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gizo
5th November 2004, 11:29 AM
Hi there....

I was just pondering, how all Apple resellers are priced the same, there doesn't seem to be anyone offering cheaper prices to increase sales (other than a few who discount a tiny $50). So it got me wondering, is it:

A - Cost price is actually high (unlikely, due to need for profit to live)
B - Apple enforce strict pricing regime (to uphold value of image/brandname)
C - None of my stinking business

I'm personally hoping it's not C, and also secretly hope for an option D or E or something unthough of by my tired head.

cheers

Disko
5th November 2004, 11:37 AM
A, B & maybe C. :)

*moves to apple tech*

MightyAtom
5th November 2004, 02:05 PM
Originally posted by gringo@Nov 5 2004, 11:29 AM
A - Cost price is actually high (unlikely, due to need for profit to live)
B - Apple enforce strict pricing regime (to uphold value of image/brandname)
C - None of my stinking business
Yeah like Disko said it's pretty much all three.

I doubt you'll find a reseller commenting on this, I believe their contracts with Apple prohibit discussing it.

If I understand correctly the margin on most Apple products is extremely low, about 10% or less. I'm also pretty sure their reseller contracts prevent them from advertising products below RRP though they can still sell them below RRP, it would just kill any possible profit.

adamjc
5th November 2004, 03:15 PM
I was on the phone earlier today with a reseller discussing the powerbook on edu pricing, and she said that they only make 2% on edu pricing. Not very much really.


-adamjc

Comet
5th November 2004, 06:00 PM
I'm pretty sure the resellers gain the same amount of profit selling to educational customers as they do with their normal customers. Else, what insentive do they have to selling educational?

adamjc
5th November 2004, 07:23 PM
Im not sure Comet, im just going by what she told me.

I would be interested to know the exact amount that a reseller can earn!

I wonder if it would be a sliding scale, i.e. the more they sell the more they earn?


-adamjc

symean
5th November 2004, 07:46 PM
From what I remember Apple resellers average about 10% profit mark on hardware. An Apple reseller could not survive on Apple hardware alone, they must sell software, peripherals, accessories and service/support to survive. I remember when the cheapest CRT iMacs were around the $1600 mark, resellers made about 7-8%, and that's if it sold at RETAIL price. I felt sorry for customers who assumed the shop could knock off $100 from the price if they paid by cash...often we made $50 profit on an iMac. High end hardware was a little more generous, but still not the high profit margins customers THINK Apple resellers make.

Also now, resellers must make certain targets on selling AppleCare, .Mac and similar products or else they lose more profit - that's right: part of their 'profit' is dependant on reaching such targets! I think it's given to the reseller as a credit against their account with Apple, or something like that.

decryption
5th November 2004, 09:25 PM
Originally posted by adamjc@Nov 5 2004, 07:23 PM
I wonder if it would be a sliding scale, i.e. the more they sell the more they earn?
Err.. of course? Any shop that sells more stuff, makes more money.

macmate
5th November 2004, 09:35 PM
Originally posted by gringo@Nov 5 2004, 11:29 AM
Hi there....

I was just pondering, how all Apple resellers are priced the same, there doesn't seem to be anyone offering cheaper prices to increase sales (other than a few who discount a tiny $50). So it got me wondering, is it:

A - Cost price is actually high (unlikely, due to need for profit to live)
B - Apple enforce strict pricing regime (to uphold value of image/brandname)
C - None of my stinking business

I'm personally hoping it's not C, and also secretly hope for an option D or E or something unthough of by my tired head.

cheers
sorry to say that its A.

Don't get me started because i won't stop on this issue. to give you an idea.........

we sold as many PC last financial year as the year before. (give or take 10) but to make the same profit we have had to take our digital camera market and push it hard. we sold 9 x more cameras last financial year then the previous. overall profits were about the same.


If you discount then you can't afford to give proper support. one hour free support and there goes you profit.

