It’s easy to view Blue Nile solely as an early eCommerce success story but perhaps, its greatest accomplishment is the ability to produce and ship jewels in a highly efficient manner based on the individual requirements of an online order. This efficiency is one of the ways it earns the trusts of customers making a highly emotional purchase.
The unremarkable nature of the facility is due to security concerns. The merchandise is highly valuable, consisting of diamonds, colored gems and precious metals. Inside, multiple doors are used to enter and leave certain areas for security purposes. Workers were not identified in the story for the same reason.
Hide Iba, fulfillment center director, once told that assembly and fulfillment operation employs about 90 workers who produce about 300 to 400 jewels per day. From mid-November to Christmas, the number of workers rise and fall to 135 who produce 900 to 1,100 jewels per day around the clock. He said at its peak the company produces a finished product every 40 to 60 seconds.
The company has the ability to take orders as late as 4 p.m. ET for delivery by 10:30 a.m. the next morning, he said. More than 99 % of orders are delivered on time, most within a 48-hour period.
It’s important to note the company is not making jewelry. Workers assemble the pieces based on the materials that arrive and the online orders received. It’s a circular assembly-line operation. The diamonds and precious metals come in at one end of the facility and are assembled, polished and cleaned. Each piece then goes through a quality control process, and then the finished pieces are packaged and shipped from the same entryway.
The assembly-line process is a major reason for its efficiency. A bigger reason is that each job in the assembly line is extremely specific. It also helps that more than 70 % of the business is in engagement rings so there is some impression of consistency in the orders. Each order is assigned a clear plastic bag that lists the parts to be placed together. The steps in the process of assembling an engagement ring include sizing the ring shaft, soldering the mounting onto the shank, polishing the diamond and placing the diamond on the mounting. Each of these tasks is split into smaller job responsibilities.
The benefit of having very distinct small sections of responsibilities is that it’s easier to train them,” Iba said.
He added that there are not many highly skilled jewelers in Seattle so it’s another reason why they rely on training.
The most experienced and skilled bench jewelers work on the largest high-quality stones and settings. Iba referred to them as the “super bowl team.” The largest diamond ever sold at Blue Nile was 12.5 carats.
For the final stage in a separate room, all jewels are dipped in an ultrasonic immersion tank that extracts lose particles of precious metal so they can be reused. Then the pieces go through quality checks before being packed and shipped throughout the country.
There is no waste in the process, Iba said, including the tanks of chemicals used for cleaning the jewels and the rhodium dipping tanks for white gold jewels. The water is either recycled or evaporated.