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."

Comments

As a customer...

[Otter]

When the jack broke off my laptop power cord, where did I go? OK, in fact I sent my wife to demand a refund, but where did I send her?

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.

Re:As a customer...

[djtripp]

Since there is no Apple Store in Alaska, I did have to go to the local Mac shop to get a new Yo-Yo since mine died. Since they have a 1 year warranty from date of purchase, i called Apple, they faxed me my proof of purchase, and I went to the shop, and got me a new one for free (3 day longer and It would have cost me something). Apple vendors don't make much money from doing warranty repairs, especially if they are sent to Apple for the fixing. As for finding where the closest Apple shop that's easy, Store Locator. Support your local Mac shop, unless they are a bunch of egotistical idiots, then go to the most knowledgeable shop near you. (In my case, surprisingly enough, CompUSA)

Re:As a customer...

[rixstep]

So, whether Apple is doing anything predatory or not, they could hardly help but displace the third-party stores.

This is not true. A lot of 'mom and pop' stores have built up significant reputations in their community and companies in the area will go to them because they've accumulated quite the expertise over the years.

Going to an Apple Store is never going to net you expert help. The staff there are about as good (bad) as Best Buy and are paid comparatively.

Real professional resellers I know say their business has actually done better since the Apple stores, as the interest in Apple has grown and they still have the reputation, so people still end up contacting them for the big jobs.

Which is what I would do too. Our reseller is 'outtasite' and we might walk by an Apple Store, but we'd never buy anything there. Not only do we want to support the local businesses, but we know we get qualified help there - something we would never get at an Apple Store.

Service Calls

[Hungus]

From the article

Apple had previously referred service calls to CDS. But increasingly, Apple refers service customers to its own retail operations, claims Verga.

Being an AAST (Apple Authorised Service Tech) the Apple Store here in the Dallas area has allowed me to put business cards in the front desk. The stores don't do out of warranty work, so they encourage techs, VARs and solutions providers to list themselves at the stores. This being the case I really think these foxes are crying about grapes (imperfect Aesop allusion)

Have you been in a reseller's shop?

[ibullard]

Because I have. Five of them. They're all holes in the wall, at least thirty minutes away and you can walk around for half an hour before they'll even acknowledge your presence. Then they charge 10% more than Apple does on their web site.

I was in one where I walked in, started browsing around and was completely ignored by the staff. A pretty woman walked in about five minutes later and the salesman immediately asked what he could do for her. I was going to buy an external HD but since they couldn't be bothered to help me I couldn't be bothered to buy one.

It's no wonder they don't like the competition, they suck. Apple's stores are a world better.

Re:Have you been in a reseller's shop?

[American AC in Paris]

Because I have. Five of them. They're all holes in the wall, at least thirty minutes away and you can walk around for half an hour before they'll even acknowledge your presence. Then they charge 10% more than Apple does on their web site.

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?

Re:Have you been in a reseller's shop?

[Analog Penguin]

Word up, brother. I've not yet made it to an official Apple store, but there are three places in my area that sell Macs. One is this tiny little hole in the wall that looks like some guy's garage after an earthquake. There are random machines and empty boxes strewn about. The staff respond to questions with one-word answers. It's impossible to find anything, and you can't get any help. I gather their repair business is decent, but as a reseller, this does not make Apple look good. The other one has one or two gumdrop iMacs on a shelf in the back somwhere. The final one is our good friend CompUSA, where salesmen say things like "The Mac doesn't have enough RAM to run a two-button mouse, and anyway it uses a different format for the Internet so you can't talk to your friends." It has been like this for as long as I can remember. It was worse back when places like Sears were in on the deal, too.

It's not like Apple didn't give the resellers their chance. They've had their chance for twenty years, and most have consistently blown it. I'm surprised Apple put up with this shit for this long. I'm sure there are some friendly, helpful, well-organized places run by knowledgable individuals, and they have my sympathy, but I've certainly never been to one.

Re:Have you been in a reseller's shop?

[Trillan]

We have a couple Mac retail chains around here. One of them is exactly as you described it -- overpriced crap, ancient used Macs, only one or two modern systems in stock, one copy of Panther (which had been opened and installed by the staff on their personal machines), and rude to boot. The software was, nearly without exception, from two or three years ago.

