Leveraging the long tail with eBay

Leveraging the long tail is about exactly that, using the extreme popularity of generic products available on the internet that sell in high volume and levering that strength to expose more specific niche products that do not sell nearly as well with only limited popularity. The beauty of the “long tail” is that there are  a lot of these niche products – in fact they make up the majority of shop fronts on the internet.

Leveraging the long tail

Chris Anderson’s economic model of the Long Tail discusses the now diminished need “to lump products and consumers into one-size-fits-all containers”. With now infinite shelf space, low cost of materials and production courtesy of the internet, businesses are realising it’s simply a matter of exposure. So, how best do you leverage off the popularity of the best selling products on the internet? How are businesses able to sell their niche products that suit only very limited clientele and stay afloat? Remain profitable?

Tim O’Reilly outlines the best practices for leveraging the long tail in his seventh web 2.0 pattern, and this week I will examine eBay, the most popular online retailer in Australia an excellent example of these in effect.

ebay

Build on the driving forces of the Long Tail

eBay allows its users to list almost anything for sale relatively cheaply and with a minimum of fuss. It caters for almost any item allowing listings limited only by the imagination of its users facilitating an almost innumerable product base. Customers are drawn to eBay by cheap prices, the chance to win at auction or buy outright and possibly, most enticingly,  by the possibility of finding that item that they just cannot find anywhere else. eBay delivers hits to niches by first drawing in clientele with extremely competitive pricing for popular, generic products then offering then facilitates niche sales by custom tailoring searches for maximum exposure.

Use algorithmic data management to match supply and demand

Whenever an item is bought, whether is is via an auction, fixed price or classified sale, eBay displays similar items for the buyers perusal. When a buyer is searching for an item that is possibly generic in nature and arrives at a specific sellers page eBay displays all other items available by that seller. A user could be lead down a very niche path from seller to similar items (and repeat) until the ideal item is found. It is possible for a user to search for an item only once, then 10 sellers and different stores later – eBay delivers the final desired result specifically tailoring the list of item results to the user at every stage.

ebaystore

Use an architecture of participation to match supply and demand

eBay offers a feedback system where sellers can be ranked based on their past performance and quality of their items which allows buyers to always make informed decisions and purchase with confidence. When a search is carried out items are listed in an order of relevance to the search term by default so ideally the user receives the best matching item as the first result. In addition the results may be further sorted by the user selecting a relevant filter such as (lowest price first). If eBay does cannot return the exact item the user searches for it returns similar items in order of relevance.

Leverage customer self-service to cost effectively reach the entire web

eBay affords the user complete control of their accounts. User are able to list an item for sale on eBay in a matter of minutes (or seconds with the right app) through not only the website it self but also through many third party applications and the mobile apps. Users are able to purchase items, pay for items, and record feedback all from their very own account centre with the knowledge that eBay guarantees safety through PayPal where money can be refunded if a seller is fraudulent. The live chat support feature, extensive support articles, customisable user portals, and readily available API for developers contribute to reduced costs of operation.

ebay2

Leverage the low-cost advantages of being online

The filtering, aggregation and search features offered by eBay for its 112.3 million users in conjunction with the self service model it is based on ensures that it reaches to the very edges of the spectrum of user interests and is coded appropriately to be effectively integrated into external searches. Indeed, it is so good that an item typed into a Google search box can yield a relevant result from eBay. Further, eBays involvement with extensive partner organisations ensures that advertising and marketing costs are kept to a minimum.

Further Reading:

Debating the long tail

Long Tail 101

Rethinking the Long Tail Theory: How to define ‘Hits’ and ‘Niches’

What does niche marketing mean?

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7 thoughts on “Leveraging the long tail with eBay

  1. Hi Adam,

    It is true that with online shops being the way of the future and a great alternative for many start up ideas, leveraging the long tail is a big part of it. One issue that you have pointed out is getting the exposure. While a person might have a niche market or product, it would be hard to gain presence. eBay does help niche items to be sold and noticed by potential buyers. One thing that I find is done very well on eBay is the suggestive algorithm that is able to search through the vast database of products and find great alternatives.

    -Sukshan

  2. Online auction sites and e–stores have been the major contributor to what is now essentially a global economy and forced traditional retailers to become more competitive and update their business models to prevent them from falling behind, which has lead to consumer controlled market place on a global scale.

  3. Hi there,

    eBay is a fantastic example of this pattern. Every single product that I want I can almost always find on eBay. No searching around on the internet, no finding the local paper, I just go to http://www.ebay.com.au and 99% of the time I’ll find what I found.

    I remember the days before eBay when you had to buy something it was a real hassle, eBay is just a fantastic way of purchasing things online easily and being able to utilise a feedback system to know which sellers are trust worthy makes me a lot more confident in using an online buying system.

    -Jeremy

    any comments made to my blog are appreciated 🙂
    http://tseychen.wordpress.com

  4. Hi Adam,

    Do you believe in 25 years time there will still be a place for physical stores? If so, which stores do you think will survive? Would it still be profitable for stores which face large online competition such as Rebel Sport to hold physical stores?

    Also, why is it that Ebay has championed the online auction industry all over the world? Is it because it has implemented a specific best practice much better than other competitors? I believe it is because they entered the industry very early and in the process gained many first-mover advantages.

    Thanks,
    Felipe

  5. Hi Adam,

    Quite impressive that you have chosen ebay to elaborate this pattern. Ebay is one of the largest sites that provides every possible solution to the needs and demands of every single individual who is interested in online selling and buying of a commodity. It is quite useful for customers to get information on cheap products available to them online. Process to drag various driving forces is a helpful technique that can help marketers to effectively sell their products to respective target customers. Information on low cost products with high quality can attract a large pool of customers. These are all the pros we all know but still there is a huge amount of negative feedback from the users about ebay, have you researched why is this so?

    P.S Please visit my latest post: http://hussain69.wordpress.com/2013/05/13/tumblr-lightweight-models-cost-effective-scalability/

    Regards,

  6. Hi Adam,

    ebay is an amazing example that relates to this pattern, and it is an amazing website to shop online, yea people nowdays they turned to look after the stuff that they are interested in through an online shops such as ebay. Great post thanks

    Karim

  7. Thank you for such a good post.
    Ebay is a typical example of applying the pattern of “leveraging the long tail”. Actually, we can find everything on Ebay. With the excellent algorithm and hardware, it is possible to optimize the search result according to the history and user habit. All stuff in Ebay looks so perfect.
    By the way, do you know Etsy? It is an online shopping site similar to Ebay. Although it is not as strong as the Ebay, it does have some unique features when comparing with Ebay. Basically, Etsy more focused on Niche items such as handcraft and art works. It kind of market more about “small products”.
    Feel free to check out my post that discussed about the Etsy.
    http://randolphparkcv.wordpress.com/2013/05/08/leveraging-the-long-tail-etsy/

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