Banned from buying iPads... for life.
protocolsnow.com
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A friend of mine manages a high-end retail store in the area. He tells me that there are a number of people who match this buying profile. The products either show up on Craigslist, eBay, or are moved out of state to be sold elsewhere, often in markets the retailer is unwilling or unable to enter for a variety of reasons. Like it or not, in pretty much any retail environment, this practice is unacceptable.
He also tells me that these small groups of people will often approach customers in the parking lot as they exit their vehicle, offering them cash to enter the store, buy the goods with a few crisp hundred-dollar bills, and to keep the change. This gray market is very real.
Beyond that, the guy admits he knew of the policy and was willingly violating it. There's really not much room for outrage here.
I still don't get why this practice is unacceptable. The shop doesn't seem to lose anything here.
I'm not saying I agree with this practice, that's just the reason this is disallowed.
You're right, but say it like you mean it. They treat your opinion of their company as their property.
That's what having a brand means.
I still have the view though that if someone has the money they should be able to buy it and a lifetime ban is not really ideal.
Also a CNN article I read recently means the limit of 2 isn't stopping the trade in Hong Kong: http://www.cnn.com/2010/TECH/04/08/ipad.hong.kong.china.sale...
If a retailer is unable or unwilling to enter a market, why should they be able to artificially ban anyone in that market from obtaining their product?
Take this outside of the context of Apple here. If Universal decides to release a DVD in the US, but wait 2 years to release that same DVD in the UK, should they be allowed to ban people in the UK from trying to obtain the US version? Trying to artificially create segment markets to suit your business goals like this goes against the entire idea of a global marketplace.
If anything, Apple is losing that revenue because they are 'unable and/or unwilling to enter that market,' not because someone isn't in the store shopping for their iPad. The argument that Apple is losing money over this is like the argument that the media industries make when they claim that every download is a lost sale.
I'm not saying it's right - just that it's not new.
Saying that this guy somehow 'wronged' Apple is like saying that someone who buys DVDs outside of their region code (and uses a region-free dvd player) is somehow 'wronging' the movie studios.
Indeed, they resort to technical means to effectively "ban" people (region codes). IMO the reverse situation should arise that the companies are prevented from imposing artificial segmentation by any means if they wish to retain copyright protection.
This only makes sense if the base product is a loss-leader, and all of the margins come from the upsells. Best Buy may work this way, but I'm pretty sure Apple makes a profit selling even the barest iPad configuration.
If I could get a comparable laptop (obviously by my own preferences) then I'd jump ship in a heartbeat, just so I didn't have to feel like I was part of some Apple fanboy club.
The attitude? not my thing. The people in the stores? not my people. Even the places they locate the stores are not my kinda places.
Unfortunately, they have great products I really enjoy and their service is phenomenal.
If the only message I got was out of stock, I'd probably wait. But upon learning that the price is actually $1100, that triggered a different psychological response, and now I'm looking for something cheaper. Something from a different manufacturer.
So sure, in the short term, they are selling all they can. But in the future, when they have more capacity, they just lost a sale.
I believe Best Buy is what one would call a middle man.
As far as I know, yes, they are. They make money on Apple products purely off of in-store warrantees and accessories. If you consider this, their store product layout starts to make a lot more sense: they have a huge Apple logo, tons of accessories prominently displayed, and then the actual products hidden on a bottom shelf.
A small nit here but it's important to point out that this is Not Quite True. Over the past hundred years we've worked out some rules about what sales policies companies are allowed to have. For example, you can't deny sales based on race, you can't deny sales (wholesale) because a store sells a competitive product also, and so on. It might be that in the global market place these rules need to be revised.
When you, the fan, get around to buying tickets for the event you find that they're all sold out already (except for the nosebleeds). But you can get tickets on Craigslist for 3x the face value of the ticket from some guy who bought several large blocks for the sole purpose of re-selling them with a huge markup.
