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Memo to Apple: Respect Your Resellers
An anonymous reader writes "As Apple opens more and more stores across the country (they are going to hit 88 by the end of 2004, according to top Apple retail honcho Ron Johnson), small independent dealers claim to be taking it in the shorts: five are suing Apple for all sorts of nastiness. Here's an interesting prescription for how Apple can make things right with its resellers and still open lots of shiny stores for the masses."
To the Apple store in the mall. There are probably several closer third-party Apple shops, but who knows who and where they are? The first thing that comes to mind is that glowing white, elegant store filled with all the latest Apple gear.
So, whether Apple is doing anything predatory or not, they could hardly help but displace the third-party stores.
What I'm listening to now on Pandora...
Yeah, guy in the article whining about 10% business loss would have lost 10% due to more competition (store locations) regardless of who is running them. Business is like life; adapt or die. WBM is not taught in business school as a means to success.
Have you ever BEEN to a non apple store? Its terrible. I'm in Richmond, Va, and we have 2 third party stores and they are terrible, they provide no service, and charge an arm and a leg.
Before we got our apple store my favorite reseeller was Compusa, how sad is that. Because the other 2 are so bad. If they want to compete maybe they should bring their Harddrive prices down a bit and memory prices, they price like apple. Its insane, $220 for 512megs of ram, and $180 for a 120 gig hard drive.
The other thing is the speed at which they get and stock their products. Not only do they get new products about a month after they are out, they don't even have anything in the back to BUY. They keep no stock on hand. You go to buy a powerbook and they tell you you'll get it in a week. WTF.
In my opinion the Apple Stores are just better, they may be doing some shady things, thats up to the courts to decide, but they are all around a better store for me, the customer. If the resellers want to compete, compete, not everything they have in their stores are controlled by an Apple price policy, get some deals inside, and don't charge me for a repair when my stuff is under warranty (another story for another time).
myRant.end();
As these smaller resellers are dying out, Apple needs to develop some smaller stores they can put in smaller markets.
I heard they were planning on developing small store fronts to put in college towns and campuses. This has yet to materialize. If Apple wants to reach more people they need to be where people are. These small stores need to be primarily showrooms where you can see the products and talk to a human. They should primarily just sell accessories and avoid stocking computers.
Amen. What's more, the Apple Resellers I've been to are almost invariably tucked into nondescript storefronts in nondescript commercial developments. They are, in a word, boring places.
I go to the Apple Store and it's fun. It's well-lit and aesthetically pleasing, the products are all out in the open just begging to be played with, and the staff are almost frighteningly professional and courteous. No cheap brown carpet, no bare metal racks, no random stacks of crap lying around, no buzzing industrial-grade fluorescent lights, no hand-written sale signs on orange starburst paper cut-outs.
I walk into an Apple store and it feels like a candy store for big kids. It's a fun experience. I walk into the typical Apple reseller and it's nothing special.
Which store would you rather frequent?
Obliteracy: Words with explosions
Yeah I'm kind of echoing what a lot of people here are saying, I have a little different spin on it though.
There are a handful of legendary Apple Resellers that I have heard of. Never experienced, just heard of them. For this handful of stores, it is a most unfortunate situation.
All of the resellers I have dealt with were complete crap. Bozo sales people that couldn't field the simplest questions about specificaitons. Service people "I think it's fixed", "OH, you wanted that data?", and my favorite: "you need to call Apple". (I maintained a school network of at first 8 Mac SEs, eventually over 100 i/eMacs and PowerMacs over a 12 year period, so I know)
Aside from my professional experience, I decided to purchase a PM/933 from a local reseller, rather than drive across L.A. or pay shipping. When I ran across the screen spasms (turned out to be a driver problem), first they blamed my non-apple display. So I bought an Apple Display (this time from the Apple Store btw). Problem persisted. I pointed out the 900+ post on the Apple discussion forums to the service techs. Still nothing. "You need to call Apple", from their top dog tech whom I previously had respect for. Why should *I* have to call Apple? I just handed them a small fortune for the system, shouldn't *they* call Apple? Wanna guess how many more dollars I spent there?
I'm sure before the Apple Retail Project came into conception, Apple had heard thousands of stories just like mine. They knew opening retail stores would piss off a bunch of people, people that had helped them stay in business. They knew they would be sued. They knew little soapbox nazis would cry out about the injustice of it all. They also knew they had no choice but to surgically remove the cancer that had been eroding the value of their brand for the past decade. It was a simple cost:benefit analysis.
Really, do you think the iPod would have smashed the competition without The Apple Store? I remember taking a trip to New York a couple of months after the iPod was introduced. One of the retail shops my family owns is 3 blocks away from the SOHO Appple Store, so I had a chance to hang out and watch the street. Everywhere I looked, white headphones, white headphones, white headphones. Funny when I went uptown, not so many white headphones.
cat
Apple Retail Stores. I was in a retail store not to long ago hanging around waiting for my wife to arrive. I saw no less than 5 different computer purchases walk out the door during the hour I was there. That was in one hour on a Friday afternoon. This may not be typical but I doubt it was their allotment for the month either.
Having said that, 10% profit is not bad at all. Compare this profit margin to other markets and see. The problems I have found with most resellers is like others have said. The stores suck and no one wants to go into them. There is a reseller's store literally less than 0.5 miles from my house but when I went to pick up my new 1.33 15", I drove 55 miles to Denver instead.
seSales, Point of Sale software for OS X.
