NILE » Topics » Differentiating Factors and Value Proposition

These excerpts taken from the NILE 10-K filed Mar 5, 2009.
Differentiating Factors and Value Proposition
 
We have built an innovative business model that delivers exceptional value and service to customers. We have developed relationships with a large number of independent vendors with whom we have exclusive agreements as an online retailer. Our unique inventory model allows us to offer our customers access to an enormous selection of high quality diamonds. In most cases, we purchase diamonds from our suppliers only when a customer has ordered them from us. As a result, we do not incur the significant costs typically associated with carrying high levels of diamond inventory in physical retail.
 
As an online retailer, we also do not incur most of the operating costs associated with physical retail stores, including occupancy costs and related overhead. As a result, while our gross profit margins are lower than those typically maintained by traditional diamond and fine jewelry retailers, we are able to realize relatively higher operating income as a percentage of net sales. In the year ended January 4, 2009, we had a 20.3% gross profit margin, as compared to what we believe to be gross profit margins of up to 50% or more by some traditional retailers. Our lower gross profit margins result from lower retail prices that we offer to our customers. We believe that these lower prices, in turn, will result in increasing our market share in the luxury jewelry retail space.
 
Our efficient operating model provides for negative working capital benefits. Payments are received from customers within a few days of their orders, but our vendor payment terms are typically in the 60-90 day range.
 
We have an obsessive focus on the customer. We develop our websites to offer easy to understand, step-by-step guides to visualizing, evaluating, selecting and purchasing diamonds and fine jewelry. Our customer support centers are staffed with non-commissioned product experts who offer advice and guidance to customers. We continue to invest in optimizing our fulfillment operations to ensure that our customized products can be delivered within approximately three business days of order.
 
Customer feedback and customer satisfaction ratings are among the key non-financial measures we review. We believe that maintaining high overall customer satisfaction is critical to our ongoing efforts to promote the Blue Nile brand and to increase our net sales and net income. We actively solicit customer
 
 
1 Blue Nile defines free cash flow, a non-GAAP financial measure, as net cash provided by (used in) operating activities less cash outflows for purchases of fixed assets, including internal use software and website development.


26


Table of Contents

feedback on our website functionality as well as on the entire purchase experience. To maintain a high level of performance by our diamond and jewelry consultants, we also undertake an ongoing customer feedback process.
 
Differentiating Factors and Value Proposition
 
We have built an innovative business model that delivers exceptional value and service to customers. We have developed relationships with a large number of independent vendors with whom we have exclusive agreements as an online retailer. Our unique inventory model allows us to offer our customers access to an enormous selection of high quality diamonds. In most cases, we purchase diamonds from our suppliers only when a customer has ordered them from us. As a result, we do not incur the significant costs typically associated with carrying high levels of diamond inventory in physical retail.
 
As an online retailer, we also do not incur most of the operating costs associated with physical retail stores, including occupancy costs and related overhead. As a result, while our gross profit margins are lower than those typically maintained by traditional diamond and fine jewelry retailers, we are able to realize relatively higher operating income as a percentage of net sales. In the year ended January 4, 2009, we had a 20.3% gross profit margin, as compared to what we believe to be gross profit margins of up to 50% or more by some traditional retailers. Our lower gross profit margins result from lower retail prices that we offer to our customers. We believe that these lower prices, in turn, will result in increasing our market share in the luxury jewelry retail space.
 
Our efficient operating model provides for negative working capital benefits. Payments are received from customers within a few days of their orders, but our vendor payment terms are typically in the 60-90 day range.
 
We have an obsessive focus on the customer. We develop our websites to offer easy to understand, step-by-step guides to visualizing, evaluating, selecting and purchasing diamonds and fine jewelry. Our customer support centers are staffed with non-commissioned product experts who offer advice and guidance to customers. We continue to invest in optimizing our fulfillment operations to ensure that our customized products can be delivered within approximately three business days of order.
 
