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faction
20th April 2004, 01:36 PM
Hi All,

For the past 7 years I have been thinking about opening an apple store. I have heard a lot of negative feedback from people in the industry about doing it though.

I firmly believe than in my area there is no apple stores that offer the fantastic service I believe we as mac users deserve.

I was just wondering if anyone here had any experience in this field and if anyone had any suggestions.

I see a lot of the smaller companies going under, but some of the larger places like taylor square doing very well.

I would like people to post serious comments about a startup and the benifits/problems associated with it.

Any information or links to apple/wholesale sites with related info would be appreciated.

pipsqeek
20th April 2004, 04:15 PM
I have also considered opening one up where I am...well, abit further out from where I am because the only decent places around me are atleast a half hours drive to the east. West, nothing. North, nothing, south, nothing.

I cannot offer any opinions or guidance but will watch this thread to see what people say about it.

And yes, as much as I hate to admit it, Apple have become the Nazi's of IT.


Typicial Apple Scenario

"Here's out product, its great, have it, its $$$$.$$ its yours, thank you come again."

The next day:
"I called about my new machine, the LCD screen has blue smugges on it that won't go away"
"Oh that's normal, is there anything else I can help you with?"

A week later:
"Hi, I wanted to talk to someone about my mac not working properly"
"Oh that's normal, is there anything else I can help you with?"

The day after the warranty is finished:
"Hi, the battery is dying after 20 mins and the LCD screen is very dim"
"Oh, you have major issues, bring it in for us to look at it. Initial consultation is $90 then $150 per hour for every hour the Qualified Certified Apple Technician looks at it. Judging by previous experience with this problem, because we get them everyday it is going to cost you $1534.13 +GST. When can you drop it by?"

This has been a simulated scenario based on real life experiences. The content may or may not depict actual events.

Steve

faction
20th April 2004, 04:21 PM
I understand that a lot of people have had warranty problems with apple, and I know this is a problem. I am more interested in finding out about problems that are associated with buying stock, markups, not being informed of updates etc.

But all comments are welcome, the more feedback I get the better.

hawker
20th April 2004, 04:51 PM
Originally posted by faction@Apr 20 2004, 01:36 PM
For the past 7 years I have been thinking about opening an apple store. I have heard a lot of negative feedback from people in the industry about doing it though.
DON'T... Unless you have alot of $$$ to back you up. Because you will never make money selling mac software/hardware. Why you ask? because the price you see on the web site etc is the price apple charges you for taking it. ie. you make no money as a reseller. You make your money fixing Macs and selling third party hardware/software.

That is why so many mac stores open up a service dept. that also fix PC's. Apple does support you to an extent (will send out publicity stuff - and allow you to take new equipment out to expos etc)... In reality you have the same ordering system as someone who orders a computer through the online store etc. So in reality, they mose well order through the online store.

I guess you could do well as a sales consultant, telling people what they need, but you won't be making much $$$!

faction
20th April 2004, 05:10 PM
Hawker,

Have you had much experience in the field? I wonder how much the margin realy is. Surely they cant make $0 out of a sale. Stores would not exist if this were the case. There must be say 15 - 25% in it depending on the product.

I am not saying that I know much, as I don't. But surely there must be a little money in it.

Every guy I have talked to at a store has bitched about it, but the solution to me is sell more.
If you only get 10% on one then you get 20% if you sell two.

Please enlighten me. I am very keen to learn.

As I have never been to Taylor Square, and I have heard a lot about this place being very good. I would like any info people have about this place. Is it good?

hawker
20th April 2004, 07:27 PM
Believe it or not, Apple are that stingy. That was basically what I was told by Darwin's Apple Store... However, I could be wrong about software, I think that is marginally cheaper.

I was also pretty much told that by an Apple Rep from NSW, when I asked about a reseller-ship for my current computer employer. They said, in reality, to get any form of discount, you would need to order 20+ macs. When I did some more searching, I found that Govt. Dept's and Schools also get "that" discount if they order 20+ Macs.

As much as I would like to say it is not true. The cold hard facts are that Apple are very stingy. They never give away top of the line macs in comps. Only low end iBooks, iPods and eMacs. I would like to get in and change things, but thats a bit of a way off for now.

decryption
20th April 2004, 07:40 PM
If you open a store in Melbourne faction, you have a employee right here :D

But that aside, I would really like you to open a store in Melbourne. I have no idea how you'd do, how much money you'd make or stuff like that. But I know there is a lot of room for improvement within the Apple retail area. If you do, you'd get much support from AppleTalk, I can assure you that. :)

faction
20th April 2004, 08:11 PM
I would love to do one in Melbourne but I think the area is quite saturated already with stores. None of them seam to have that good a service though.

I was thinking in another state other than Vico.

From my experience in Melbourne NextByte are quite good, but I thought the sales side of things could have been better. My Mac on Flinders St were shocking for me. No follow up calls, bad service. Comp Now in Chadstone - they all seemed very stuck up as if they knew everything and actually knew nothing. Thats all my experience in Melb.

With regards to numbers, if I opened a store I would hope to be doing more than 20 a week in computer sales.

Does anyone know links to info from apple regarding resellers? I am interested in reading up on it (seriously) but need to get a grasp of the situation before I contacted Apple Directly.