Apple owned store coming soon smaller dealers will die unless they make the majority of their money elsewhere.

Mac Mate

macmate
5th November 2004, 09:40 PM
Originally posted by MightyAtom@Nov 5 2004, 02:05 PM
Yeah like Disko said it's pretty much all three.

I doubt you'll find a reseller commenting on this, I believe their contracts with Apple prohibit discussing it.

If I understand correctly the margin on most Apple products is extremely low, about 10% or less. I'm also pretty sure their reseller contracts prevent them from advertising products below RRP though they can still sell them below RRP, it would just kill any possible profit.
Wrong and wrong.

if we could get 10% i would shout you all drinks. Apple centres get the most but they have 'rule' they need to follow and targets the are 'encouraged' to meet every quarter to got .25% bonuses. they can advertise at less than RRP. which is why you see them advertising in the green guide at stupid prices(apple 'encouraged' them to meet their target at the end of the quarter and are therefore left with 20 ibooks out back they have to ship). this too leads to bad service as the attempt to sell you whats out back instead of whats best for you.

If you advertise stupid low prices and a store complains then you get a call from apple.

ASR resellers get even less.

macmate
5th November 2004, 09:42 PM
Originally posted by Comet@Nov 5 2004, 06:00 PM
I'm pretty sure the resellers gain the same amount of profit selling to educational customers as they do with their normal customers. Else, what insentive do they have to selling educational?
Wrong again.

edu is less profit. 2 reasons. EDU prices can not be changed. Fewer EDU dealers therefore more EDU computers get sold. If you are an EDU store then your meant to be selling classrooms of these things, not just to students.

Mac Mate

Phillip
5th November 2004, 11:14 PM
I was wondering if Apple has a rule of say, Havey Norman can't bundle a remote for free with an iPod to boost more people going to HN. Would that be anti-competitive?

jeremy
6th November 2004, 12:25 AM
The Apple Centre where I purchased my iBook was pretty outright about saying that they only get a 6% rebate on all purchases. Well that was with education pricing anyway. I do also know that they can't even match education pricing, because the difference between the pricing is greater than their margins.

Paxton
6th November 2004, 07:46 AM
Originally posted by Phillip@Nov 5 2004, 11:14 PM
I was wondering if Apple has a rule of say, Havey Norman can't bundle a remote for free with an iPod to boost more people going to HN. Would that be anti-competitive?
Since when were harvey norman selling iPods? I was in my local Hardly Normal on Thursday Night, looking for those expensive Lexmark Cartridges, and when i went to see if they did sell iPods, there was only those awful JNC iPod rip-offs. I know Domain sells them, but their flagship store also has an Apple Store in it, which was really bad, with too many people in it, and not enough staff.

symean
10th November 2004, 10:33 AM
This ifo comes from Australian Reseller News, so hopefully it's accurate: as quoted by a Director of a large AppleCentre chain, AppleCentres currently make 8% (on paper, more on this below) upfront, and another 3% paid on the 'back-end' if they reach the sales targets set by Apple. If they don't reach their targets, that 3% disappears. Of course you have to take discounts off this as well, so even their 8% falls wuite quickly...

Let's do the maths here: iBook RRP $1695. If they sell at retail they get $135.60 profit. If they discount the machine even by $50, this falls to $85.60. If the store reaches their targets, they get another $50.85 back at the end of the month.

Apparently AppleCentre targets set by Apple have just gone up by 40%, so it's even less likely they will get this extra 3% back. So if they don't reach their targets, and discount an iBook for you, they make 5% profit! No wonder they have to sell accessories & software to pay the electricity bill (maybe a candle-lit AppleCentre would be a good idea?)...