Customer feedback and customer satisfaction ratings are among the key non-financial measures we review. We believe that maintaining high overall customer satisfaction is critical to our ongoing efforts to promote the Blue Nile brand and to increase our net sales and net income. We actively solicit customer
 
 
1 Blue Nile defines free cash flow, a non-GAAP financial measure, as net cash provided by (used in) operating activities less cash outflows for purchases of fixed assets, including internal use software and website development.


26


Table of Contents

feedback on our website functionality as well as on the entire purchase experience. To maintain a high level of performance by our diamond and jewelry consultants, we also undertake an ongoing customer feedback process.
 
Differentiating Factors and Value Proposition
 
We have built an innovative business model that delivers exceptional value and service to customers. We have developed relationships with a large number of independent vendors with whom we have exclusive agreements as an online retailer. Our unique inventory model allows us to offer our customers access to an enormous selection of high quality diamonds. In most cases, we purchase diamonds from our suppliers only when a customer has ordered them from us. As a result, we do not incur the significant costs typically associated with carrying high levels of diamond inventory in physical retail.
 
As an online retailer, we also do not incur most of the operating costs associated with physical retail stores, including occupancy costs and related overhead. As a result, while our gross profit margins are lower than those typically maintained by traditional diamond and fine jewelry retailers, we are able to realize relatively higher operating income as a percentage of net sales. In the year ended January 4, 2009, we had a 20.3% gross profit margin, as compared to what we believe to be gross profit margins of up to 50% or more by some traditional retailers. Our lower gross profit margins result from lower retail prices that we offer to our customers. We believe that these lower prices, in turn, will result in increasing our market share in the luxury jewelry retail space.
 
Our efficient operating model provides for negative working capital benefits. Payments are received from customers within a few days of their orders, but our vendor payment terms are typically in the 60-90 day range.
 
We have an obsessive focus on the customer. We develop our websites to offer easy to understand, step-by-step guides to visualizing, evaluating, selecting and purchasing diamonds and fine jewelry. Our customer support centers are staffed with non-commissioned product experts who offer advice and guidance to customers. We continue to invest in optimizing our fulfillment operations to ensure that our customized products can be delivered within approximately three business days of order.
 
Customer feedback and customer satisfaction ratings are among the key non-financial measures we review. We believe that maintaining high overall customer satisfaction is critical to our ongoing efforts to promote the Blue Nile brand and to increase our net sales and net income. We actively solicit customer
 
 
1 Blue Nile defines free cash flow, a non-GAAP financial measure, as net cash provided by (used in) operating activities less cash outflows for purchases of fixed assets, including internal use software and website development.


26


Table of Contents

feedback on our website functionality as well as on the entire purchase experience. To maintain a high level of performance by our diamond and jewelry consultants, we also undertake an ongoing customer feedback process.
 
Differentiating
Factors and Value Proposition



 



We have built an innovative business model that delivers
exceptional value and service to customers. We have developed
relationships with a large number of independent vendors with
whom we have exclusive agreements as an online retailer. Our
unique inventory model allows us to offer our customers access
to an enormous selection of high quality diamonds. In most
cases, we purchase diamonds from our suppliers only when a
customer has ordered them from us. As a result, we do not incur
the significant costs typically associated with carrying high
levels of diamond inventory in physical retail.


 



As an online retailer, we also do not incur most of the
operating costs associated with physical retail stores,
including occupancy costs and related overhead. As a result,
while our gross profit margins are lower than those typically
maintained by traditional diamond and fine jewelry retailers, we
are able to realize relatively higher operating income as a
percentage of net sales. In the year ended January 4, 2009,
we had a 20.3% gross profit margin, as compared to what we
believe to be gross profit margins of up to 50% or more by some
traditional retailers. Our lower gross profit margins result
from lower retail prices that we offer to our customers. We
believe that these lower prices, in turn, will result in
increasing our market share in the luxury jewelry retail space.


 



Our efficient operating model provides for negative working
capital benefits. Payments are received from customers within a
few days of their orders, but our vendor payment terms are
typically in the
60-90 day
range.