LCGuy
20th April 2004, 09:05 PM
Don't waste your time. Apple is a royal PITA to their resellers, and i know from experience, after working a year and a half at an AASP. And then there's that whole "product placement" thing....the store that i worked at specialised in both PCs and Macs, and Apple insisted that the Mac stuff be placed in a way where they will capture the customers as they walk into the door, rather than the PCs.

faction
20th April 2004, 09:12 PM
LCGuy,

Can you elaborate as to why apple are a PITA to resellers?

What is AASP and what kind of volume did you guys have at your store?

I want to know as much as you have time to put to paper (keyboard?)

Currawong
20th April 2004, 09:52 PM
The feedback from people at Apple is that there are many people at resellers, and many customers, that are downright dodgy and attempt to scam. Apple treat their resellers and customers fine, if you don't try and scam them and pay your bills on time. It's quite natural to be hard on their resellers now, especially if you've recently been burned to the tune of many millions of dollars due to a bunch of them getting together under one company and promptly going bankrupt.

In Sydney, I gave up trying to get work at an Apple centre, because the majority, who were either involved in the Buzzle mess, or are run by Nextbyte, are dodgy in some way or another.

Personally, if I have to buy stuff, I'd currently either go directly to friends I have at Broadway Apple Centre (Glebe), or to Wickeddigital.

Do note here, an "Apple Centre" is a full-blown Apple-only shop. An "Apple Reseller" is a person or company or shop that sells Apple hardware, as well as other things. I'd never intentionally set up the former, unless I had some stupidly large amount of spare cash that I could afford to lose if everything went wrong.

The amount of dodginess, not to mention downright fraud I come across daily in the computer industries in Sydney has started to seriously put me off computers and technology altogether. I wanted, many years ago, to open up an internet cafe based on Macs, with a strong cafe side to support things if the internet part didn't bring many people in. After seeing a friends' shop overwhelmed with time-wasters, I've decided to focus mainly on internet sales and eBay, as the overheads are far lower, and if I get interrupted in any way, I can pause my business without having to worry about paying rent for a shop etc etc.

wickeddigital
20th April 2004, 11:30 PM
As a reseller here in Sydney, hopefully I can give you the correct details...

Firstly you have two ways to be a reseller:

1) An 'Authorised Solutions Reseller' where you do not deal directly with Apple, instead you buy from one of two Apple distributors: KH Distribution (The Best) or 'The other one' who you do not want to deal with from what I have heard. Your margin accross the board for all Apple products is 8%. No that is not a typo, it is a mere 8%.

2) Directly from Apple. To do so you are required to have at least $100K of Apple stock on the floor at all times. For this you will be rewarded with an extra 2% margin, totalling 10%. That is as good as it gets.

In both cases you are kept in the dark about new product at all times. Resellers hear about new product when you do. NEVER before....

One thing you do get, is discounts on the stock you use for demo purposes, it isn't huge but it helps. The amount varies with the product anywhere from 14% to 21% off RRP.

So why would you do it? Simple, you love Macs right? Well that is not enough of a reason for any logical mind as you simply can not sustain a business on such little margin. You must have another reason to exist, many go down the path of Service work for obvious reasons, we chose our own path.

Hopefully this has made things a little clearer for you.

faction
20th April 2004, 11:53 PM
wickeddigital,

Firstly thankyou for the insight, it is and will be very helpfull over the next few days. I know now not to return one phone call.

Its funny that you just posted as I have been researching the online stores of other companies today and have just finished evaluating yours. I must say, very nice site. Easily the best I have seen today, BAR NONE.

From the site I can see that the path you have taken is that of servicing the audiophile and the digital photography sectors. Looks like you are covering that very well.

You mention the two ways above of becoming a Reseller, from what I understand there is a third, becoming a Apple Centre. Is that in another bag or, is that what you have explained in the "Directly from Apple"??

I have recieved a price list from whom I think is "the other one" and I can see the margins they have, what I am not sure of though is if that includes frieght, which I bet it does not.

I know that Reselllers are kept in the Dark and this must be hard to overcome when you have $20k of powerbooks and ibooks on the floor and apple release new models and undercut the prices. Is there anyway to avoid this, or do you simply open all the boxes and sell the items as Demo stock and get your better margin (and a slap on the hand?)

So why do I want to do it? Because I love macs? Yes and No.

I honestly believe I have a viable business plan, I am not sure as to which other path we will take at this stage, be it service, I don't know. What I do know is that there are many people in my local community who do not have a good apple store to visit and I believe there is a demand there.

Again thanks for the insight and if you could provide anymore details I would be most greatful. (p.s. We do not want to start up in your state if that helps)

wickeddigital
21st April 2004, 12:01 AM
I must say, very nice site. Easily the best I have seen today, BAR NONE.


Thank you, a lot of blood sweat and tears went into it's creation and constant update!


You mention the two ways above of becoming a Reseller, from what I understand there is a third, becoming a Apple Centre. Is that in another bag or, is that what you have explained in the "Directly from Apple"??


Incorrect, Apple Centres are NOT part of Apple as every thinks. It is simply buying direct...


what I am not sure of though is if that includes frieght

No it does not. So when you order in a 'Mouse' for someone and add it's freight, you are losing money!


