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To: H James Morris who wrote (140117)	3/2/2002 3:37:51 PM
From: Glenn D. Rudolph	Respond to of 164684

"Glenn, this is over a year old, but blue nile sold a $183,000 diamond engagement ring on the Internet! Can you beat that?;0)" Nope. Do not have intentions of doing that either. "What would be the gross profit on a $183,000 diamond engagement ring??" This is purely dependant upon the retailer's gross margin. The deal they worked out with their customer. Based on Blue Nile's prior record, they likely lost money on this sale. ""We think we will be one of the only pure play consumer e-commerce companies that makes it," said Vadon, adding that the company reported 100 percent revenue growth in 2000. Blue Nile had sales of $50 million last year and just last week had its biggest sale ever: an $183,000 diamond engagement ring." I really could care less about revenue. Any firm can sell millions of dollars worth at a loss. That is not difficult. It is stupid. "Vadon said the company is curtailing many of its mass media marketing and advertising programs and is focusing on growing the business through word of mouth. He said about 50 percent of sales come through repeat business or referrals. The job cuts occurred throughout the company with marketing and customer service taking the biggest hit. Two of Blue Nile's competitors -- Adornis.com and Miadora.com -- closed last fall." This story is pure bull. Neither Adornis.com or Miadora.com ever sold much. Here check these out: mondera.com szul.com thediamondsource.net reeds.com 4diamondearrings.com The above is just a start. ""We had record sales last year and we expect stronger sales this year," said Mike Walters, a spokesman for the company. "(But) we are not immune to what everyone is going through." Walters said the company hopes to reach profitability by the end of the year." Blue Nile has not had a profitable year ever. They sure know how to burn cash though. Let's look at a successful firm. David Jewelers is on track to do $8 million on-line this year with a net bottom line of 5%. It would seem to me the bottom line is what counts. What we do not offer: 1. Free shipping. Shipping is a cost of doing business and the customer has to pay that cost. 2. Sell diamonds or any other fine jewelry below 5% gross margin. That just inflates revenue, makes the credit card processing firms money, the diamond mines and cutters make money. They make enough already. Look at DeBeers. 3. We do not display or promote merchandise that is not ours. This way we do not pay to have it shipped to us so we may box it and then ship it again to the consumer. Note Blue Nile needs two days to supply any decent size and quality diamond <VVBG> Our products are in the consumer's hands the next day. 4. We do not sell any lab created stones of any kind. 5. We do not sell any heat treated or in any way treated stones except for the cutting and polishing. David Jewelers offers a very large selection of fine jewelry products. All merchandise can be at your house within 24 hours. Most items have unique styling. All are priced competively but non are sold for less than 5% gross margin. Our service is second to none. We do not have gaping holes in our selection such as no gold chain or semi-precious stones. We can make any fine jewelry piece to order within five working days and we use the very top talent. Not an assembly line worker. Enough said!