . The company 's product ranged from simple designs to impressive and signature pieces

Attractive Prices . Blue Nile is able to price competitively because it has arrangements with its suppliers in which the company can on demand . When an is placed , the supplier concerned will ship the diamond to Blue Nile or an affiliate within one day , whereupon it is processed and made into the specified . Finished products are usually in the customer 's hands within three days . This system has enabled Blue Nile to keep a low inventory and operational costs , which in turn enables it to price competitively . More than that , even with special supplier arrangements , Blue Nile does not rely on a few suppliers to decrease supplier dependency

The company also has lean operating costs due to high operating efficiency : low labor cost due to a small workforce , low incidence of Internet service interruptions . In fact , the company 's overall selling general and administrative expenses was only 13 of 2005 sales , and 14 of 2004 sales

The resulting scenario is that Blue Nile is able to offer prices that are around 20 to 40 lower than other retail jewelry stores . The company...