![]() With no shelf space to pay for - and in the case of purely digital services like iTunes, no manufacturing costs and hardly any distribution fees - a niche product sold is just another sale, with the same (or better) margins as a hit. ![]() What's more, these millions of fringe sales are an efficient, cost-effective business. And, again, that very, very big number is only getting bigger. ![]() These infinite-shelf-space businesses have effectively learned a lesson in new math: A very, very big number (the products in the Tail) multiplied by a relatives small number (the sales of each) is still equal to a very, very big number. in other words, the fastest-growing part of their businesses is sales of products that aren't available in traditional, physical retail stores at all. But what we do know is that the companies for which we have the most complete data - netflix, Amazon, Rhapsody - sales of products not offered by their bricks-and-mortar competitors amounted to between a quarter and nearly half of total revenues - and that percentage is rising each year. Whether it was latent demand for niche goods that was already there or a creation of new demand, we don't yet know. ![]() The act of vastly increasing choice seemed to unlock demand for that choice. “In fact, as these companies offered more and more (simply because they could), they found that demand actually followed supply. ![]()
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