This is why, if you go into an AppleCentre to buy an iBook, and think you will get $200 off if you pay by cash, you are sadly mistaken. This is also why there isn't mcuh of a difference on advertised prices across stores: there's just not that much room to move in pricing.

zefi
10th November 2004, 11:18 AM
Support your local Apple Centre, buy a printer!

adamjc
10th November 2004, 11:19 AM
lol,

What about a digital camera, at full retail?

macmate
10th November 2004, 11:19 AM
Originally posted by symean@Nov 10 2004, 10:33 AM
This ifo comes from Australian Reseller News, so hopefully it's accurate: as quoted by a Director of a large AppleCentre chain, AppleCentres currently make 8% (on paper, more on this below) upfront, and another 3% paid on the 'back-end' if they reach the sales targets set by Apple. If they don't reach their targets, that 3% disappears. Of course you have to take discounts off this as well, so even their 8% falls wuite quickly...

Let's do the maths here: iBook RRP $1695. If they sell at retail they get $135.60 profit. If they discount the machine even by $50, this falls to $85.60. If the store reaches their targets, they get another $50.85 back at the end of the month.

Apparently AppleCentre targets set by Apple have just gone up by 40%, so it's even less likely they will get this extra 3% back. So if they don't reach their targets, and discount an iBook for you, they make 5% profit! No wonder they have to sell accessories & software to pay the electricity bill (maybe a candle-lit AppleCentre would be a good idea?)...

This is why, if you go into an AppleCentre to buy an iBook, and think you will get $200 off if you pay by cash, you are sadly mistaken. This is also why there isn't mcuh of a difference on advertised prices across stores: there's just not that much room to move in pricing.
again your talking about apple centres. not apple resellers. and if you see the targets set you will lose your head. ever wonder when you pick up the green guide and see an apple centre selling iMacs at $35 profit? it's because apple "persuaded" them to purchase anything apple had in stock so that they reach their target. once this target is reached apple sets a new target which is allways more. so the apple centre is left at the end of the quarter with heaps of stock that they move for next to no profit and hence give no service and they end up pushing whatever is out the back not what is best for the customer. they are then left with an even bigger target for the next quarter. its 1.5% for meeting target, .5% for selling a certain amount, .25% each for ipod target, display target, applecare target and software target. this makes up the 3% you talk of. apple resellers don't get the first 1.5% target.

Also worth noting that its a quartarly rebat not monthly, apple changed this becuase people were discounting knowing that they would get the rebat soon. apple offers 30 day accounts therefore making the rebate quarterly stopped this.

About people expecting money off for paying cash. This is so true people come in asking for 'cash discounts' the truth is that its the opposite now. no discount for cash, instead its an extra charge for credit.

Another this worth noting is that there are product catagories. Consumer and Pro. consumer is 6% and Pro is 8%. again this is only for apple centres. resellers are about .5% behind that (depending on what wholesaler they go through).

symean
10th November 2004, 12:46 PM
Any idea what margins used to be on Apple stuff? I mean pre-iMacs and G3 towers...

I wonder what Compaq, HP, Toshiba, etc. resellers get as a standard margin <_<

macmate
10th November 2004, 01:04 PM
Originally posted by symean@Nov 10 2004, 12:46 PM
Any idea what margins used to be on Apple stuff? I mean pre-iMacs and G3 towers...

I wonder what Compaq, HP, Toshiba, etc. resellers get as a standard margin <_<
in the early 90s there was 20%+

i know cause my boss just told me :)

another thing people keep forgeting is that margins are ex gst so the are smaller again then the calculations above.

hawker
10th November 2004, 01:16 PM
i&#39;ve also noticed that Apple and indeed KH Dist treat resellers pretty bad. I don&#39;t know why anyone bothers anymore, you can make heaps more money out of PC&#39;s... And everyone believes they have to upgrade every year or so, so they&#39;ll keep coming back&#33;

zefi
10th November 2004, 01:24 PM
So resellers are really doing it for the love?

awww, makes me want to go hug a reseller. ;)

macmate
10th November 2004, 01:27 PM
Originally posted by zefi@Nov 10 2004, 01:24 PM
So resellers are really doing it for the love?

awww, makes me want to go hug a reseller. ;)
we sell macs for the love of the product and because it helps apple servive. what&#39;s really bad is how we get treated in return.

the_OM
10th November 2004, 03:07 PM
So basically the reason why macs having been coming down in price over the past few years is not because apple makes them cheaper or sells them to stockists at lower prices, but because apple has set the recommended retail price lower.