Is there anyway to avoid this, or do you simply open all the boxes and sell the items as Demo stock and get your better margin (and a slap on the hand?)


Firslty, no there is no way to avoid it other than to keep your ear to the ground and your eyes on the rumour sites. Thankfully we are only 'stuck' with three laptops!

And no, that is not how the demo stock works. Demo items are ordered from Apple and are tracked by Apple. Oh and one of each model only, PLUS they must not be sold for four months...

pipsqeek
21st April 2004, 12:10 AM
Thank you tremendously for the info faction.

Although not directly interested in the topic....as in, I did not bringn it up. I did find what you said to be most informative.

It was great knowing that there is someone who is willing to tell it how it is that happens to sell Apples.

Btw, I also had the introduction of looking at your site for the first time.

If you are anything as nice, straight to the point and realistic in real life as I gather from your reply post. Then I can confidently say that my next mac will not be from Apple Centre Hurstville.

You've got my vote.

Steve :D

faction
21st April 2004, 12:27 AM
I can see that a lot of work has gone into the site as I come from a web production background. Great searching and nice simple easy to navigate site.

I was unaware that the Buying direct option was the Apple Centre, but I was aware that it had nothing to do with being an actual "apple store".

As a reseller are you affraid of the day that Apple will bring an "Apple Store" to Sydney? It seams inevitable. This is probably the one thing that I am worried about in this startup. Apple coming in and developing 2 blocks away!

Good to see you managed to not get stuck with a huge amount of inventory. Are you also able to feel, to a certain extent, when new products will be coming out when there is a low inventory list from apple, or do you not have access to such numbers (you most likely just see what anyone would see on the apple store site = 2-3 weeks, right?)

So you are saying that you do not take MacOSrumors' reader news as concrete evidence when ordering :D LOL

Currawong this is also directed at you - I have heard that there has been a bad vibe around the computer industry with Scams and fraud being prevalent. Can either of you elaborate on this, or do you talk mostly about Buzzles dealings?

Hopefully I am not coming across a bit strong in all these questions but I am sure there are other members here that are also interested in this discussion?

Thanks Again

mbd
21st April 2004, 12:31 AM
I'm a partner in an ASR (Apple Solutions Reseller), and started it about seven months ago, for many of the same reasons that Faction outlined; being pretty dissatisfied with the existing dealers that I'd used (which include most of the CBD based ones). That's not to say that I haven't had some great service from them, but I've certainly also had really crappy service from the same ones too.

We don't have a shop-front, nor stock so to speak, but base our business on consulting and word of mouth (because we actually really do care a lot about customer service, and are both mac evangelists, so we are building a fairly decent reputation and are getting an increasing number of queries each week).

What WickedDigital has said is pretty much right on the money though, and from the sounds of it, we're both using the same distributor :-) - The bottom line is that you really cannot expect to survive if you only intend to sell apple hardware and software; you must have an additional source of income, unless you can be sure that you're going to sell a very large number of machines. WD's and my businesses seem fairly different, both in focus (they're after digital/media right? and we're after unix/developer/sysadmin/linux folk) and in model (they're a shopfront and we're not). And their website is much nicer than ours. But we live in Melbourne, so that should redeem us a bit. :-P

Another factor that hasn't been mentioned is that Apple does not hand out reseller status to prospective businesses without a certain amount of blood sweat and tears. And, you need their approval if you want to sell their hardware new (unless you're buying it from an existing dealer for cheap enough and re-reselling it I suppose) - the distributors are not allowed to sell Apple gear to you until you're an ASR. The application involves a multi-page form, as well as a verbose application letter, and Apple will look very closely at things like your business model, your target market, your physical location, and then after some weeks/months, decide whether it's appropriate that you are worthy.

Let me know if you have any more qns about it....

faction
21st April 2004, 12:35 AM
pipsqeek - your props should be directed at wickeddigital, not me.

I do agree with you though, this is the kind of service and attitude, that I believe is lacking from the Industry. If only I lived in Sydney I could come and visit the Wicked store and waist your time like many other mac users do :)

But seriously, thanks for taking the time out to answer some questions. Hopefully it seams for your efforts you will gain a few new customers.

mbd
21st April 2004, 12:42 AM
Not that you asked me, but my opinion;



As a reseller are you affraid of the day that Apple will bring an "Apple Store" to Sydney? It seams inevitable. This is probably the one thing that I am worried about in this startup. Apple coming in and developing 2 blocks away!


Nup! I reckon it'd be good, because they'll increase public awareness of the equipment, have it all nicely set up, and, really, who are they going to hire to staff it? Probably the same people that other resellers are hiring at the moment, which just means our service will shine in comparison :-). An official Apple store would almost certainly a promotional expense rather than profit making venture.



Are you also able to feel, to a certain extent, when new products will be coming out when there is a low inventory list from apple, or do you not have access to such numbers (you most likely just see what anyone would see on the apple store site = 2-3 weeks, right?)


