The long tail business model

The long tail is a common retailing concept which describes a specific commercial strategy. This niche strategy will focus on selling a large number of products but in relatively small quantities. The opposed strategy is focused on selling fewer products but in larger quantities. People have developed the "long tail theory" which claims that our culture and economy is progressively shifting from a focus on a relatively small number of products toward a huge number of niches in the tail.

The term “long tail” refers to the orange part of the chart above, which shows a standard demand curve that could apply to any industry. The vertical axis represents sales while the horizontal shows the variety of products. The red part of the curve is the “hits”, which have dominated our markets and culture for most of the last century. The orange part is the “non-hits”, or niches, which is where the new growth is coming from now and in the future.