Chris Anderson’s business bestseller, The Long Tail, is widely quoted and the term “long tail marketing” is now as ubiquitous as sustainable competitive advantage, value proposition, and the other business clichés. With this cliché status, the term gets abused and misused.
What Anderson meant is that there is a new economy that provides an economic incentive for firms to offer many personalized or niche products instead of mass market products. This new economy exists because of technological advancement in the supply chain including manufacturing and distribution, along with new efficiencies in marketing largely due to the Internet. Think of an expanded market where there is more opportunity for little products.
For example, look at this excerpt from his book at the market for books: “The average Barnes & Noble carries 130,000 titles. Yet more than half of Amazon’s book sales come from outside its top 130,000 titles. Consider the implications: If the Amazon statistics are any guide, the market for books that are not even sold in the average bookstore is larger than the market for those that are. In other words, the potential book market may be twice as big as it appears to be, if only we can get over the economics of scarcity.”
What this means is that that although books are still sold through the bricks and mortar bookstores, there are just as many books (and soon to be more) sold through the web stores. The economics of the books business is like the music business in that it is a “hits” business with an exaggerated 80/20 rule—for a book to be in the traditional bookstore it has to be a best seller or on its way to being a best seller. If a book does not sell well they ship it back to the publisher. It is a little known fact that 70% of the books shipped to the bookstore don’t sell and are shipped back to the publisher. Books are a very low margin business and now you see one of the reasons why. Books are heavy—just think of the shipping costs of going back and forth.
This means that the traditional bookstores cannot even think about carrying titles that sell in lower volume, so they are forced to overlook what is soon to be half over the total available market. This leaves half the market open to the online booksellers and self publishers like me.
Thus, to truly address the whole book market, booksellers have to adjust their channels of distribution, advertising, and promotion to reach the online buyers. This is why Barnes and Noble, Wal-Mart, and others now have on-line bookstores. This allows them to carry the other book titles that their customers want.
For a self published author like my self with a precisely targeted readership, I can skip the bricks and mortar stores entirely and do a respectable business on the web. I connect with my readers using Web 2.0 tools such this blog, web distributed articles, web-based PR tactics, pay-per-click ads, and word-of-mouth.
And it works!
John Bradley Jackson
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