                                                                    EXHIBIT 10.3

                                  BLUEFLY, INC.
                                42 West 39 Street
                            New York, New York 10018

                                                                    June 5, 2006

SFM Domestic Investments LLC
Quantum Industrial Partners LDC
c/o Soros Fund Management LLC
888 Seventh Avenue
New York, New York 10106
Attention: David Wassong

                Subject: Sharing of Placement Fees

Dear David:

Bluefly, Inc.("Bluefly") has engaged Allen & Company LLC ("Allen") to act as
financial advisor and placement agent under an engagement letter dated March 30,
2006 (the "Engagement Letter") for a possible private placement (the
"Transaction"). Upon the consummation of the Transaction, Bluefly intends to use
a portion of the proceeds to pay certain outstanding debt owed to, as well as
certain dividends accrued on shares of Series A, B, C, D, E and F Convertible
Preferred Stock held by, Quantum Industrial Partners LDC ("QIP") and SFM
Domestic Investments LLC ("SFM"). The Engagement Letter provides, in Section 2
thereof, that Allen will be paid a placement fee (the "Fee") in the aggregate
amount of 5% of the gross proceeds received by Bluefly or its shareholders in
the Transaction completed during the term of the Engagement Letter or (as to
entities introduced to Bluefly by Allen), the one year "tail" period set forth
therein.

This letter sets forth our agreement that, if QIP, SFM or their respective
affiliates (each, a "Recipient") receives a portion of the proceeds received by
the Company in the Transaction, then each such Recipient will pay a portion of
the Fee equal to the product of (x) the aggregate Fee payable by the Company
pursuant to Section 2 of the Engagement Letter, times (y) a ratio, the numerator
of which is the amount of proceeds actually received by such Recipient and the
denominator of which is the aggregate proceeds received by Bluefly in the
Transaction. The portion of the Fee payable by the Recipient pursuant to the
preceding sentence shall be paid by such Recipient on the date of the closing of
the Transaction, by wire transfer of immediately available funds, to an account
designated by Allen.

Except for the payment of a portion of the Fee in accordance with the foregoing
paragraph, none of QIP, SFM or any of their respective affiliates shall have any
other obligation or liability of any kind or nature to the Company or Allen
relating to or in connection with the Engagement Letter. The obligation of each
of QIP, SFM or their respective affiliates with respect to the Fee as set

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forth in this letter shall be several and not joint and shall be limited to as
set forth herein. This letter shall be governed by and construed in accordance
with the internal laws of the State of New York, without regard to conflicts of
law principles. This letter constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof and supersedes all previous
negotiations, commitments and writings with respect to such subject matter.

By its signature below, each of Bluefly, QIP and SFM agrees to the provisions of
this Letter.