Were you able to feel it? We get inventory updates now and then, but they really don't point at anything. At the end of March the availability of the now superceded eMacs was 'good'. So, yeah, we really are in the dark as much as the next guy. Time and experience do gain a bit of wisdom though - you can look at the release cycles for an idea, and as a general rule, the more 'cool' a rumour sounds, the less realistic it usually is... But, I'm still no good at it - I bought a 1.8ghz g5 three weeks before they lowered the price and made it a dual processor. Then I sold it in mid-January in preparation for the new G5s.... So yeah, really, there is nothing that gives us any hint of new stuff coming that isn't already available to anyone else who reads rumour sites.

faction
21st April 2004, 12:50 AM
Rocket Factory -

Well if nothing comes of all this at least some peopel got some business plugs and I got my posts over 40.

On a serious note though, thanks for the info on the reseller status. I am meant to here back from Apple tomorrow, we will see, with regards to starting up an Reseller Business.

With regards to applying though, I am a ways off yet, but I do have a business model (basic at the moment until I get concrete figures etc), good location in mind and an investor with unbelievable experience in the business industry.

I have been a buyer before for Retail stores and I am asuming that Apple Stores would work under a similar setup. There are obviously sales reps from various companies that distribute software and accessories etc that I would need to contact. Do these companies such as Epson, Nikon, etc etc all have their own reps that you deal with? I would assume that many of the larger business' would and many of the small ones would come under the wing of distribution agents.

Your site is showing potensial at least, unlike many others I have visited, atleast you have some sense of design.

pipsqeek
21st April 2004, 08:13 AM
Sorry faction, your right. My comments were meant to go to WD.

WD.....whatever I said before still stands. I will be visiting your shop sometime in the future on my next Apple purchase.

You are out of my way but it would be worth it if you guys go out of yours to make things happen, which by the sounds of things is the way.

This thread has been a great insight into who things work on the other side of the counter.

Having been interested in operating my own business in the near future, as mentioned originally, I have taken in what everyone has said.

Regards
Steve

wickeddigital
21st April 2004, 08:15 AM
I can see that a lot of work has gone into the site as I come from a web production background. Great searching and nice simple easy to navigate site.

Thanks, good to hear the navigation is good as that is what I really worked hard on...


As a reseller are you affraid of the day that Apple will bring an "Apple Store" to Sydney?

No, and I fully expect them to do so, anyone who can not see it coming is a fool. Many dealers are in denial or scared to death!


Hopefully I am not coming across a bit strong in all these questions but I am sure there are other members here that are also interested in this discussion?

It is fine, knowledge is power! :-)

Currawong
21st April 2004, 08:33 AM
Originally posted by faction@Apr 21 2004, 12:27 AM
Currawong this is also directed at you - I have heard that there has been a bad vibe around the computer industry with Scams and fraud being prevalent. Can either of you elaborate on this, or do you talk mostly about Buzzles dealings?
Wherever there are cars and computers, there will always be a criminal element.

I have personally served members of the Big Circle gang (in Sydney, a year and a half back, if anyone read the papers) who attempted to buy laptops with fake/rigged credit cards. I have declined online sales to many so-called companies that didn't exist, or had similar details to previously declined customers. There are plenty of people out there who purely aim to rip off anyone they can by any means they can, because computers, digital cameras and other gear is so easy to sell for a massive profit. The problem is made worse as there are many business willing to take the gear with no questions asked.

Take this senario, at which I was present. Yet another small computer shop on a busy road. The place is full of all sorts of gear of various ages, from old to new. We were standing out the back of the shop (leaving the front almost unattended, though we can tell if someone comes in). We are heading back to the front of the shop to find a man there, reaching towards a laptop that's sitting on a table. He jerks back as he sees us. We recognise him - he asks us if we want to buy a laptop from him - he comes in all the time and does this. We tell him where to go - if we had been a few seconds too late, he would have just flogged the laptop we had sitting on the table, rather than try and sell us one he'd stolen from somewhere else.

There you have the two most extreme sides of the problem regarding general illegal activity.

The dodginess in Apple Centres is rather different. Quite a bit had to do with service technicians. Apple pays signficant sums of money to technicians in Apple Centres for doing repairs. Various techs worked out that they could fake service and obtain parts from Apple, or otherwise charge Apple for warranty repairs that weren't needed. Apple figured out what was going on, and put rules in place to prevent this happening.

The next scam I know of involves Flexirent. The trick is, get a customer to agree to finance. Then, you send a fake invoice to the finance company for an amount 20% higher than the cost of the gear the customer agreed to purchase. You've already, at this stage, overstated the weekly or monthly repayments required for what they are purchasing, so no surprises for the customer. If you are tricky, the customer never sees the total you sent to the finance company...all they know is that they'll get a regular deduction from their bank account of the amount you told them. The reason salespeople do this is, they are all on commission. If they are selling a $5000 Powermac or Powerbook at 8-10%, and they add another 20%, that boosts their commission far more than selling a bunch of add-ons, such as warranty, printers, scanners etc etc.

The reason Nextbyte salesmen are considered to be so dodgy is, they have the hardest push regarding commission. If they don't perform highly, they can lose their jobs. The problem is, since the Buzzle mess, Nextbyte are the largest, by a far margin, Apple reseller in Australia. They basically can hold Apple Australia to ransom. Apple Oz would very much like to break this monopoly, as I understand it. There is quite a bit of suggestion that the appearance of Buzzle scared Apple Oz enough that they did all possible to sabotage it, though it's more likely that bad management was to blame for Buzzle going bust. The story is different depending who you talk to.