Maybe the venue shouldn't care if re-sellers are buying up all the tickets, but it sure makes for a shitty experience for their actual market (i.e. the people showing up for the event). It also limits the venue's ability to control supply and demand because they no longer have any direct say over the market price for their good/service.
So both fans and the venues seem to be worse off, while the middle man makes a big profit by artificially restricting supply.
The guy in the article exhibits the same type of buying behavior that a scalper would: buying more iPads than a normal individual would require and then reselling them at a markup. Apple doesn't have any way to tell that he's trying to extend their market abroad to people that can't purchase an iPad locally. But I'm pretty sure they have the same view toward a middleman that concert venues would. And the local customers trying to get an iPad when supplies are scarce are also going to be frustrated that one individual is making (effectively) block purchases.
One of the cardinal rules of good business is to cut out the middleman. That seems to be what's going on here.
Apple will make more iPads if they sell out. The supply is almost limitless.
But limiting scalpers is basically the same as EULAs and DRM - they're regulating what you can do with the thing you just bought. They're making life harder for normal users, while those who gain money by ignoring the system keep earning money.
But if you sell the tickets assigned to a name in the first place, there is no issue anymore. As long as venue sells "blank" tickets, they basically say they don't care if anyone is reselling them at much higher prices.
Imagine an auction that increased ticket prices until just before the show began. Now stop imagining it and recognize that it's exactly the same as sold out shows plus scalpers.
For extra ethical browny points, the sellers could donate (a fraction of) everything taken in above a certain `fair-price' point to charity.
Just think about it: scalper buys all the tickets and tries to sell it for triple price. Nobody buys it. Concert starts, it is empty and the scalper end up with expired tickets in his hands.
Does that happen? No, because people are willing to pay triple price.
As long as sales are made, any price is "mutually agreed upon". Manufacturers just choose to agree to a lower price than they could otherwise get away with, which causes shortages and rationing.
And then on top of that, they refuse to give further information that they obviously have. Lifetime limit? The policy says there is a limit on the number that customers can purchase, the number 2 clearly seems to mean "per customer" or "for now". Clearly the lifetime limit is not two. So what is it? Or is it just weasel words?
Customer: What exactly is your policy?
Clerk: I'm not allowed to tell you.
Customer: Then how am I supposed to observe the policy?
Clerk: I'm not allowed to tell you.
Customer: ???
Clerk: I've said too much already.
------
ISPs are notorious for having similarly obscure bandwidth caps.
If you're a capitalist, or believe in free markets, there's plenty to be outraged by here.
If there are 100 widgets and 200 people want widgets, it is wrong for a third party who has no particular desire for widgets to buy all 100 widgets and sell them for an insane markup. He changed a 50% deficiency of supply into a 100% supply, artificially reducing it. This allows him to artificially increase the price.
All in all, this is why I'm hardly ever a first adopter. I let the sharks and the morons fight over the buggy 1st generation crap and then swing around when the 2nd or 3rd generation hardware hype isn't out of control.
From Wikipedia:
"Although there have been many attempts to corner markets in everything from tin to cattle, to date very few of these attempts have ever succeeded; instead, most of these attempted corners have tended to break themselves spontaneously. The party attempting to corner a market can become very vulnerable due to the size of their position, especially if their attempt becomes widely known. If the rest of the market senses weakness, it may resist any attempt to artificially drive the market any further by actively taking opposing positions. When the price starts to move against the cornerer, they are in a very difficult position, as it is likely to be impossible to exit much of their position without catastrophically moving prices against themselves. In such a situation, many other parties will be able to profit from the cornerer's need to unwind their position." (http://en.wikipedia.org/wiki/Cornering_the_market)
The only bad part about reselling is that the manufacturer doesn't capture the extra sale price and invest it in making more widgets, so everyone can be happy.
I had planned on reviewing the iPad in my next post...
Another iPad review from a random blogger? Really? This isn't a Twitter attitude, it's an attitude of "nobody really gives two cents about your opinion". And yet, here I am typing this. The internet is hard.
