Which was the first successful online diamond store and how did it get to this position?

Blue Nile is the pioneer of diamond jewelry E-Commerce, at least in its recent successful format. The breakthrough Blue Nile created was achieved through an understanding the global diamond market and the stress that diamond suppliers and retailers face every day. As opposed to the former diamond supply chain, in which diamonds are sold from a diamond production company to a diamond wholesaler and then to a brick & mortar store and during this route become more and more expensive, Blue Nile works with several suppliers, no strings attached, listing the suppliers' merchandise on its site, though paying for it and sending it to the customers only after a diamond is purchased by the private diamond consumer.

As an online store, Blue Nile doesn't pay the large expenses a brick & mortar store does, and in addition, there's a very efficient symbiosis between the diamond supplier and Blue Nile: The former isn't obligated to do business only with Blue Nile and can list its products in several stores, this way increasing the chances that its items will be sold, while the latter doesn't have to pay for a constant variety of diamonds and practically pays only for diamonds which are demanded by private customers.

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There's no doubt about Blue Nile's success, but lately things seem to being not so well for them. I read that the number of unique visitors to their site dropped by almost 40% in October 2009. Lately the jewelry market isn't very lively to say the least, but it seems that other online jewelry dealers suffer from a less extreme drop in visitor entrance than Blue Nile. The data was given by comScore's, which analyze traffic to websites. Perhaps the 40% drop is an exaggeration, but its definite that Blue Nile's traffic is not occupying any highway. What does this drop imply about diamond sales? With many loyal customers, Blue Nile is still a top online diamond jewelry business, and it's possible that the visitors who aren't entering the Blue Nile site anymore were never high spenders, but still it isn't a good sign for the E-Commerce giant. Anyhow, November and December are expected to be a good cure for the recession wounds, for Blue Nile as well as other diamond jewelry stores. We'll wait and see how long will be the rescue rope that the Christmas season will throw in Blue Nile's direction...

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I appreciate what Blue Nile has done, but in the present I don't think they are one of the best online diamond stores in the customer's perspective. Being a pioneer has its price, they paved the way for even more diamond consumer friendly stores.

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