 



We have an obsessive focus on the customer. We develop our
websites to offer easy to understand,
step-by-step
guides to visualizing, evaluating, selecting and purchasing
diamonds and fine jewelry. Our customer support centers are
staffed with non-commissioned product experts who offer advice
and guidance to customers. We continue to invest in optimizing
our fulfillment operations to ensure that our customized
products can be delivered within approximately three business
days of order.


 



Customer feedback and customer satisfaction ratings are among
the key non-financial measures we review. We believe that
maintaining high overall customer satisfaction is critical to
our ongoing efforts to promote the Blue Nile brand and to
increase our net sales and net income. We actively solicit
customer

 
 


1 Blue

Nile defines free cash flow, a non-GAAP financial measure, as
net cash provided by (used in) operating activities less cash
outflows for purchases of fixed assets, including internal use
software and website development.





26





Table of Contents






feedback on our website functionality as well as on the entire
purchase experience. To maintain a high level of performance by
our diamond and jewelry consultants, we also undertake an
ongoing customer feedback process.


 




Differentiating
Factors and Value Proposition



 



We have built an innovative business model that delivers
exceptional value and service to customers. We have developed
relationships with a large number of independent vendors with
whom we have exclusive agreements as an online retailer. Our
unique inventory model allows us to offer our customers access
to an enormous selection of high quality diamonds. In most
cases, we purchase diamonds from our suppliers only when a
customer has ordered them from us. As a result, we do not incur
the significant costs typically associated with carrying high
levels of diamond inventory in physical retail.


 



As an online retailer, we also do not incur most of the
operating costs associated with physical retail stores,
including occupancy costs and related overhead. As a result,
while our gross profit margins are lower than those typically
maintained by traditional diamond and fine jewelry retailers, we
are able to realize relatively higher operating income as a
percentage of net sales. In the year ended January 4, 2009,
we had a 20.3% gross profit margin, as compared to what we
believe to be gross profit margins of up to 50% or more by some
traditional retailers. Our lower gross profit margins result
from lower retail prices that we offer to our customers. We
believe that these lower prices, in turn, will result in
increasing our market share in the luxury jewelry retail space.


 



Our efficient operating model provides for negative working
capital benefits. Payments are received from customers within a
few days of their orders, but our vendor payment terms are
typically in the
60-90 day
range.


 



We have an obsessive focus on the customer. We develop our
websites to offer easy to understand,
step-by-step
guides to visualizing, evaluating, selecting and purchasing
diamonds and fine jewelry. Our customer support centers are
staffed with non-commissioned product experts who offer advice
and guidance to customers. We continue to invest in optimizing
our fulfillment operations to ensure that our customized
products can be delivered within approximately three business
days of order.


 



Customer feedback and customer satisfaction ratings are among
the key non-financial measures we review. We believe that
maintaining high overall customer satisfaction is critical to
our ongoing efforts to promote the Blue Nile brand and to
increase our net sales and net income. We actively solicit
customer

 
 


1 Blue

Nile defines free cash flow, a non-GAAP financial measure, as
net cash provided by (used in) operating activities less cash
outflows for purchases of fixed assets, including internal use
software and website development.





26





Table of Contents






feedback on our website functionality as well as on the entire
purchase experience. To maintain a high level of performance by
our diamond and jewelry consultants, we also undertake an
ongoing customer feedback process.


 




These excerpts taken from the NILE 10-K filed Feb 27, 2008.
Differentiating Factors and Value Proposition
 
We have built an innovative business model that delivers exceptional value and service to customers. We have developed relationships with a large number of independent vendors with whom we have exclusive agreements as an online retailer. Our unique inventory model allows us to offer our customers access to an enormous selection of high quality diamonds. In most cases, we purchase diamonds from our suppliers only when a customer has ordered them from us. As a result, we do not incur the significant costs typically associated with carrying high levels of diamond inventory in physical retail.
 