If Joe Retailer can't or won't enter a particular market but Bill Reseller will, Joe selling products to Bill sounds like a pretty efficient solution to the problem of how to get the product into a market that wants to buy it.
In the real world you often have to think two three steps further than you had to do to pass econ 101.
I'm typing this on a macbook pro, and I have an iPhone. For the last few years, I've enjoyed using apple products. I found that osx was a nice *nix development platform. Sadly, their recent decisions have been so disappointing to me that I've decided to stop supporting their platform. I've already ordered an android phone. My next laptop, like my current desktop, will be running linux.
It's very bizarre to watch so many people who claim to support open software systems defending Job's every move. It seems like some strange form of Stockholm syndrome. As for the rest of you, I encourage you to join me in voicing your disappointment with your wallets.
Why? Can you explain the rational reason why a retail store would want to keep someone from paying full price for their items?
Besides that, they were welcome to not sell him his second one, so I think they really messed up there.
As for being banned from buying ipads, he can always go to a different store and get them paid cash. Interesting how there is a 'lifetime limit' on customers buying your product, anybody else would be insanely happy about people buying more of the product.
The stonewalling on how many items you're allowed to order is the best bit, not only is there a rule, but you're not allowed to know it.
Very common for tickets(concerts, sports etc)
Notice how he specifically mentions a price for the "eBay hoarders", but avoids mentioning his markup. I wouldn't be surprised if his markup was close to $150 as well without actually ever being over. Like somewhere around $140.
His story is contrived in a way to give you a good impression of him and a negative one of the Apple store employees. Another couple of telling parts in the story are: "reservations are limited to one per iTunes account. Luckily I have a second account so I used that to place the reservation" and "Ok, so the gig is up" followed by a whole unnecessary conversation.
The first quote shows that he knows that what he is doing isn't exactly kosher with Apple. He is willingly and knowingly flaunting their policies.
The second quote shows that he realizes he's been had. He already knows why he was busted, but he persists in trying to troll the employees into saying something slanderous, like euphemisms for the fact that he's an unauthorized reseller.
I call into question the morals and ethics of the author of the post.
(I jest, but to make a point.)
And to hell with the Green Bay Packers, if only their season tickets were more expensive, all those middle class people in rural Wisconsin wouldn't be able to afford them and the decades-long waiting list would just dry up! Stupid corporatists and their 3-4 defense.
June 5th, 1999: The New York Knicks are playing the Indiana Pacers in the NBA playoffs. At the time, I'm living in New Jersey, and I'm heading into Penn Station to go home. A scalper walks up to me (and everyone else, I suppose) and offers me a ticket to the game. The ticket's stamped price is $100 (maybe $125). The scalper wants $450. I think about it, think about it, think about it. I pass.
Hours later, with just over 6 seconds left in the game, Larry Johnson wins it for the Knicks with an amazing, once in a decade 4-point play. I'm at home, jumping up and down, screaming. (Links below for the play.)
So, yeah, that's a service charge, but not quite like Ticket Master.
http://sportsillustrated.cnn.com/basketball/nba/1999/playoff...
http://www.youtube.com/watch?v=h3pGGjdBzns
http://www.youtube.com/watch?v=WA7JVEHbuG4 (Less drama, more basketball version of the video)
Thanks for reminding me of that. Wow!
There was a beer tasting event I went to a few months ago where tickets were ~$60. I showed up really really late (I was the designated driver anyhow) and got mine for something like $15 (which was cheaper than what the promoter was offering the "designated driver" tickets [which don't allow you to drink the beer] for).
Modern scalping constitutes a far larger fraction of the market, and consists entirely of artificially limiting supply. You don't think those pop teen idol concerts would really naturally sell out in 30 seconds, do you? That happens because somebody's running an automated system that hammers the online purchase form.
Sometimes people want to sell things for below their cost, to let more people enjoy them than otherwise would. A scalper takes advantage of this incorrectly low price, buys the item, and resells it for it's true market value.
They do not up market value (they up price). It is a side effect of artificial supply limit by the original vendor.
