80/20 Rule – Applies to Everything- Right?

Long tail of Delivery Service… Grace brought up very valid points about the mail delivery system and the long tail of the delivery business. I actually owned my own courier/trucking company and can relate to the hardships that FedEx is experiencing. The last 10 years of seemingly limitless business technologies (faxes, internet purchases) have really taken a toll on the mail system and other delivery methods. The decline of manufacturing and price of fuel in the U.S. are the main reasons I sold my company in 2006.

Anderson’s findings on the inaccuracy and misuse of the 80/20 rule were fascinating. I used Pareto’s 80/20 rule to describe parts of business many times. We used the rule to describe the volume distribution of client base- 20 percent of our business was in the printing industry, 80 percent was the long tail (advertising, record labels, graphic design, etc). We used the term when describing profits as Anderson said, and again with our types of services (80 percent were 1 hour deliveries and 20 percent were other services). Anderson made a great point when he said it was an overused and untried theory in many situations and I agree. I didn’t realize that you can apply it to anything and sound reasonably knowledgeable! There was a difference in our industry versus online retail distribution though. Our actual numbers were very close to the rule which is why we used it. I think it is also quite possible that we tend to look for patterns we are used to seeing and may come up with the example that fits the model we are looking for.