The other is gorgeous. They usually have every model on display (last time I was in, they were missing the 15" Powerbook), set up in the same kind of way as a "true" Apple store. They've got a MIDI music station, an MP3 music station, a digital video station. The owner cut his teeth selling a batch of the original Apple computer. Most of the salesmen have been around nearly as long. I can ask obscure questions and they've got answers, and they know how to solve problems cheaply. When you upgrade, they clone drives at a minimal cost, and if they can't manage it you don't get charged.

Guess which store has gotten about $5,000 worth of business this year?

Re:Have you been in a reseller's shop?

[sdmacguru]

I've got to chime in on this. I'm a former employee of a local reseller in San Diego.
Would I want to be a customer at that reseller? Not really. Location is a warehouse in an industrial park, entrance is hidden on the side, merchandise is not super-well-organized, prices are not displayed on anything and all the customers, apparently, phone each other and come in at the same time. So the effect is that the sales staff is either completely bored out of their gourd or totally overwhelmed. Each of them wants to give their full attention to their customer, which is good, but if you aren't the customer in front of them, you don't get any attention.
Additionally, they consistently fail to deliver on promises. Some of this is due to cash flow issues (c'mon, they're a small business). Some due to Apple filling orders TO THEIR OWN STORES before shipping constrained product to resellers. That's just rotten, but it happens with every new product. Sometimes due to the personnel involved: these people are Mac fanatics first, sales and service second. Their heart is in the right place, but the professionalism can be lacking.
Lest you think I'm just dishing on an old employer, I'll say this about that. I didn't really do a lot to bring up the level of professionalism, myself. And I really liked the people I worked with, all were decent folk. I wish them well, but man, the cards are really stacked against them and not getting better.
Here's the deal: without these front-line risk-takers throughout the 90's, I don't think Apple would be here today. Seriously.
To have Apple fail to figure out how to work with resellers after all these years is inexecusable, to have Apple kill off this channel of sales is really, really awful. Yeah, it's business, but it just seems like corporate has to take more responsibility for the success of their resellers and they have to understand that they are burning a bridge they've been using for years if they do kill off resellers.
Wish I had an answer, all I have is some experience.

Apple does it better

[Whatchamacallit]

I've seen a few Apple Dealers and frankly, they are out of their league in regard to competing with the Apple store(s).

I purchased my first Apple in an Apple store after having first visited two Apple Dealers. I was amazed that unlike Gateway Country stores or even the dealers I didn't have to place an order and wait for delivery I could actually walk out of the store with product in hand!

Apple's store fronts are stocked with just about every product. (minus very new products that haven't shipped yet) Their sales people are knowledgable and helpful. The store layout is excellent, you can actually find what you are looking for.

The Apple Dealers are going the way of the DoDo and they are lashing out in frustration. The only way they can survive is to offer additional services that Apple doesn't offer. i.e. custom development, onsite service, etc. They need to build niche markets and pursue them. This means they will need to do more then simply buy and resell Apple products.

The Apple Dealers have been dwindling for years and the whole reason Apple started opening the stores was to create market visibility in the nations shopping malls. The death of the x86 Clone Mom & Pop shops is now befalling the Apple Dealers.

The Dealers may have been responsible for 50% of the Apple sales in the past but that is going to move to the Apple store fronts. Apple is expanding in many ways and the dealer base is simply not large enough to handle to increase.

Some ideas for Apple Dealers:
- Work with Graphics, PrintShops, and Sign makers.
- Create a POS (point of sale system)
- Create inventory systems
- Physical Asset management systems
- Etc, Etc. bring the Mac into new ventures.

Apple stores are just better

[seven5]

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();

Apple needs a small store strategy

[Johnny Mozzarella]

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.

Warranty defaults to date of manufacture

[clem.dickey]

Apple started my PowerBook warranty from the date of manufacture. What else could they do? They had no way to know when the retailer sold it to me. They did change it to date of purchase after I faxed them the dated receipt.

What MacAdam is complaining about, I think, are (a) the unrealistic default start and (b) hassles with Apple process to adjust the start to "date of purchase." And on those points I agree. No retail venue short of a used car dealership places as much bureacracy between itself and its customers as does Apple.

Bottom line

[coolgeek]

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.

