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.

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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.

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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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