Annual web sales at online jeweler Blue Nile Inc. could reach $1 billion within five to seven years, founder and CEO Mark Vadon tells Internet Retailer.
“We’ve found a niche that we are going to stick with and grow,” Vadon says. “Every three years the company has doubled in size and we intend to keep that momentum going.”
Blue Nile built its business model around a specific market niche: men shopping for high-priced jewelry, especially engagement rings. About 86% of Blue Nile’s customers are men. In an online jewelry market where the average ticket is about $300, Blue Nile shoppers spend about $1,536 on each purchase. A typical order for an engagement ring at BlueNile.com is about $5,500, compared with an industry average of about $2,800.
Blue Nile, No. 49 in the Internet Retailer Top 500 Guide, believes it can achieve the goal of $1 billion in annual web sales by sticking with its current business model and by continuing to niche out the higher end of the online jewelry market, a strategy that appears to be working. In the first quarter, Blue Nile’s average orders for jewelry priced at more than $25,000 rose by 69% over the previous year and included seven transactions valued at more than $100,000. “We are just going to keep on doing the same thing better and better,” Vadon says. “We have no intention of growing complacent.”
Blue Nile had web sales of $251.6 million in 2006.