Damn thats fucked, Apple is keeping their profit margins at the same levels and retailers margins are taking a hit.

macmate
10th November 2004, 10:13 PM
Originally posted by the_OM@Nov 10 2004, 03:07 PM
So basically the reason why macs having been coming down in price over the past few years is not because apple makes them cheaper or sells them to stockists at lower prices, but because apple has set the recommended retail price lower.

Damn thats fucked, Apple is keeping their profit margins at the same levels and retailers margins are taking a hit.
apples margins range from 20%-29% depending on product. but even considering the development costs that stil alot.

pipsqeek
11th November 2004, 08:06 AM
pipsqeek wonders what the profit margins are for iPods and iPod minis.

pipsqeek

iSlayer
11th November 2004, 08:09 AM
Originally posted by macmate@Nov 10 2004, 10:13 PM
apples margins range from 20%-29% depending on product. but even considering the development costs that stil alot.
thats a good margin for apple
explains why they are making huge profits.

DVD Plaza
11th November 2004, 08:28 AM
Originally posted by decryption@Nov 5 2004, 09:25 PM
Err.. of course? Any shop that sells more stuff, makes more money.
He was asking about sliding scales - as in if you sold x1 amount then you get y1% profit, if you sold x2 amount then you get y2% profit, if you sold x3 amount then you get y3% profit...

DVD Plaza
11th November 2004, 08:30 AM
Originally posted by paxtonandrew@Nov 6 2004, 07:46 AM
Since when were harvey norman selling iPods?
It&#39;s been rumour for some time that Hardly Normal would be selling Apple gear again soon - even if just the iPod.

It must have finally come true as the Hardly Normal catalogue in my letterbox (Adelaide) a couple of nights ago was advertising iPods.

wickeddigital
11th November 2004, 10:30 AM
Originally posted by macmate@Nov 10 2004, 01:27 PM
we sell macs for the love of the product and because it helps apple servive. what&#39;s really bad is how we get treated in return.
And this is the reason most independant resellers sell Macs - for the love of the product, which is not a good business reason I admit, but it is what has kept Apple&#39;s head above water during those difficult years in particular - loyalty is however often a one way street sadly.....

As a reseller of Apple&#39;s products it is pretty much a non profit part of our business with margins as low as 8% and support even lower than that. We are still showing posters in our store for the Powerbooks marked with the year 2003&#33; Why? Because the last time we received ANY promotional material from Apple was over 6 months ago. We do not have iMac brochures, iPod brochures etc etc etc....I am sure that David Jones and Domayne do.

Stock is a constant battle and one that is getting to be a thorn in the side of all resellers. We buy the demo stock to display to our customers and then have nothing to sell them, what is the point?

It has taken months but we finally have ALL iPods in stock - we finally received the first GOLD Mini iPods we orderd back in January&#33; Now where are all of those people who wanted one again? Ah yes, they have now purchased their iPod from DJ&#39;s or Domayne.... This is not a sustainable situation for any small reseller.

On top of this the most asked question from all Apple users is - what discount can you give me? OK so let&#39;s knock off a couple of percentage points, and then charge it to a credit card so there goes another 2-3% and we are left with about 2-3% BEFORE all costs of business are taken into account. This is NOT a good business model at all under any circumstances. On top of this we get little or no support from Apple.....go figure.

OK I have vented, back to your regular schedule........

macmate
11th November 2004, 10:42 AM
Originally posted by wickeddigital@Nov 11 2004, 10:30 AM
And this is the reason most independant resellers sell Macs - for the love of the product, which is not a good business reason I admit, but it is what has kept Apple&#39;s head above water during those difficult years in particular - loyalty is however often a one way street sadly.....

