Les Jones: Niche Markets in E-commerce

October 19, 2004

E-commerce > Niche Markets in E-commerce

Hard numbers on the incredible size of niche markets. Via Marginal Revolutions.

What's really amazing about the Long Tail is the sheer size of it. Combine enough nonhits on the Long Tail and you've got a market bigger than the hits. Take 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 implication: 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 (see "Anatomy of the Long Tail"). 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. Venture capitalist and former music industry consultant Kevin Laws puts it this way: "The biggest money is in the smallest sales."

Posted by lesjones

Comments

I use to work in the shoe business. I had to fight tooth and nail sometimes to get the right to carry some simple old out of fashion items, thick soled clunky wing tips and suede Hush Puppies for example. But you know what. While the Zodiac Pirate boot and the green (yes green) suede oxfords sat on my shelves until I got to sent them to San Fransisco or New York, I had to reorder the dum-dum (because your a dum-dum if you don't stock them)items every couple of months.
I think the future for music and books, at least recerational books, is in exactly this niche marketing. Think on demand publishing and downloads that allow an average book/music story to double the number of SKU's they carry but still carry the same total number of units. No massive displays of the "NEW BIG THING". These only waste money and space and are almost always discounted with in weeks/days of release. Plus think of the jobs that could be created by dispursed small production and shipping facilities, filling the stores as they sell out. Of course this would require store managers to be smart and seek out the most productive local niche's, or to even CREATE them!

Posted by: shawn at October 20, 2004