The Long Tail to Grow Your Business

Every now and then I read a book that seems to forever change they way I view things.  One such book is The Long Tail, by Chris Anderson.  I probably first picked the book up a little over three years ago, and like a good novel, it kept my attention from beginning to end.  As I look back, it is very much a book about how to create business growth and business improvement through seizing opportunities.

What Is the Long Tail

In a nutshell, the long tail is a focus on micro-markets.  Mind you, the definition of a micro-market is a somewhat of a relative term, but suffice it to say that a micro-market is small in comparison to competing products in the same category.  In his book, the classic example is’s focus on books that sell very few copies compared to a best seller.  But, what Jeff Bezos of Amazon realized was that the internet gave him an opportunity to profit from selling books a traditional bookstore or megastore would not stock (more on that later).  He was selling more products in smaller quantities and making more than if he focused only on the most popular products.

So What s the Opportunity

Your may be limited in what you can sell and stock because of several reasons.  First, you simply cannot afford to stock everything your customer might want.  Second, nearly every business if limited in the amount of storage space for inventory, and to rent additional space cost money which they don’t have.

So what do you do if your customers want something you don’t stock?  This is where the long tail comes into play.  Let’s get back to Amazon to clarify.  Do you think Amazon stocks all the items they sell?  No way.  If you have bought from Amazon you have probably noticed that items ship from various vendors.  Amazon is getting some percentage of the sale but it does not have to stock everything itself.  This arrangement works to the advantage of Amazon, allowing them to offer a wider selection of products without stocking everything, and to the advantage of small providers who get an outlet for their products through Amazon.  It is more than a win-win.  Not only do Amazon and the provider win (a win-win), but the customer also wins by having a wider selection from which to choose.  It’s a win-win-win.

Now think about your own business.  Are their products your customer may want, but not often enough to justify keeping in stock?  See if your supplier can drop ship for you.  Sure, you may have to take a lower profit, but it will be profit you weren’t even getting.  You can also work similar deals with related companies in your basic industry.  Some of these companies may sell products you don’t stock and you may sell some they don’t stock.  There is an opportunity to work together referring business to each other for a percentage of the sale.  It may be possible to even work out a drop ship arrangement with other companies.

Is this something you could do to grow your business?  Before you say “No”, remember that this is an opportunity that really requires very little capital investment on your part.  It is mainly being open to the possibility and being willing to invest some time.

Should you like to know more, contact us at: AimCFO – Contact

As always, your comments are welcomed.


Leave a Reply

Enter your email address:

Delivered by FeedBurner