As a reseller of Apple&#39;s products it is pretty much a non profit part of our business with margins as low as 8% and support even lower than that. We are still showing posters in our store for the Powerbooks marked with the year 2003&#33; Why? Because the last time we received ANY promotional material from Apple was over 6 months ago. We do not have iMac brochures, iPod brochures etc etc etc....I am sure that David Jones and Domayne do.

Stock is a constant battle and one that is getting to be a thorn in the side of all resellers. We buy the demo stock to display to our customers and then have nothing to sell them, what is the point?

It has taken months but we finally have ALL iPods in stock - we finally received the first GOLD Mini iPods we orderd back in January&#33; Now where are all of those people who wanted one again? Ah yes, they have now purchased their iPod from DJ&#39;s or Domayne.... This is not a sustainable situation for any small reseller.

On top of this the most asked question from all Apple users is - what discount can you give me? OK so let&#39;s knock off a couple of percentage points, and then charge it to a credit card so there goes another 2-3% and we are left with about 2-3% BEFORE all costs of business are taken into account. This is NOT a good business model at all under any circumstances. On top of this we get little or no support from Apple.....go figure.

OK I have vented, back to your regular schedule........
i feel for you.....


i am actually in the process of writing steve jobs a letter. it would be nice if i could get other signatures on it. let me know what you think.

iSlayer
11th November 2004, 10:51 AM
ill sign macmate but i doubt it will ever get within a 100ft of steve.

macmate
11th November 2004, 11:15 AM
Originally posted by islayer@Nov 11 2004, 10:51 AM
ill sign macmate but i doubt it will ever get within a 100ft of steve.
There are ways mate, there are ways.

just reading the ARN (ausralian reseller news) and the apple centres have just had their sales target double for the next three months. what a joke&#33; not many people buy computer for christmas ipod maybe but its more third party add ons that get sold this time of year cause the mac faithful are waiting for the Jan Expo.

i really really hate apple. Don&#39;t mix this up with me hating apple products because those i love.

wickeddigital
11th November 2004, 01:41 PM
Originally posted by macmate@Nov 11 2004, 10:42 AM
i am actually in the process of writing steve jobs a letter. it would be nice if i could get other signatures on it. let me know what you think.
Give me a look at the time.....

wickeddigital
11th November 2004, 01:42 PM
As an update - I just had iMac and iPod flyers delivered to us.....from another Apple reseller who does not have a store front and who does not actually need them&#33; Makes perfect sense that we have a large investment in a store and web site for sales and we do not get any informational material sent to us directly&#33;

LCGuy
11th November 2004, 02:17 PM
Originally posted by macmate@Nov 11 2004, 11:15 AM
i really really hate apple. Don&#39;t mix this up with me hating apple products because those i love.
Same. Great products, but a totally craptastic company.

pipsqeek
11th November 2004, 04:49 PM
Originally posted by wickeddigital@Nov 11 2004, 01:42 PM
As an update - I just had iMac and iPod flyers delivered to us.....from another Apple reseller who does not have a store front and who does not actually need them&#33; Makes perfect sense that we have a large investment in a store and web site for sales and we do not get any informational material sent to us directly&#33;
Don&#39;t be rediculous. That&#39;s just too much common snece for Apple Aust to handle.



Macmate. I&#39;ll sign the letter. You can attach my letter to it as well.

pipsqeek

Phillip
11th November 2004, 05:00 PM
Originally posted by DVD Plaza@Nov 11 2004, 09:30 AM
It&#39;s been rumour for some time that Hardly Normal would be selling Apple gear again soon - even if just the iPod.

It must have finally come true as the Hardly Normal catalogue in my letterbox (Adelaide) a couple of nights ago was advertising iPods.
I want to Harvey Normal about 3 weeks ago and they had it there locked in a glass stand. Havn&#39;t seen them on they ads thou... started to think they wre anti-ipod and pro creative infact.