Niche marketing is more than just a buzzword. According to Chris Anderson, Editor-in Chief of Wired magazine, niche marketing is both the internet's greatest strength and its long-term future.

Anderson has written a whole book on the topic, titled The Long Tail: Why The Future of Business is Selling Less of More. In it, he explains in great detail why and how the internet is creating a seismic shift in commerce.

In traditional retailing, when vast numbers of people all demand the same product, such as a hit movie on DVD, the costs of inventory, advertising and distribution can be divided proportionately among a high number of sales. Under this business model only the most popular products are profitable and therefore available.

Anderson argues that products that are in low demand, "long tail" products, can collectively make up a market share that equals or even exceeds the market share of popular products. He points to Netflix, whose on-line movie rental business has far lower costs than traditional movie rental stores. Netflix is able to make niche movies readily available and subsequently rents far more of them than "hit" movies.

In an article in Wired, Anderson cited research published in 2003, which showed that the then-perceived value of the internet to consumers was the ability to shop for the lowest price. The researches argued that the internet's greatest value to consumers was actually the ability to offer access to an increased variety of products.

While Anderson's writing about the "long tail" relates mostly to sellers of media such as movies and news, it can't help but point to a blazingly bright future for niche internet marketing of every kind. With the availability of easy and cheap web site software and the spread of RSS, internet entrepreneurs can quickly and inexpensively establish a means of distribution and find an audience. By developing multiple streams on income for a site, from drop shipping to affiliate sales to selling ad space, they can build a viable business offering consumers greater access to products. That's a marketing model where everyone wins!
 

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