Apple has, though not technically, already opened store in Sydney. It's not owned by Apple, but it's run by people who's names are familiar to anyone who has had dealings with Apple Oz. I don't honest know if a bunch of Apple Oz people just decided to open a store themselves, or if there's some secret Apple experiment going on.

I think that Apple's push again towards large retail stores selling Macs to the general public (while leaving specialist sales for the smaller resellers) is part of this push. I don't think Apple would get enough interest to turn a profit if they opened an American-style full-blown Apple store here.

As things go, I think Wickeddigital has the best balance. Quite a few computer shops now sell stock both online, on their web site and eBay, and in a shop. eBay'ing gear is free advertising. There's no cheaper way to get many thousands of people to find out about you.

Does that answer your questions? :)

LCGuy
21st April 2004, 09:23 AM
Originally posted by faction@Apr 20 2004, 09:12 PM
LCGuy,

Can you elaborate as to why apple are a PITA to resellers?

What is AASP and what kind of volume did you guys have at your store?

I want to know as much as you have time to put to paper (keyboard?)
Well i was going to, but these guys said everything i was going to say. :) Great job, guys! :)

Btw, AASP = Apple Authorised Service Provider. ;)

stickman67
21st April 2004, 10:37 AM
Well, I know now what my next change of career is not going to be! :lol:

faction
21st April 2004, 12:48 PM
See Below.

faction
21st April 2004, 12:49 PM
Well, many of you may be disheartened by these posts, but I still think that I have a viable business plan.

All business' have multiple problems such as those mentioned above, thats the challenge in a start up, tayloring your business to make the benefits outweigh the inconveniences.

Although I am young I have worked in a high position in an industry that is faced with major problems daily for the past two years. Someone here tell me that managing production in China is not faced with more problems than opening a retail store! The benifit with retails is that most of the problems will be clear before opening the doors, we can learn to deal with them and adjust our business pattern to suit. It is when unknown problems start to arise at any given time in business which can really damage you, and I dont think that there is as much risk in the retail business of this happening than there is in other sectors I have worked in.

As long as there is a good product (I think there is), a good business strategy with high enough margins on other stock, enough demand, and great service I think retail is bound to work.

I think having sales online as well as having a shop front makes the best mix. I suppose you have something to fall back on if one isn't working as well as hoped.

Does anyone know what the procedure is with educational sales? For example does a university, college have a special contract with apple, or does that university just go straight to the apple store with the best options for them? Also what about educational sales off the street, how do they work, can resellers offer these or can you only do that if you are an Apple Centre, how do you get your money back and is there less margins in it?

What about all the users here? What would your ideal apple store be? Just apple products? Something like WickedDigital? What other products would you like to see in the mix?

hawker
21st April 2004, 04:10 PM
Education wise, people can walk in off the street and buy from you as education/govt if you are able to provide the discounts -as most Apple Stores are.

When University's and Schools want computers - if they approach you, you generally have to contact Apples education dept who take over the mass selling of computers, you are however given some sort of fee from Apple, I don't think it would be that much though!

LCGuy
21st April 2004, 04:38 PM
My ideal Apple retailer would be one that offers decent service. Unfortunately apart from the one that i used to do work experience at, all the others i used to go to have turned dodgy.

Oh, and they shouldn't have rediculous prices on old/2nd hand stock, like one of the local ones that used to be around, either. Did i ever tell you guys about the $200 32 meg SIMM or the $50 floppy drive? :lol:

No wonder why they ended up shutting up shop. :lol: :lol:

wickeddigital
21st April 2004, 04:46 PM
Originally posted by hawker@Apr 21 2004, 04:10 PM
Education wise, people can walk in off the street and buy from you as education/govt if you are able to provide the discounts -as most Apple Stores are.

When University's and Schools want computers - if they approach you, you generally have to contact Apples education dept who take over the mass selling of computers, you are however given some sort of fee from Apple, I don't think it would be that much though!
Actually this is not correct...

You have to apply to Apple to become an Education reseller, and it is difficult to get approval. Once you are approved you are then able to supply product at a 5% discount, and all goods have an extended three year warranty. Your margin as a reseller is even less again on these goods....

pipsqeek
21st April 2004, 07:17 PM
So AASS's make less money with customers like me.

Steve

Atomic
21st April 2004, 10:08 PM
The question from me is, why do Apple make it so hard for resellers to to enjoy a decent profit? Ultimately they are harming themselves if there isn't a great deal of exposure out there...Why is this guys?

wickeddigital
21st April 2004, 10:49 PM
According to Tony King the new CEO of APple Australia, we (resellers) 'enjoy' the highest margins in the industry....and "There is no way your margins will be increased"

Apple whether they like to admint it or not, rely on an almost evangelistic following who are prepared to do anything to be associated with the brand, including promoting and selling their products for little return...

DVD Plaza
21st April 2004, 11:00 PM
Originally posted by faction@Apr 21 2004, 12:27 AM
As a reseller are you affraid of the day that Apple will bring an "Apple Store" to Sydney? It seams inevitable. This is probably the one thing that I am worried about in this startup. Apple coming in and developing 2 blocks away!
Actual Apple stores aren't the focus of Apple Australia at this point.

Apple's stores in David Jones are a VERY big deal - there's MUCH more going on than people realise...

pipsqeek
21st April 2004, 11:05 PM
I do agree with that. If your profit margins are correct then Apple would be one of the hieghest.

