How they do it: Apple offers its customers a wide variety of music in its iTunes store. Revenue with individual songs might be small but through the sheer mass of songs users download it generates a substantial amount of revenue.
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How they do it: Amazon is offering all kinds of niche products on its platform while ensuring that they are competitively priced. Hence it allows them to adress a big audience of potential customers through its wide offering and good prices, rather than few high margin products. Individual margins might be low but the sheer majority of transactions add up to a significant revenue.
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How they do it: By making their search engine universal and allow customers to look for anything in the internet, Google has become the leading search engine provider. It’s value proposition is to give customers exactly the search results they are looking for, no matter how small the niche. This leading market position supports itself as with a large enough customer group, the probability that someone has searched for a certain thing before increases.
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How they do it: Blockbuster, at the peak of its powers in 2004, operated about 9,000 stores globally. For the first Blockbuster store, $800,000 were invested in order to outfit the store and its movie title inventory. At its opening, customers were spoilt for choice, as the store already then made around 10,000 titles available for rent.
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How they do it: CDnow, Inc. operated an online shopping website that sold compact discs and music-related products. In 1995, it already provided listings for over 100,000 music CD and cassette titles via its website.
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