If there is no artificial limit (tickets for example), it means that the price was too low in the first place and buyers are willing to pay more.
Scalpers are market-based correction tool.
Yes apple could have made the launch price higher - but then they would have to lower it after the launch to get the rest of the customers.
But the last time they did that, there was a firestorm as all the early customers were very mad at the very quick price reduction.
So apple chose to start at the more longterm price.
The correct way for them to handle it would be a premium or collectors or limited time edition. AKA the first ### buyers get a special dodad, or a signed shirt or some item to make them feel important. Then they pay extra, and don't feel cheated when it goes on sale at the regular market price.
Think about any commodity... everyone needs sugar/salt, what if somebody starts buying all the sugar from the market and hoards it... some people will start consuming less but the prices will increase due to lack of supply and more or less constant demand.. and then the person can open floodgates and make some dough in the process... Pretty common in Third world countries (and hence illegal)
This is often what happens but it isn't a necessary condition to be a scalper. You can sell tickets for at or even below the initial cost and still be considered a scalper.
Indeed many scalpers often unload tickets for less than face value if they can't find a buyer at the price they want.
In an idealized market, of course, manufacturing capacity would ramp up with demand, but that's because price does, too. In reality, while the market price will go up enough for scalpers to play arbitrage, the producer doesn't capture this surplus and has no incentive to increase quantity supplied.
You almost always want to undershoot.
It would have worked like this for some period of time after the announcement but before the official release dates Apple would sell you a numbered product at a multiple of the announced retail price, the earlier the date, the higher the multiple. So the very first iThingy would go for say $100,000 and the next batch might go for $50,000 each, and the third batch would be priced at $25,000 and so on. This would let them practice almost perfect price discrimination; most customers would pay what the product was worth to them...
There are of course very good reasons Apple does not do this.
Or are they trying to create an image of scarcity and desirability?
Once you factor in risks like that, selling a few models at an extreme markup doesn't seem quite as attractive.
By the way, it may be rational for companies to let this happen, since mass production facilities cost a lot of money to set up, and they have to aim at the longer term demand instead of the spike at the beginning.
That said, enforcement is at least a little spotty. There are reports of Apple Store employees helping customers circumvent the no-cash policy by taking the cash for a gift card, and immediately accepting the gift card for the original merchandise. In the other direction, there are also reports of purchases with gift cards being denied for the same reason as cash.
Of course, in theory they could counter that by having an artificial hight price (say a few millions), but give you a discount (down to the normal price) if you pay with a credit card. This way you wouldn't want to pay cash.
It's a pretty bad policy if you have to go so far as to enforce it by making your customers pay in a way that is more expensive to them than paying in cash.
http://www.ustreas.gov/education/faq/currency/legal-tender.s...
That was probably because they were making it up on the spot.
It probably is all he can say.
The "undisclosed" part is what bothers me more. I was banned from AdSense for some reason Google can't tell, but when I asked them to check if whatever I did was really done, they came back a week later saying "yes, we checked it and you pretty much did whatever we said you did, but we still won't tell you what you did"
If someone writes me a letter stating I am in violation of such and such policy, I go in and fix whatever is wrong. I can't fix stuff they don't tell me.
In the end it was good. My blog makes a couple times more money now than it did with AdSense.
Lifetime ban? Come on!
Let's keep in mind WHY he was doing it: to send to other countries. But that's okay to bar him, because Apple doesn't explicitly mention race or nationality, they just don't sell them elsewhere. So what we've got is a type of class-system based on nation states and residencies. And most people consider that normal and reasonable. In my opinion this classism is not a minor issue, and in the future it's going to be a bigger as the U.S. steadily loses economic superpower status, whether it happens now or later.
Or instead imagine Apple as a Chinese company and China continues its progress and actually manages to usurp the United States as economic superpower and someone gets banned for life for purchasing an iPad for American friends. Seems sorta craptacular all of a sudden.
Text-only cache.
Things finally did work out in the end...