I agree

[jivemonkey]

I am an apple reseller. I work for a campus store where we sell Apple computers and a few other things here and there. I can't count the number of sales we have missed out on because we don't keep them in stock. But, being the size we are, we really can't afford to buy a bunch of computers and hope that people buy them. And with warrenty stuff, we can't even help people. If I can't fix it by myself really easily, I have to say "Here is the number, you will have to call them." And, I have to have a smile when I say it. It does't work. It would be fantastic if we could have a nice Apple front and have some things in stock, and a Genius Bar would be awesome. I know a lot of people who could do the job.

Just bought an iMac

[Rudy Rodarte]

I just bought an iMac 2 Saturdays ago here in Austin. I had done all the research myself and I knew exactly what I wanted, but I waited until the Apple store opened up before buying? Why? I just felt better about buying there than from Fry's or CompUSA. Plus, I met the Mac Geniuses that would be taking care of me, if I ever come across something I can't fix myself.
All in all, it was a better customer experience, if you ask me.

did anybody else catch this?

[frankmanowar]

By alienating folks like Verga and Armes, who have been the backbone of Apple's distribution network for the past 30 years

I read that, blinked, checked my calendar, and sho' nuff, it hasn't been 30 years. It's hard to take gratuitous embellishment seriously.

being an apple reseller.

[Anonymous Coward]

For the record, I'm an apple tech. Desktop and portable. I've been doing this job for years, and I've ALWAYS worked for apple specialists. And, I'm somewhat on the fence regarding all of this.

Having worked for specialists, I've learned more about the mac, and this niche market than I ever thought I would. Back before the Apple Retail Stores, there were the catalogers, and the independent dealers. Within the dealers, there were resellers, and specialists. Resellers were places like CompUSA, etc who sold macs, along with everything else on the planet. Then, there were the specialists. The SP's were all mac. It was their bread and butter, their primary focus. They took care of it all. And today, despite the retail stores, we still do.

As an Apple Specialist, we're required to perform in and out of warranty service, staff certified technicians and a technical coordinator, perform in and out of warranty service, and we participate in Apple's Direct Dispatch program. All of the people I work with have been doing this as long as I have and longer. My owner can quote old beige system specs from memory, and can fix the antiquated dinosaurs that show up from time to time, with no problems. Me and my other techs can play "Name That Screw" which consists of picking up a screw from a machine, and being able to name not only every machine it goes into, but how many of that screw there are. (yes, we're huge nerds) My guys can go out on apple dispatches and repair machines onsite, and even correct the Apple support people when they send the wrong parts. My sales guys know what works, what doesnt, and how it all goes together. Similarly, we run our stores on nothing but mac's. Our point of sale stuff is mac based, along with our databases, and the like.

The problem however is cashflow, and it isnt all related to the Apple retail stores. Its a hard time to be a small dealer in the computer industry in general. Profit margins are very, and I mean very low. hypothetically figure that we buy an epson printer from ingram micro or tech data (the wholesale channels for retailers) and we spend $70. then, we have it shipped to our store. thats another $15. we're at $80. Epson is selling them for $79, and CompUSA bought a pallete of 1000 of them and is selling them with a $30 mail in rebate. Epson makes pure profit, Compusa gets a bulk discount, and we break even. Dont think there's much margin in machine sales either. There isnt. Apple is selling volume. Thats where their money is. The specialist culture grew up around selling the machines they love, fixing them, and offering the high end support that goes with them. All our money is made in services and third party items we make some margin off of. So, no matter what computer hardware your selling in a small shop, it's not easy.

As far as the Apple retail stores go, I find them very pretty, and they have a lot of stuff. And I commend that. It brings brand awareness to the platform. However...They tend to have a very high turn over of employees from what I can see thanks to the tysons corner and clarendon stores. Their sales people have a functional sales knowledge, but if you get over their heads, they automatically send you to the geniuses. The geniuses get two weeks training before they're put to work. Wow, thats a lot of training. I've spent ten years developing my skills. Unfortunately, I've also encountered times when the geniuses were backed up 6 deep with people waiting to be helped. I've also encountered instances where Apple told customers that they couldnt and wouldnt fix their machines, and that they should buy a new one. Yet, when they brought it to me, It took me about an hour, with a part I had in stock, to repair their our of warranty G4 Tower. (digital Audio machine)

I see things from both sides as I'm a consumer and I'm an employee of a Specialist. I love the Mac. Its the only computer I own. Thanks to the mac, I have a career, and a job I love. I could go corporate, and I could go apple. But corporate means wearing a tie, and Apple offer