“That shape is, to be clear, really, really weird. To think that basically everything you put out there finds demand is just odd. The reason it’s odd is that we don’t typically think in terms of one unit per quarter.
When we think about traditional retail, we think about what’s going to sell a lot. You’re not much interested in the occasional sale, because in traditional retail a CD that sells only one unit a quarter consumes exactly the same half-inch of shelf space as a CD that sells 1,000 units a quarter. There’s a value to that space—rent, overhead, staffing costs, etc.—that has to be paid back by a certain number of inventory turns per month. In other words, the onesies and twosies waste space.
However, when that space doesn’t cost anything, suddenly you can look at those infrequent sellers again, and they begin to have value.
This was the insight that led to Amazon, Netflix, and all the other companies I was talking to. All of them realized that where the economics of traditional retail ran out of steam, the economics of online retail kept going. The onesies and twosies were still only selling in small numbers, but there were so, so many of them that in aggregate they added up to a big business.”
Más Chris Anderson…:)
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