-- Sent from my iPad ;-)
"One day, when Gregor emerges from his room, his father chases him around the dining room table and pelts him with apples. One of the apples becomes embedded in his back, causing an infection. Due to his infection and his hunger, Gregor is soon barely able to move at all." (via wikipedia)
It’s for the cheapest noodles, you can presumably buy as much brand name noodles as you like. Maybe their cheap noodles are even cheaper than the cheapest in the local wholesale market and they don’t want all the pizzerias within reach come rolling in.
I am sure if I bought 10 eeepcs or something from Amazon, they would be more than happy to fill my order. And if I wanted 10 more, they would send me those, too. It's like if you give them money, they give you the product, or something. Pretty awesome.
Anyway, why doesn't the OP go to Best Buy or something to get the rest of the iPads? They probably don't care how many he buys. (Or rather, the shifts change frequently enough that nobody will recognize him.)
They probably don't have any, and that's important here. Unlike the EEE example, the context here is that the iPad is in short supply. So short that even the Apple store he was buying from had ran out of stock--as have most. The story he tells is about picking up one he had reserved several days earlier, and reserving yet another while he was there.
Now, from the retailer's perspective, this guy is taking the limited supply away from their actual customers. Even though a sale is a sale and they are making the same amount of money from it, they have no incentive to sell to him over anybody else in line. It's going to get sold anyway--and if you have to pick between selling it to an end consumer vs. selling it to a middle-man who is going to raise the price to your end consumer, you're probably going to chose the end consumer. It sucks if said middle-man was really just trying to do a favor for international buyers that can't get one any other way, but his purchasing behavior is indistinguishable from someone who is just profiteering.
If supply were adequate (as it is for EEEs, presumably) then they probably wouldn't have taken notice.
What is an "actual customer"? Last time I checked, if someone is in your store, wants to buy something from you, and have handed you their credit card to pay for the thing of yours they want, they are a pretty fucking excellent customer. The best, you could go so far as to say.
If you're worried about a secondary market, make more of your thing. Then the secondary market is fucked.
What is an "actual customer"?
Someone who is going to actually use the product they are buying from you, as opposed to someone whose sole intent is to capitalize on your product's scarcity. The end consumer, as opposed to the middle-man.
they are a pretty fucking excellent customer.
And what about the next guy in line? The "actual customer" as above, who doesn't get your product because you're too busy selling it to the guy who's only interested in making it even more scarce. Like I said before, you make the same amount of money from the sale, but if you can afford to be choosy about your customers (and in this situation, Apple can), the "actual customer" is the one you want to favor. The retailer has no incentive to favor the middle-man, who at best is going to raise the price to the end consumer without earning you a cent.
If you're worried about a secondary market, make more of your thing.
In what bizarro world does this happen instantaneously?
I will assume you are exaggerating on "entire experience the guy writes about is common practice like... everywhere". I've bought lots of newly released Dell computers and never ran into it... matter of fact, they wanted to sell me even more. It is all a game that Apple (and others) play to make you want to get it and to feed off early adaptors. If someone wants to be an idiot and buy one for more the MSRP, let them. Dealerships do that all the time.
You've certainly helped highlight Apple's narcissism and tendency towards being a god-damned control freak. Making and selling products is about making and selling products. They sold a bunch to this guy -- customers are to be appreciated. Volume and repeat customers, who expose your wares to larger audiences, are to be cherished.
Apple? they abuse them.
Substitute 'developer' for 'customer' in the above -- still true.
"All I can say is that you have reached your lifetime limit."
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Oh and really what does it matter, if the guy wants an ipad legit he can get someone to buy him one later. Or get it used off ebay later. This will just stop his bs mark-up scam, and probably scare off others doing it.
I think people would have a different reaction if this was their company. They have the right to decide how and when they roll their products out, and mostly this is an effort to keep the 'pro' traders at bay. They know this just makes it harder, it doesn't stop them, but it slows them down.
How can you call that "legit", as it is exactly what he got banned for, and could get that "someone" banned, too?