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On many of my posts of the blog An Entrepreneur I have mentioned different Business Models that have been successful in Internet such as the Long Tail Model that big ones like Amazon have used. Let’s remember that this model sells a huge extension of niche products (even in addition to popular ones) that when they are added they might generate a high income. Internet has eased this because many of the operations have minimum costs such as showcases where an additional product in our platform has costs near to zero.
The model I have just explained has been applied not only by big companies but also by a lot of medium and small companies that have known how to exploit the benefits that Internet provides in order to reduce costs. In this way they can have an extended offer of products that includes obviously the niches.
The Long Tail Model and The Red Oceans
Today if we ask someone who wants to open an online store which model they are going to apply it is probable that many of them will answer that they will have a platform that offers many products that will be sold with low prices. However remember that even though Internet has many benefits when compared to the physical world, the long Tail model is not the only option you have for making businesses.
Definitely the mentioned model in which we sell niche products has diverse possibilities and even today applying this model might make us successful. However to the day many economic sectors have online stores that have been applying this model and many others will appear on the next years. The effect of this is that these markets are becoming more competed and they will be struggling in red oceans where they will only differentiate by price.
What I have just stated drives me to my principal thesis of this series of articles which is that the Long Tail Model combines with low prices is not the only way in which we can compete in Internet. Other way in which we can compete is by offering a First Class Service. This type of service is easily perceived in the physical world but it can also be taken to the Internet. In my next two articles I will present a pair of examples, which I hope they change your view about online stores.
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