I don't think anyone has an emotional attachment to CompUSA. These are Apple customers. They would continue to buy Apple products, but from either the Apple online store, Apple 800 number, or an Apple retail store. Personally, I did my research online, went to an apple retail store to look at their products, and bought my Powerbook either online or over the phone from Apple. Can't remember which.
Conserve Oil, Recycle, Boycott Walmart
I used to work at the largest apple dealer in the US, back in the 1980s. We took sales seriously, but this was before the computer market got commoditized, we could afford to have professional computer experts as sales reps. I don't know if that's possible today.
But when I deal with independent computer stores today, I am appalled. I was just helping a friend via email on buying a new iBook, he had an old iBook and wanted an upgrade. He went to a local independent dealer, they quoted him the same prices on the iBook as the Apple Store, but gouged him for upgrades. Like $250 for a 256Mb RAM stick plus $110 to install. They're insane, even an Apple Store RAM upgrade in a Build To Order machine doesn't cost that much, and BTO prices are a bit on the high side.
When I worked in computer sales, we used to call accessory sales "point builders" because you could sell a CPU cheap but build up the profit percentage (points) with accessories. But this independent dealer was way out of line.
In today's market, dealers are expected to make profits with service beyond the sale, but that's not going to happen with customers who buy overpriced accessories. They're eventually going to learn the true value of what they bought, realize they got a raw deal, and they're not going to be inclined to go back. Don't people know the most basic sales lessons? Your best customers are your previous customers. Keep them happy and they come back and bring their friends.
I have to say, the primary Apple reseller in San Antonio, ImagiQ (yeah, stupid name), has always been pretty helpful in my experience. It is a small store in a strip center, and definitely doesn't have the aesthetic appeal of an Apple Store, but they have 7 or 8 computers out there for you to play with, and are friendly and knowledgeable. One of the guys there is even a Unix geek.
However, even in this situation, which according to this thread sounds like one of the best, Apple doesn't have full control of the user experience. And that is what Apple is all about, right? Even if the Apple resellers were all great, how long could Steve be expected to tolerate that lack of control?
Maybe partying will help...
I agree with you completely... but the key is that most have blown it, not all. Some of the shops (god only knows where!) did do a good job, and did a lot to promote Apple through the years.
It could very well be that the margins drove the quality of the resellers down, which is a shame, but... not entirely Apple's fault.
FWIW, I buy most of my Apple stuff at the worst place of all... CompUSA... when the Apple store is two blocks away. As much as I hate the ignorance of their employees, I was never the kind of person to really like a boutique shop... for actually spending money.
But, you can't blame Apple... It's an image thing...
If resellers think that they can survive on a diet of iMac/eMac sales margins, overpriced memory upgrades and cables, then they'll die. Evolution. There's not enough margin in that kind of business unless you're freaking huge - and even then, CompUSA, Best Buy, and Circuit City all live on a razor's edge. The inventory management as well as investement necessary to have constant attempts to attract shoppers makes it difficult for a small independent to make money on low end consumers. PC shops usually only survive on a diet of repairs, upgrades, and fixing Windows (especially virus/malware infestations). The Mac market needs less virus/malware cleanups and historically, do less upgrades and need less repairs. Local PC vendors make no real money on the hardware.
Another way to look at this is that Apple sells everything at full retail with a pretty restrictive return policy and further, maintains a very limited selection of products. Plus Apple is paying the most premium rent you can imagine for retail space as well as maintaining a very high level of staffing. If you can't compete against that, then you don't deserve to be in business.
With that said, Apple does need to play fair - if they aren't, then Apple deserves to get slapped.
Basically, resellers need to know how to do the Value Add portion of the VAR acronym. That's having video and DTP specialists, having people on staff that can lay out a SAN and configure a complete server rack. People who can implement VPN, custom configure Mac OS X Server's SMB services, integrate Open Directory with Red Hat, etc, etc. In other words, the money is in the consulting and value add services in the professional and enterprise space for a small independent. Those kinds of resellers are plentiful selling Linux, Sun, Dell, HP/Compaq, white box servers, etc. However, many of the "legacy" Apple resellers don't have such expertise and have no prayer of getting to that point - so they will die. Evolution.
The Mac platform is in a very strong position right now. It's taken several years but finally the Mac is a strong platform with lots of third party support and momentum in the computer market. Seven years ago people weren't even sure Apple would be around to honor three year AppleCare warranties; today people are building supercompuers with Apple logos. The Mac is making a comeback in niche markets it largely lost to Windows-based workstations in the late 90s. It's also entering the Enterprise market and making a big impression in the big iron Unix world.
What VARs and Apple Specialists need to do is turn themselves into support services for these markets. They can continue to sell Apple's hardware but they need to start focussing on the words in their titles. Selling a school some eMacs is one thing. Selling them some eMacs and setting them up a central directory, file, and mail server with a hardware support contract is something else entirely. These sorts of services they can bill by the hour and guarantee with contracts.
Many companies only stick with Windows PCs because they don't think there's anything else in the world that can possibly work. Part of the job of the Apple retail stores is to provide a place where people can come see their products in action. VARs and SPs should go a step beyond that and really show businesses that they could save money or make more money by switching away from Windows.
I'm a loner Dottie, a Rebel.