November 10, 2011, 3:29 PM

More customers doesn’t translate into higher sales for

Spending on customer acquisition rose almost 40% in Q3, but sales declined 6.9%.

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Online jeweler and auctioneer Inc. spent more to acquire customers in the third quarter, but even attracting a bigger pool of shoppers didn’t help to reverse a decline in sales.

For the third quarter, No. 150 in the Internet Retailer Top 500, reported:

  • Web sales of $20.3 million, a decrease of 6.9% from $21.8 million in the third quarter of 2010.
  • Net loss of about $1.5 million, compared with a net loss of about $614,000.
  • The average selling price per order was $155, down by 20.1% from $194.
  • The number of new buyers was 40,224, up 16.3% from 34,584.
  • The average number of orders per day was 1,614, a 12.7% increase from 1,432.
  • The average number of items sold per day was 5,631, up by 4.1% from 5,411.
  • The average number of items sold per transaction decreased to 3.3 from 3.8.
  • The acquisition cost per new buyer was $50, up by 38.9% from $36 in Q3 of 2010.

“Given the current economic conditions and decreased discretionary spending, we believe that we will continue to face challenges for the remainder of the year and into 2012," says president and chief technology officer Leon Kuperman.

For the first three quarters reported:

  • Web sales of $60.1 million, a decrease of 15.2% from $70.9 million in the first three quarters of 2010.
  • Net loss of $7.1, compared with a net loss of about $1.4 million.
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