Guy Kawasaki, who is one of the best bloggers (and, of course, bestselling author) on business tactics, has a great post of prescriptive advice for people building Long Tail businesses. Here are three of his nine rules, which together make a key point: Long Tails emerge when you can lower the cost of offering products and services. And the lower the cost, the longer the tail.
Near-zero inventory carrying costs. If you plan to sell a few units of lots of things it can’t cost you much to keep those things in inventory. This is separate from the cost of production. It might cost Ferrari a lot of money to make cars, but if it will consign them to you for free, what do you care?
Actually, you do care: there’s warehouse space, insurance, and shrinkage. Even digital content like music, movies, ringtones, and photographs require bandwidth and storage. Not only must the product be cheap to make, it must be cheap to keep in inventory.
Near-zero selling and marketing costs. Long-tail products must either “sell themselves” or external people must sell them for you. If you have to send one email or take one phone call to sell a Cecilio and Kapono ringtone, you’re dead. (Don’t know who Cecilio and Kapono are? That’s the point.) This is where two cool concepts butt heads: long-tail versus wisdom of the crowd. The former says a market of one is good. The latter says that when lots of people buy something, it’s probably good. How then does one person find something that’s good for her out of the millions of products to buy when there’s no crowd to follow?
Near-zero support and training costs. Do you see a pattern developing? One support call or email, and you’re dead too. Your offerings must either require near-zero support and training, or other people must support it for love and glory.
You'll also like his poll (below). Are you surprised by the results?