Blue Nile Inc.

Blue Nile Inc. (bluenile.com) is a pure-play online e-tailer that sells diamonds and Jewelry since 1999.  Blue Nile's success is due partly to its B2C EC model that allows it to cut down prices by 35% and to get rid of intermediaries. This has allowed Blue Nile to capture a large market share in a short period of time.

It is hard to believe that an online diamond business would be successful, but Blue Nile has defied this conventional wisdom by providing more information about diamonds that any jewelry expert could offer at any other physical store. The vast selection of diamonds and the availability of information have attracted many customers who are not willing to pay the high prices at Tiffany & Co. 

In 2007, Blue Nile sales were $319 million and kept growing 24 % annually and became the eighth largest jewelry company in the United States. Most jewelry companies need 300 stores and 2200 employees to be able to sell $319 million every year and Blue Nile is able to achieve this with a 10000-square-foot warehouse and only 115 staffers. Also, in the diamond industry, a diamond goes through five or more middlemen before reaching a retailer. Blue Nile reduces this by dealing with its suppliers directly. What gives a competitive edge to Blue Nile is its 30 day money-back guarantee, because its gives security to its customers who usually have to worry about paying a fee if they want to return a diamond at other retailers.