Business Model

A business model is management’s blueprint for delivering a valuable product or service to customers in a manner that will generate ample revenues to cover costs and yield an attractive profit.

It sets forth the economic logic for making money in a business, given the company’s strategy. It describes two critical elements: (1) the customer value proposition and (2) the profit formula.

Blue Nile has an impressive business model. The fact that they operate solely online means they have certain advantages over other companies that are definite a winning aspect.

They look to provide customers with high quality diamonds at attractive prices and ensure the customer has a wealth of information and education on the topic throughout the entire process to ensure their confidence.

By doing all their business online means they don’t have to maintain a large inventory, which is a huge cost saver, allowing them to offer diamonds at cheaper prices to customers. They buy the diamonds from the supplier as they are purchased on the site, which also limits its risk of potential markdowns.

As well as being able to minimize mark ups due to direct diamond purchases, Blue Nile doesn’t need to employ staff for stores, and can have experts, and service staff always on call without having to physically have them in a place to talk to customers. Emails are replied to and phone calls answered from the same place, reducing employment costs as they don’t need to have multiple of the same people in different stores.

With the technological developments, Blue Nile is able to continue updating their site to make it bigger and better. They have the ‘Build your own’ feature, where people can customize their own jewelry with the diamond and setting you wish to have, customized exactly for you.

Another positive about Blue Nile’s business model is that being able to provide extensive