The Theory of the Long Tail Model

The Long Tail model involves the idea that selling high numbers of few products is very costly. The cost of shelf space is vast and makes it more difficult to make higher profits on these products. The Long Tail model, coined by Chris Anderson, talks about how it is much more beneficial to a company to sell low numbers of multiple products. These products are typically not sold in high batches but due to the ability of the internet, you are able to sell small amounts of multiple products. Anderson argues that that this demand for less popular goods could even rival the demand for higher demand products. Customers are beginning to move away from these highly popular products and moving to more niche markets.

The rise of the internet is one of the biggest reasons for this model. As consumers we have the ability to get any product at any time. Doing this online also allows for cheaper margins for businesses. They do not have to spend the money to put these products on the shelves but instead can keep these multiple products in a warehouse. The internet has also thrived because of this model. Customers can shop from the comfort of their own homes and get these products sent directly to their home.

Many companies have benefited from using this model of business. One of these companies being Amazon. Amazon has the ability to offer thousands of products to their customers. Customers can even make accounts and have Amazon offer them products that are catered to them personally. Amazon stores all these products in warehouses and customers can shop their online catalog and buy whatever small niche products they want. Another company that offers this practice would be Etsy. Etsy offers handmade products that are made by regular people for regular people. Etsy houses each persons individual shops, and these people can offer whatever products they want. Many of these products are very niche. For example, Etsy has everything from handmade clothes, to handmade battle axes and swords. Customers have the ability to shop and buy whatever niche product they want. Overall, each of these companies brutalize this method in different ways. Both utilize it for the betterment of their company and the betterment of their pocketbooks.