pricescope
Ideal_Rock
- Joined
- Dec 31, 1999
- Messages
- 8,266
Red Herring published interview with Mark Vadon, CEO of Blue Nile.
There are a few interesting bits:
There are a few interesting bits:
Full InterviewIf you look at our core markets, they’re San Francisco, Virginia, and Washington, D.C. Why’s a market like San Francisco or Austin, Texas good for us? Because people are so comfortable with technology. They’re letting it impact their lives.
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What physical retailers do is mark it up 100 percent. Running a jewelry store is expensive. The basic model is “buy for $1, sell for $2.”
At Blue Nile, gross margins are 22 percent. We buy for $1,000, and sell for $1,300. That’s why we’re scaling to be what we are. We’re offering high-quality products, and we’re offering a lot of information.
At physical stores, you’re selling customers products made up of commodities. There’s so much of a markup, you don’t want to tell them too much. You avoid answering any questions about the product and appeal to the romance of the product.
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Men aren’t shopping the same way as women. Women want to see how a bracelet feels, where the necklace falls. We’re very focused on men. The need we’re answering is that of the male consumer. The typical consumer is a male between 23 and 34 years old, belongs to a higher income group, and is well-educated. Some 96 percent of our consumers have some college background or more.