11. Small business and exploiting ‘The Long Tail’ on the web

Chris Anderson – along with Seth Godin and Malcolm Gladwell – has been among the most influential writers about how new media are creating new dynamics. As Godin looks at the nature of marketing and the change to ‘Permission Marketing’ and Gladwell looked at the dynamics of getting and exploiting a following on the web, Anderson in his 2001 book ‘The Long Tail’ looks at how the web has changed the nature of markets and product offering.

Anderson identifies the complete change to the traditional concept that you focus on your top lines and prune your range – as a large supplier – and the corrollary for small business, that you can now target the very small niche which, pre the world wide web would never have generated enough business to enable survival.

The new dynamic has overthrown the Pareto principle that 80% of sales will come from the top 20% of products (or of suppliers in a market etc) – he points out that 25% of Amazon book sales now come from products that are not sold by Borders Books – even though they stock 100,000 titles!

With the web, the product can be held centrally – or a small supplier can stock for a national or international demand – so phsically the logistics of supplying minority lines to the market are no longer impossible. What it shows is that there is demand there, and when the constraints are removed and all the small pockets of demand which were previously neglected are brought together, there is enough demand to feed a business.

So what possibilities is the web opening up for your market? What new niches are appearing that no one ever believed could exist?