21A – Reading Reflection No. 2
1. The general theme of this book explored the authors different theories. One theory discussed is how even products with very little demand are sold at least a couple times a year. This is seen when he talks about beat cast, which is a digital juke bow company. He said they offered around 10,000 albums on the digital juke box, and that every album sold at least once a quarter. These sales may not be a lot for each individual album, but they all add up to a niche market, which can outsell the main market of the few popular albums. Diving deeper into this you can look at two retailers such as Walmart and iTunes. Walmart has very limited shelf space so they can only sell say the top 100 albums of the year. iTunes, however, is digital with unlimited space can sell unlimited number of albums. Walmart would have to pay to expand the store and wouldn’t be profitable if they tried this. This is where he came up with his theory, that the future of business is selling less of more. He believes the smaller niche markets are adding up and selling more. Even if for example Walmart is selling more top 100 albums, the little sales from not popular albums on iTunes will continue to add up and may outsell Walmart. He also explores other theories and points to back this up, such as his long tail graph, where there is a “hit” which is the biggest initial sale of a product, but smaller sales are staring to look like they can out sale the hit, and that the hit in modern times are decreasing.
2. The book connected with ENT 3003, because in class we learn that we do not have to strive to be the next Elon Musk and become the next big thing. It is important to know that even small business is important, and a bunch of small sales can add up to be a lot.
3. An exercise that I would make would be to tell students to pick one of their favorite businesses and figure out if most of their profits are from a few good preforming products, or a lot of underperforming ones. For example, if you look at Netflix, do people mostly subscribe to watch a few very popular shows, or to watch many shows they may not be as popular.
4. I learned a lot about online retailing, and how they can take advantage of not being as limited on space than brick and motor stores. Like in the iTunes and Walmart example, I didn’t realize the importance of smaller sales and how they can add up into such a big market.
2. The book connected with ENT 3003, because in class we learn that we do not have to strive to be the next Elon Musk and become the next big thing. It is important to know that even small business is important, and a bunch of small sales can add up to be a lot.
3. An exercise that I would make would be to tell students to pick one of their favorite businesses and figure out if most of their profits are from a few good preforming products, or a lot of underperforming ones. For example, if you look at Netflix, do people mostly subscribe to watch a few very popular shows, or to watch many shows they may not be as popular.
4. I learned a lot about online retailing, and how they can take advantage of not being as limited on space than brick and motor stores. Like in the iTunes and Walmart example, I didn’t realize the importance of smaller sales and how they can add up into such a big market.
Dear Matthew,
ReplyDeleteThe book you reviewed seems very interesting, but I think you may have forgotten to put the title. I think the idea of how even products with very little demand are sold at least a couple of times a year is very interesting. I also agree with how this book can relate to ENT by illustrating the importance of smaller sales.