I have three friends that have run and some still do run PC shops. One that is just online based no long trades because of family reasons. The other two both struggle with making any money at all. Usually bitching about the asian guy up the road selling this stuff for less then cost.

He cant get where the money is coming from then? He makes a few bucks on the high end gfx cards, sound cards, and the like.

a few bucks. essentially he would profit no more then $20 a day for his efforts.

You would hope that you make more then that in an AASS.

Steve

mbd
22nd April 2004, 10:39 PM
Originally posted by wickeddigital@Apr 21 2004, 10:49 PM
According to Tony King the new CEO of APple Australia, we (resellers) 'enjoy' the highest margins in the industry....and "There is no way your margins will be increased"
He's not overly wrong - in the past 16 years I've worked in a variety of different type of computer related jobs, including a couple of years of PC sales in both a small business shopfront and big business corporate sales. The margins on hardware were always small, quite often around 5%. If we could get 10% we'd be really happy with it. So, yeah, the 8% isn't really that bad compared to the PC market.

faction
23rd April 2004, 12:07 AM
DVD Plaza,

Why is there much more going on than people realise with David Jones? Can you please elaborate on this?

Although 8% seems very little, In many other retail markets the markup is very similar, especially on high cost products.

Apple has obviously got a good balance with the profit margins because they are making money and there are enought apple stores that are around that make enough money to keep the doors open.

Has anyone been to one of the David Jones apple stores and if so what are they like?

wickeddigital
23rd April 2004, 12:16 AM
Originally posted by faction@Apr 23 2004, 12:07 AM
Apple has obviously got a good balance with the profit margins because they are making money and there are enought apple stores that are around that make enough money to keep the doors open.
Yes Apple does have a good balance for themselves - they make US$160 out of each iPod sold, the dealer makes between AU$36 and $79 depending on model and margin (8% or 10%).

Most Apple retailers (The Apple Centres and Nextbyte's of this world) rely on huge turnover to obtain enough profit to survive and prosper. Smaller stores such as those that are Authorised Solutions Resellers simply do not have the turnover to prosper, some survive but as many have noted, not for long.

Strangely a certain large chain has been reported to sell non Apple product for ABOVE retail prices, and they get away with it. It seems the bigger your presence in the market the more easily the Mac community 'trusts' you and supports you. And they actually pay the increased price for things they could buy at ASR stores for RRP or less. Can someone please explain that to me?

sillydog701
23rd April 2004, 01:53 AM
Originally posted by wickeddigital@Apr 23 2004, 12:16 AM
Strangely a certain large chain has been reported to sell non Apple product for ABOVE retail prices, and they get away with it. It seems the bigger your presence in the market the more easily the Mac community 'trusts' you and supports you. And they actually pay the increased price for things they could buy at ASR stores for RRP or less. Can someone please explain that to me?
Well, there's nothing wrong to sell products at higher price than "recommended" price. If you can sell same products at higher price and make more profits, they are free to do so.
Economics taught me consumers will buy products from cheaper source if all other factors are the same, however, there are many factors, and mainly consumers' knowledge are not equal.

People do go to David Jones or Grace Bros (now MYERS) to buy products even though they know they can probably get the same product somewhere else at cheaper price tag.

Currawong
23rd April 2004, 08:14 AM
I think it comes down to the kind of customer being served. Some customers will go all over the city to find the best prices (sometimes even ignoring that the petrol costs exceed savings) and some always going to the retailer they trust (like David Jones) because they don't want the stress of having to travel to unfamiliar stores. I'd say some of the latter are totally ignorant that major savings can be had if they were wiser.

When I was selling Macs though, people would bargain you down on the price of the computer, thinking because it had the biggest price tag, it had the biggest margin. Then you'd sell them a bunch of peripherals without any discount, but making far more profit for the sale.

It's the same ignorance regarding marketing that makes people buy brand name products at higher prices - those higher prices purely because of expensive, bright coloured packaging, where the same product, in a no name brand, AND EXACTLY THE SAME PRODUCT, can be had a few $ cheaper, because you're not paying for fancy packaging that you will just throw away.

One great example of this is buying a Coke at McDonalds - the cup costs the company more than the coke inside it (2c vs 1c, from memory).

pipsqeek
23rd April 2004, 09:25 AM
packaging......NoFrills

Salt is Salt.
Milk is Milk

Good point Curra


Steve

DVD Plaza
23rd April 2004, 09:40 AM
Originally posted by faction@Apr 23 2004, 12:07 AM
Why is there much more going on than people realise with David Jones? Can you please elaborate on this?
I don't want to say too much in case I get someone into trouble. But suffice to say that not only is the David Jones project bigger and more important to Apple Australia than people realise, but it's not going to be limited to David Jones - nor is the iPod limited to just Target.

Hint... think about the stores owned by Coles Myer...

wickeddigital
23rd April 2004, 09:59 AM
Originally posted by DVD Plaza@Apr 23 2004, 09:40 AM
I don't want to say too much in case I get someone into trouble.
OK then I will say what I know...

David Jones are planning to become the BIGGEST outlet for all things iPod - they will be puting in a major effort in that direction, anything more than that I am not aware of.

