The Business Book

208

T H E F U T U R E O F

B U S I N E S S I S

S E L L I N G L E S S

O F M O R E

THE LONG TAIL

T

he “Long Tail” theory

challenges basic principles

of economics. In the past,

successful businesses often sold

high volumes of a limited number

of products. Now, according to

author Chris Anderson, the future

of business is in selling less of more

—low volumes of an increasingly

large number of products.

A primary factor in today’s global

economy is the Internet, which is

shifting the focus from mainstream

products and markets—represented

by the “head” of the demand

curve—toward a large number of

niche or low-volume products and

markets, as seen in the “tail” of

the curve. A conventional demand

curve is drawn with price on the

Today, companies are no

longer constrained by

physical space or costs of

reaching their market.

...by buying

niche items from

online sellers.

They can now offer a

large number of niche

products to many

individual customers.

Consumers have

increasing choice and

want to express their

individuality...

The future of business

is selling less of more.

IN CONTEXT

FOCUS

Internet business

KEY DATES

1838 French mathematician

Antoine Augustin Cournot

produces a graph to represent

supply and demand.

1890 British economist Alfred

Marshall introduces the concept

of demand curves in his book

Principles of Economics.

20th century Most companies

sell a limited number of goods,

with the bulk of sales and

profits coming from their

top-selling items.

1990s The introduction of

the Internet proves to be a

disruptive technology that

changes economic and

social traditions.

2004 Chris Anderson coins the

term “Long Tail” to describe

the concept that a larger

proportion of sales is likely to

come from the tail, rather than

the head, of the demand curve.