As an online retailer, we do not incur most of the operating costs associated with physical retail stores, including occupancy costs and related overhead. As a result, while our gross profit margins are lower than those typically maintained by traditional diamond and fine jewelry retailers, we are able to realize relatively higher operating income as a percentage of net sales. In the year ended December 30, 2007, we had a 20.4% gross profit margin, as compared to what we believe to be gross profit margins of up to 50% or more by some traditional retailers. Our lower gross profit margins result from lower retail prices that we offer to our customers. We believe these lower prices, in turn, contribute to increased net sales.
 
Our efficient operating model provides for negative working capital benefits. Payments are received from customers within a few days of their orders, but our vendor payment terms are typically in the 60-90 day range.
 
We have an obsessive focus on the customer. We develop our websites to offer easy to understand, step-by-step guides to visualizing, evaluating, selecting and purchasing diamonds and fine jewelry. Our customer support centers are staffed with non-commissioned product experts who offer advice and guidance to
 
 
1 Blue Nile defines free cash flow, a non-GAAP financial measure, as net cash provided by (used in) operating activities less cash outflows for purchases of fixed assets, including internal use software and website development.


24


Table of Contents

customers. We continue to invest in optimizing our fulfillment operations to ensure that our customized products can be delivered within approximately three business days of order.
 
Among the key non-financial measures we review are customer feedback and customer satisfaction ratings. We believe that maintaining high overall customer satisfaction is critical to our ongoing efforts to promote the Blue Nile brand and to increase our net sales and net income. We actively solicit customer feedback on our website functionality as well as on the entire purchase experience. To maintain a high level of performance by our diamond and jewelry consultants, we also undertake an ongoing customer feedback process.
 
Differentiating
Factors and Value Proposition



 



We have built an innovative business model that delivers
exceptional value and service to customers. We have developed
relationships with a large number of independent vendors with
whom we have exclusive agreements as an online retailer. Our
unique inventory model allows us to offer our customers access
to an enormous selection of high quality diamonds. In most
cases, we purchase diamonds from our suppliers only when a
customer has ordered them from us. As a result, we do not incur
the significant costs typically associated with carrying high
levels of diamond inventory in physical retail.


 



As an online retailer, we do not incur most of the operating
costs associated with physical retail stores, including
occupancy costs and related overhead. As a result, while our
gross profit margins are lower than those typically maintained
by traditional diamond and fine jewelry retailers, we are able
to realize relatively higher operating income as a percentage of
net sales. In the year ended December 30, 2007, we had a
20.4% gross profit margin, as compared to what we believe to be
gross profit margins of up to 50% or more by some traditional
retailers. Our lower gross profit margins result from lower
retail prices that we offer to our customers. We believe these
lower prices, in turn, contribute to increased net sales.


 



Our efficient operating model provides for negative working
capital benefits. Payments are received from customers within a
few days of their orders, but our vendor payment terms are
typically in the
60-90 day
range.


 



We have an obsessive focus on the customer. We develop our
websites to offer easy to understand,
step-by-step
guides to visualizing, evaluating, selecting and purchasing
diamonds and fine jewelry. Our customer support centers are
staffed with non-commissioned product experts who offer advice
and guidance to

 
 


1 Blue
Nile defines free cash flow, a non-GAAP financial measure, as
net cash provided by (used in) operating activities less cash
outflows for purchases of fixed assets, including internal use
software and website development.





24





Table of Contents






customers. We continue to invest in optimizing our fulfillment
operations to ensure that our customized products can be
delivered within approximately three business days of order.


 



Among the key non-financial measures we review are customer
feedback and customer satisfaction ratings. We believe that
maintaining high overall customer satisfaction is critical to
our ongoing efforts to promote the Blue Nile brand and to
increase our net sales and net income. We actively solicit
customer feedback on our website functionality as well as on the
entire purchase experience. To maintain a high level of
performance by our diamond and jewelry consultants, we also
undertake an ongoing customer feedback process.


 




RELATED TOPICS for NILE:

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki