What is "The Long Tail"? To put it simple, let's assume the following graph as Amazon's selling items in decreasing order of popularity along the horizontal axis.



The head of the graph (green area) are the most popular items, while the tail (yellow area) consists of MANY lesser demanded items. The Long Tail concept is that the internet is pushing demand away from the head to the tail.

As opposed to the Pareto principle of 80% of the sales come from 20% hits, sales volume in the tail can collectively make up a market share that rivals or exceeds the head's. In Amazon's case, a significant portion of their sales come from obscure books that are not available in brick-and-mortar stores.

This is one of the major reasons why Amazon is such a success. Similar success stories leveraging on The Long Tail concept are Netflix, iTunes and even Google, who aggregates the long tail of advertisers with its AdWords.



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