Abundance of the Long Tail
Excerpt from Millions of Markets of Dozens by Joe Kraus, co-founder of Excite.
57% of Amazon’s sales come from books you can’t even buy at a Barnes and Noble (to be fair, there is some skepticism around this number voiced here). This runs totally counter to the traditional 80/20 rule in retailing – that 80% of your sales come from 20% of your inventory. In Amazon’s case, 57% of their book revenue comes from 0% of Barnes and Nobles inventory.
The most interesting, transformative businesses that have been built over the last decade and that will be built over the next one are going to operate in and make money from the long tail. Google, eBay, Amazon, Rhapsody, Netflix, iTunes. What do they all have in common? They all work the long tail and they’re all radically changing the dynamics of their more traditional businesses.
JotSpot is a company that is building a platform to make it easy and affordable to build long-tail software applications.
If you don't know what the Long Tail is read the seminal piece by Chris Anderson in Wired who explains how this totally new, counter-intuitive business model works in the age of digital abundance.
Here are Chris's three rules for the Long Tail
1. Make everything available.
2. Cut the price in half. Now lower it.
3. Help me find it.
The ability of millions of markets of dozens is why truly customer-centered companies will win.
Posted by Jill Fallon on March 29, 2005 at 12:02 PM | Permalink | TrackBack