It is kind of funny how all of these major stores are scrambling to sell the iPod purely because it is so damn popular, they forget the fundamental flaw in the selling of iPods, there is nothing in it! Sure you can say "but hey when you get them in there you can sell them the accessories to go with it and make more money that way" except there is now so much competition in that area as well, that the margin there is also gone to ruins. Take a look at the prices we are selling the accessories and the iPod at for that matter, it is just a turnover excercise now...

I guess my point is that the big chains will not be selling iPods and acc for very long once they realise it is a lot of effort for little return. Those guys are used to BIG margins...

faction
23rd April 2004, 12:32 PM
Does anyone know who will be able to sell the mini when it finally arrives? Will the coles/myer group have access to that and also DJs?

sillydog701
23rd April 2004, 01:45 PM
Originally posted by Currawong@Apr 23 2004, 08:14 AM
It's the same ignorance regarding marketing that makes people buy brand name products at higher prices - those higher prices purely because of expensive, bright coloured packaging, where the same product, in a no name brand, AND EXACTLY THE SAME PRODUCT, can be had a few $ cheaper, because you're not paying for fancy packaging that you will just throw away.
Well, people do pay for "brand". It's just like fashion. You can buy something look exactly the same without the logo at a fraction of price. And there are people can afford and are willing to pay more.

As for finding a cheaper place for the "identical" product, it comes down to location and knowledge about where the alternatives are and the experience or trust with particular retailers. For the big chains, many people do feel they are more reliable, probably when talking about service or repairs.

And I see nothing wrong with marketing, cunsumers are willing to pay more for branded product (with better packaging), and they are happy.

decryption
24th October 2004, 04:55 PM
I'm trying to find out how one applies to become an Apple Authorised Reseller, but can't seem to locate it on the Apple site, nor can I find anyone to contact.
Can someone give me some leads?

(yes, I know I'm grave digging this thread :P)

hawker
24th October 2004, 06:15 PM
You can call Apple direct and talk to them about it, they will probably give you the contact details of KH Dist, who's site is here:

http://www.khdist.com.au/

Febs
24th October 2004, 06:53 PM
Just open up a Tandy/Harvey Norman/Dick Smith/DJs/Myers/$2 shop...they'll all be selling Apple gear soon enough. :rolleyes:

Seriously...look at how many places are selling iPods now. It won't be long before Apple start allowing them to sell the rest of the range (in fact, Apple are heavily relying on this from what I hear - putting in their own people etc..).

I heard that at the recent Channel conference, resellers were told by Tony King "We don't give a shit who sells our products."

...fun time to be a reseller. :rolleyes:

frenchtoast
24th October 2004, 07:50 PM
faction - in your research on apple stores, and since i assume you live in melbourne, have you been around to some of the independent resellers, the one shop operations, ie streetwise, palaeographics, etc. plus what was the reply from apple australia about your business model.

Exocet
24th October 2004, 08:32 PM
Some Brisbanites may be pleased to know that Megmart at Coorparoo now has a fully-fledged Mac section.

decryption
24th October 2004, 09:03 PM
Thanks for the quick reply guys.
I have another question:
How does one become an Apple Authorised Service Provider?

hawker
24th October 2004, 09:30 PM
Call Apple for that.

From what I understand they expect you to have at least two techs to fix macs, as well as sales and admin stuff.. so basically unless you have a business with about five people, or intend to employ five people, don't bother. Same if you intend to sell!

decryption
24th October 2004, 09:44 PM
Well that's alright, we already have 6 people, and two can fix Macs :)
Thanks heaps for the info hawker!

Phillip
24th October 2004, 10:52 PM
This thread makes me stop thinking of getting more apple stuff for some reason. And why I shouldn't go to an Apple store for the school's work experience program. :unsure:

But I am always up for an AppleTalk Apple Center :P

hawker
24th October 2004, 11:15 PM
Originally posted by decryption@Oct 24 2004, 09:44 PM
Well that's alright, we already have 6 people, and two can fix Macs :)
Thanks heaps for the info hawker!
Can you employ me then :) I can sell macs!

decryption
24th October 2004, 11:49 PM
Originally posted by hawker@Oct 24 2004, 11:15 PM
Can you employ me then :) I can sell macs!
Can you relocate to Melbourne and know how to fix Macs? :P

Exocet
25th October 2004, 12:16 AM
I'm heading down to Melbourne in February, might have to drop in at a few of these trendy Apple stores cropping up down there in Batmania :)

Crambo
25th October 2004, 08:18 AM
If technician and authorisation are involved, then I'd assume the technicians would have to hold the Apple certificates from the two, or maybe only one now, year course. The fees are not small, but not large (around $1000 per technician per year). I believe you will need those to become an 'Authorised Service Provider'.

macmate
25th October 2004, 11:02 AM
faction- let me save you some trouble.

i work at an apple store and have for a long time wanted to open my own. i am an apple service tech and know all the ins and outs of the apple world.

i deal with apple every day and let me tell you one thing. great prices and great service can not co-exist in the same applestore unless you charge through the roof for service. this is the line apple pushes for us to make profits.

i have recently decided that i will not be opening my own applestore as the margins are so low. but you knwo what? thats the least of my worries. i have sat and watched as apple has once again gone through a 3 month period whether they shipped little more then en emac or two and some keyboards. If you know anything about business you will know that cashflow is the key and with nothing shipping then cashflow doesn't exist.

even the biggest apple centres were sending employees home because there was nothing for them to do. Any successful apple store sell to Education Institutes or corprate clients. Apple wants the consumer business for themselves.

