Long tailed Pegasus.

Yesterday was one of those days that made me feel good about my planning.

It was a relatively slow day, and I had 5 or 6 regulars in the store buying between 5.00 and 20.00 worth of stuff. In the old days, that would've been it.

Ouch.

Instead, I had about 7 other groups in, families or couples. All of them the kinds of people who ordinarily don't spend money. Half of them were behaving in ways that had me grumbling in my beard.

But my "Buy-dar" must have been off-kilter, because each of them walked up the counter with a 30.00 to 50.00 purchase, and I ended the day at slightly over average. Even more satisfying was that they bought unique and one-up (one of a kind) type items that I won't be replacing. Pure profit.

Score!

(By the way, did I invent a new word? Buy-dar? Googled it, but nothing pertinent came up.....)

DIVERSIFY, DIVERSIFY, DIVERSIFY.

I've been trying to figure out why I've continued to sell enough, despite the slowness of the buying climate, to meet my goals. It's becoming very clear to me that my attempts at diversity are paying off even more than I thought they would.

It isn't just the diversity, it's that I have core stock in each category, that makes them viable. Having such a broad selection of pop culture items, allows me to experiment with things that don't quite fit.

DIVERSIFY OR DIE.

Having eight or ten different product categories, depending on how you count them, allows me find innumerable connections, carrying product that may not fit strictly in any one category, but which still don't seem out of place.

ONE-UPS.

I have tons of one-ups, single items that are unusual and single and fit into categories only in a general way.

I bought them because:

A.) they were singles and I didn't have to buy in quantity.

B.) they were on Liquidation Sales.

C.) they were unusual and off the beaten track.

In the normal course of events, you'd think I'd want to avoid this kind of product. After all, I never know if there is a constituency for them -- indeed, if anyone is interested all.

EVERYTHING SELLS EVENTUALLY.

But what I find is, EVERYTHING in the pop culture that is produced, HAS a constituency, even if it's just one a year. Enough one-ups, and enough visitors, and you may sell several each day to those once a year persons.

It certainly runs counter to the common adage that you should clear out everything in the store that doesn't turn over fast. There is a theory that partly explains it -- the long-tail retail theory (A Wiki explanation below the rest of the post....)

THE LONG TAIL.

The long-tail theory is usually applied to outlets like Amazon, but I think there is a small specialty store analog.

1.) We are "niche."

2.) We sell small quantities of a relatively "large number of unique items."

3.) We have "hard to find items."

4.) We have our version of "negligible stocking costs" by buying as much as possible "on sale" and finding a way to keep them in stock long after their usual selling period.

5.) We may not have a "large population of customers", but we do have a high foot traffic downtown location, and we have stayed in the same spot for 30 years, so we have a backlog of possible customers.

AFTER ALL, WE AREN'T WALMART.

And it also seems rational to me not to compete with the stores that sell large volumes of the top "20% of items.

WHEN IT'S SLOW, STICK TO ESSENTIALS????

The temptation is to cut down on these types of items and stick to the 'evergreens' and best sellers, but I think this would actually be the wrong move. I'm noticing, if anything, even more interest in the unusual stuff. Not sure why that is, but I'm selling a higher proportion of one-ups, which almost but not quite compensates for lower sales on my usual best-sellers.

NOW IS THE TIME TO STRIKE.

Plus, helping me in my decision to keep stocking slower sellers, is the fact that there is more of it "on sale" than ever before. I've seen some absolutely great art books that are a fraction of the cost, and I've been buying multiple copies while I can. They may not sell fast, but they sell steadily.

It also helps that I've had some experience during the boom times of selling this kind of one-up product, and knowing -- in general -- which items to take a chance at, and at what margins. (Slower items with larger discounts, or faster items with smaller discounts.)

BESIDES -- IT'S FUN.

And most of all, it keeps things interesting and challenging, but doesn't cost too much. One-ups, on sale. As long as you know your product, that kind of diversity can only help.

**********

The Long Tail
From Wikipedia, the free encyclopedia

An example of a power law graph being used to demonstrate ranking of popularity. To the right is the long tail, to the left are the few that dominate.

The phrase the Long Tail (as a proper noun) was first coined by Chris Anderson in an October 2004 Wired magazine article[1] to describe the niche strategy of businesses, such as Amazon.com or Netflix, that sell a large number of unique items, each in relatively small quantities. Anderson elaborated the Long Tail concept in his book The Long Tail: Why the Future of Business Is Selling Less of More.

A frequency distribution with a long tail — the concept at the root of Anderson's coinage — has been studied by statisticians since at least 1946.[2] The distribution and inventory costs of these businesses allow them to realize significant profit out of selling small volumes of hard-to-find items to many customers, instead of only selling large volumes of a reduced number of popular items. The group that purchases a large number of "non-hit" items is the demographic called the Long Tail.

Given a large enough availability of choice, a large population of customers, and negligible stocking and distribution costs, the selection and buying pattern of the population results in a power law distribution curve, or Pareto distribution. This suggests that a market with a high freedom of choice will create a certain degree of inequality by favoring the upper 20% of the items ("hits" or "head") against the other 80% ("non-hits" or "long tail").[3] This is known as the Pareto principle or 80–20 rule.

The Long Tail concept has found a broad ground for application, research and experimentation. It is a common term in online business and the mass media, but also of importance in micro-finance (Grameen Bank, for example), user-driven innovation (Eric von Hippel), social network mechanisms (e.g., crowdsourcing, crowdcasting, Peer-to-peer), economic models, and marketing (viral marketing).