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Long tail

Marketplace and Platform Models

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The long tail is a retailing strategy in which a business profits from selling a very large number of different items in small individual quantities, alongside a much smaller number of bestsellers sold in bulk, rather than focusing only on high-volume hits. The business application of the idea was popularized by Chris Anderson in an October 2004 Wired magazine article and his 2006 book The Long Tail: Why the Future of Business Is Selling Less of More, building on 2003 research by Erik Brynjolfsson, Yu Hu and Michael Smith showing how much of Amazon's book revenue came from obscure titles unavailable in physical stores. The model works when distribution and inventory costs are low enough that carrying many low-demand items remains profitable, and it underlies the economics of retailers such as Amazon, Netflix and iTunes.

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