Talking to people in apple has lead me to beleive that only applecentres will be accepted and if you have a read of the conditions of being an applecentre then you will know that you have targets you have to meet (if you don't they basically push machines down your throught).

this is a long conversation and if you really want to know more about it then give me private message.

Ric

decryption
25th October 2004, 02:01 PM
Interesting post MacMate.
But if Apple really wants to do that, why don't they just go the route of Dell and solely sell Macs? Why bother with AppleCentres and Apple Resellers and all that jazz when Apple can have more profit by selling direct?
Or, if Apple doesn't want to do that, just let anyone sell Macs. They should stop stuffing around and decide already!

macmate
25th October 2004, 02:11 PM
decryption Posted on Oct 25 2004, 02:01 PM
Interesting post MacMate.
But if Apple really wants to do that, why don't they just go the route of Dell and solely sell Macs? Why bother with AppleCentres and Apple Resellers and all that jazz when Apple can have more profit by selling direct?
Or, if Apple doesn't want to do that, just let anyone sell Macs. They should stop stuffing around and decide already!


thats right. we are here in australia where we make up less than 1% of their sales. look at the USA apple is already putting store in every city including mini stocks. we will be going down the same road, its just that australia is always the last to get everything. apple started with applecentres cause there was no online trading at that time and they could just concerntrate on inovation without worrying about anything else. nowdays the margins are less and apple is trying to make the dollar in ever place is can. IN the USA the applestore will beat any price! even if the end sell price is less than the resellers buy price. people are talking about 8% but that 8% is only for pro products its 6% for things like eMacs. add $15 for delivery and your down to 4-5%

Apple is trying to get everything to be through them now as they have had bad experiences resellers that know nothing about their product and with complaints from resellers when another is selling things at no profit. apple doesn't have the time to deal with these issues and its simpler for them to handle everything and train their own stuff and have control of what the public is hearing about their product.

Crambo
25th October 2004, 03:15 PM
I think New Zealand is the last to get everything, they suck :). I'm joking.

Ozi
25th October 2004, 03:34 PM
How do you go about getting Apple australia training and employment? Do you just send an application to Apple Australia? Im interested in maybe working for them after my degree. :)

macmate
25th October 2004, 04:04 PM
Originally posted by Ozi@Oct 25 2004, 03:34 PM
How do you go about getting Apple australia training and employment? Do you just send an application to Apple Australia? Im interested in maybe working for them after my degree. :)
i would think about it because they don't pay much and they basically expect you to tow the company line. most employees end up leaving and getting jobs in apple centres.

elvis
25th October 2004, 05:37 PM
The company I started has recently become an apple reseller. We focus mainly on high-end workstations for audio, 2D and 3D digital content creators, so our market is a bit skewed in terms of what we sell.

Apple don't allow for very high profit margins, but at the same time we can either sell their stuff for them, or fight them in the marketplace.

As for employees, if anyone reading this is in the brisbane area and wants casual work fixing Apple gear, PM me. :)

Ozi
25th October 2004, 06:34 PM
thanks macmate: the money isnt too much of a concern, as I just love working with Apple computers. If there is anyone in Melbourne looking for someone to work as an Apple salesperson, let me know. :) I know my stuff, and have a lot of customer experience. I also have an "apple" watermark on my resumé. :lol:

macmate
25th October 2004, 06:42 PM
Originally posted by Ozi@Oct 25 2004, 06:34 PM
thanks macmate: the money isnt too much of a concern, as I just love working with Apple computers. If there is anyone in Melbourne looking for someone to work as an Apple salesperson, let me know. :) I know my stuff, and have a lot of customer experience. I also have an "apple" watermark on my resumé. :lol:
message me if your serious about a job.

decryption
25th October 2004, 09:22 PM
Originally posted by Ozi@Oct 25 2004, 06:34 PM
thanks macmate: the money isnt too much of a concern, as I just love working with Apple computers. If there is anyone in Melbourne looking for someone to work as an Apple salesperson, let me know. :) I know my stuff, and have a lot of customer experience. I also have an "apple" watermark on my resumé. :lol:
I certainly have a job for you if you want to be a Mac technician :)

Ozi
25th October 2004, 10:11 PM
Yeah thanks decryption... but I was after something I could do weekends, around Uni, and you geeks on wheels or whatever its called is mainly weekdays, which im busy on with uni. :( Thanks anyway, anthony. :)

macmate
25th October 2004, 10:13 PM
Originally posted by decryption@Oct 25 2004, 09:22 PM
I certainly have a job for you if you want to be a Mac technician :)
where you work decryption?

decryption
25th October 2004, 10:38 PM
Originally posted by macmate@Oct 25 2004, 10:13 PM
where you work decryption?
I work in Melbourne for Nerds for Hire, an on-site tech support business. I take care of their Mac stuff, and we're looking to expand. So we need more people :)
Check out the ad I put up on the Apple site if you know anyone that would be interested - http://www.apple.com.au/employment/resellers.html