The long tail theory subverts the 28 law

the largest bookstore in the United States, Barnes and Nobel (Barnes & Noble) has 130000 types of books and commodities, basically covering all major book categories. However, more than half of the books sold by Amazon Co, the world’s largest online bookstore, are from outside of these 130000 books.

, according to statistics, in 2004, Amazon sold books, 57% of the varieties are Barnes and Nobel, these shops, bookstores do not have books. The market for books that are not sold in everyday bookshops is even larger than those sold in regular bookstores. It was based on these findings that Chris, ·, editor in chief of Wired, Anderson, proposed the "long tail" theory of the Internet business model in 2004.

Internet Co’s "long tail" model

Anderson in the "connection" magazine’s 2004 tenth cover article "the long tail" (The Long Tail) in such a definition of "long tail" market – as long as the storage and distribution channels is large enough, demand or poor sales of products to occupy market share, can and the number of goods sales occupied the market share of the rival, and may create greater profits.

we all know, in the traditional business model is a classic "28 rule", namely the 20% products can bring 80% of sales, while the other 80% products can only bring 20% of sales, and this part of the products can hardly bring profits for the enterprise. Anderson studied sales data from Internet retailers such as Amazon, Rhapsody, Netflix and so on, and compared them with WAL-MART and other traditional retailers. He found that in the Internet’s "long tail" market, 90% of the products are not available in the traditional market, they can contribute 25% of the company’s sales and 25% of the profits. In other words, in the traditional market can not earn money products, in the "long tail" market has brought 50% of the profits.

many of the new Internet Co shifted their attention from the head of the consumer demand curve to the tail". The demand curve in the "head", some popular market products in the mass market with very high sales volume to be sought after; and in the demand curve "tail", sold millions of different types of goods. Market segments in the tens of millions, every kind of goods are only in service a small amount of consumers. In addition to the surge in commodity categories, information about products has also exploded (chart 1).

in the long tail market, consumers use computers and PDA and other personal devices to access the network, browse and search for product information, buy advice, and then place an order. Sellers use the Internet to minimize transaction costs, and through complex software applications, according to consumers themselves and similar consumer groups