Part of the reason BlueNile (and JamesAllen.com) are successful is that they can offer diamonds at much lower prices than any retail store due to the way the ma

Part of the reason BlueNile (and JamesAllen.com) are successful is that they can offer diamonds at much lower prices than any retail store due to the way the market is structured [1]. They buy directly from diamond sightholders, so they have larger inventory and lower overhead. Diamonds may be a commodity, but these retailers have a systematic advantage within that market. Typical retail stores charge a 100% markup over the wholesale cost; BlueNile's is about 18%. [1] http://www.truthaboutdiamonds.com/truth-about/james-allen-blue-nile/ http://www.truthaboutdiamonds.com/truth-about/james-allen-bl... "Have You Ever Tried to Sell a Diamond?" is also interesting reading. http://www.theatlantic.com/magazine/print/1982/02/have-you-ever-tried-to-sell-a-diamond/4575/ http://www.theatlantic.com/magazine/print/1982/02/have-you-e...