You probably know what your best sellers are on eBay, they may be the same as your top sellers on Amazon and your own website too, but , suggested that there’s just as much (if not more) money to be made from rarer slow selling products.
The theory goes that as online selling is very low cost in comparison to bricks and mortar stores the cost of holding large inventories becomes affordable. This is none more so than when the product is digital with no warehousing required. Retailers could make money by offering obscure products via the Internet as there would always be someone who would buy.
An article in today’s Times turns that theory on it’s head – far from being an almost endless source of products that buyers are searching for, the long tail has been found to be a derelict back alley, full of junk that no one wants.
According to the Times there are around 13 million music tracks available online, but 10 million of them didn’t manage a single sale in the last year. It’s even worse for albums, from 1.23 million available only 173,000 were ever bought with 85% failing to get a sale.
The long tail was lauded as an untapped gold mine where collectors could source that long lost item. That’s not proving to be the case, at least not for music downloads, where 80% of all revenue came from the top 52,000 (top 0.4%) tracks.
Where does this leave online sellers? The 80/20 rule has traditionally been accepted, 80% of sales come from the top 20% most popular products. The long tail suggested that the remaining 80% obscure products could generate just as much if not more income, each individual product may not sell as often but everything would sell a few.
It’s important to realise that there is always a cost to inventory, whether it be the cost of uploading and cataloging 10 million music tracks that no one will ever buy, or whether it be physical warehousing for slow moving stock.
The are definitely sales to be won from holding a wide selection of inventory but there’s also a big risk that relying on an ever expanding range to increase sales will probably end in failure. Someone, somewhere might buy that long lost track some day, but is it worth the cost of several million more sitting on the shelf gathering dust that will never sell?
Whilst it’s certainly true that you can buy almost anything on eBay, the question has to be asked do you want to sell almost anything on eBay? Would you rather stock and sell fast moving popular lines, or do you want to hold 13 million items, 85% of which won’t sell even once a year, to take advantage of the long tail?