Long tail is the idea of Chris Anderson that was posited in the October 2004 issue of “Wired” magazine that suggests that the online marketplace is drifting away from mainstream products and moving towards niche products. New retailers in the ecommerce business will often find it easier and more cost-effective to focus on products within a niche.
When setting up an eCommerce store that does not have a physical presence, selling a wide range of products is impractical due to storage space. By selling one product in a niche to a particular market you will save on both set up costs and overheads for your venture. Research has shown that consumers are increasingly moving towards niche products specifically tailored to their needs, rather than generic mass produced items. They are also willing to pay more for a quality niche product, which means smart retailers can actually increase their profitability by selling a smaller number of tightly focused long-tail products, rather than trying to sell everything for everyone. Long-tail products also have lower distribution and marketing costs for the most part, increasing profitability even further.