Blue Nile Prices?

[jmrecio]

Does anyone have a guestimate or first-hand knowledge of what the typical market up from wholesale is at Blue Nile? I am referring specifically to diamonds of course

Many thanks

 

[pricescope]

Jmrecio, welcome to the forum.

It can be estimated but I don''t think it can be helpful. One of the reason is that BN can have special arrangements with suppliers. Furthermore, BN use to vary markups for different categories of diamonds and changing them from time to time...

You can also open their financial reports (since it is a public company) and see their average margins. Compare it to Tiffany or Zales

good luck

 

[shiatsu]

Well I wouldn't compare Blue Nile's markup to Tiffany or Zales. Blue Nile's publicly reported gross margin is 22%, which is more comparable to Walmart. Tiffany's and Zales is over 50%, which is so high there are very few outside the jewelry business to compare to.

 

[jmrecio]

I was aware of the public financial information. In fact I work at a mutual fund company.

The problem is these company''s gross margins are an average of all of their products sold. Decorative jewelry and silver jewelry have higher gross margins than diamonds. That is counter intuitive to some investors because of the latter''s higher price point, but at the end of the day, diamonds are a commodity product (I know, blasphemy on this board).

So from this information we can derive that Blue Nile''s markup on diamonds is less than 20% and Tiffany''s is less than 40%... but how much less? Anyone have any insight here. Logical guestimates are welcome

 

[pricescope]

There is no point in guesstimating of a mark up to unknown cost, that''s the point.

 

[Adylon]

Well I'll try to answer/guestimate as best I can. We know some online websites give different percentage commissions for loose diamonds then finished jewelry to their affiliates... diamond.com gives their affiliates 4% commission for loose diamonds and 10% on finished jewelry. I think Bluenile used to have a similar offering of 5% for loose diamonds and 8% for everything else, but now it's just a flat rate of 5.5% to 8% based on volume (the more you sell the more commissions you earn). So I would venture to guess their profits on loose diamonds are about 2/3 to 1/2 that of their finished jewelry. Also I'm sure their markup for a 1/2ct diamond is not the same as a 5ct diamond, just like everyone else.