Is that anti-competitive forcing all sellers to sell your product at the price you want it sold?
Besides they're no longer their products, Apple lost ownership of them after they sold them. If someone chooses to resell them that's their business, Apple is not involved in that sale at all. Technology companies have too much control over what people can and can't do with their products as is, let's not give them even more control.
Of course just because it's anticompetitive does not mean that competition is always desirable, with concert tickets for example it's quite clear that competition is hurting more than it helps. Though I find "artists should get a say who can see their concert" much more reasonable than "Apple gets final say over all sales of Apple-manufactured products".
This is correct for used devices, or course, but people in the wholesale chain will have signed contracts agreeing not to sell below MSRP.
It’s called “undercutting the channel”, and it’s very frowned on in the physical goods distribution industry.
Has anyone made this work? I tried to make it work. Even at 10% (Discover IT category + end of year match), you can’t buy something, have it shipped to you, sell it, ship it, and make money. Any online marketplace eats your profit very quickly with assorted fees.
One of the routes I'm aware of involves buying gift cards from Kroger with a high cash back credit card during their frequent events where they offer extra fuel points on purchases. They don't charge activation fees on gift cards, and you can sell the fuel points accounts somewhat under the table on eBay, and then pocket the cash back from your credit card. Then you wait til black Friday or other sales, use the gift cards to buy electronics at discounted prices, and then ship them overseas to sell for a decent markup. It involves floating tens of thousands of dollars for several months though so not quite for your average individual just trying to make some quick cash.
https://9to5mac.com/2022/10/03/chase-apple-products-redempti...
Many of Chase's credit card sign up offers provide enough points for a cardholder to obtain an iPhone through this promotion. If the cardholder does not want the iPhone, they could resell it on a marketplace. Amazon Marketplace used to be one of these marketplaces until it started restricting listings for certain brands such as Apple.
Your examples are unlikely to be how a "third-party reseller" obtained the phone(s).
https://sell.amazon.com/pricing#selling-plans
In the past decade, Amazon started adding brand restrictions to prevent marketplace sellers from offering items on certain listings unless they met requirements set by the brand owner. This collapsed Amazon's marketplace for used goods of restricted brands and also hindered individuals selling new goods of restricted brands on Amazon. This lawsuit focuses on new goods of one of these restricted brands.
https://sell.amazon.com/pricing#selling-plans
Prior to Amazon's brand restrictions, Amazon Marketplace was a popular place for individuals to sell unwanted new and used goods. Selling on Amazon was even easier than selling on eBay, since there was no need to make a new product listing with photos and descriptions. Most of the new goods sold by Individual sellers were not raffle prizes, but unwanted goods such as gifts, items obtained at a discount, and items that were not eligible for free return to the original retailer.
It sucks.
I'm sure the reason is because of fraudulent items, which also sucks.
Pretty bad catch-22.
Anyway, I got this seller account to sell a couple of books. Used it a couple of times a decade. If I won an iPhone in a raffle, I'd absolutely be trying to sell it on Amazon.
There’s a couple of ways they are sourced but basically:
- Buy Apple gift cards for 70-80% of face value from let’s just say dubious sources and then use that to buy phones
- Fedex or warehouse employees stealing to supplement their salaries
- Authorized retailers who break their agreement
- Buyback websites or stores where people bring phones and get paid like 60% of retail or less if it’s locked. Some of this is just people wanting to return a gift they got without asking the giver for the receipt but most of the phones bought at these kind of stores are obtained through “credit mulling” where they gather up a bunch of homeless people and pay them $20 to go into an AT&T store and get a phone on credit.
- Currency arbitrage: if the Euro drops and companies don’t update their prices and you are able to get VAT refunds then you could be able to get a phone for less than it’s American retail value. This (big drop in yen) combined with the camera shutter is why Japanese spec iPhones can be a lot cheaper.
https://www.hanggroup.com/price/ is a company with 9 figure revenue that purchases these no questions asked. You can see the most they pay for a phone is $1050 for the 14 pro max which is $50 below retail.
Is this where the gift cards harvested from scam operations go?
First sale doctrine is only for retail sales that have no contract outside the sale.
In distribution, contracts can absolutely dictate terms. This is a good thing. It lets, for instance, Boeing require purchasers to properly maintain airplanes (it hurts Boeing when they fall out of the sky). It also lets manufacturers offer lower prices on the condition that products be displayed or promoted in certain ways. This is very common in retail ("we'll give you 5% off quantity 100 on the condition they're promoted in ads and an endcap in each store").
The Apple / Amazon example is resale price maintenance. There's some good background on US law in the area: https://en.wikipedia.org/wiki/Resale_price_maintenance#Unite...
In this specific example, where the claim is that Amazon and Apple colluded to raise prices by only allowing authorized Apple resellers on amazon.com, I guess I'm kind of sympathetic to Apple. At least inasmuch as they can show that sales from unauthorized resellers generate more warranty/support/other expense, or brand damage from even worse stuff like fraud and counterfeits.
It seems like the real complaint is with the resale price maintenance in Apple's authorized reseller program. Which may be a fair complaint. But why not go after that? If the price maintenance is illegal, it should be illegal everywhere, not just Amazon. And if it's legal, it should be legal on Amazon as well.
Could you provide some proof for such statements?
Proof that authorized resellers in aggregate provide better service and therefore fewer escalations/expense to the manufacturer? I didn't make that claim for Apple specifically, but it seems plausible.
why? People working at apple stores are not more trained or more competent than people working in other stores.
There are only ~500 Apple stores in the world. There are probably probably 100,000 authorized reseller locations (Walmart alone has 10,000 locations).
Setting aside Apple, the reason companies set up authorized reseller programs is to control the customer experience, from price maintenance (the topic of this HN thread) to brand image to customer satisfaction with returns/refunds.
Being authorized for any manufacturer is kind of a big deal; these companies pay for that arrangement, and there are often training requirements for staff, and minimum purchasing requirements, requirements for return/refund policies, and more. In return, the manufacturer steers business to these retailers and provides them with (often free) brand collateral, demo units, etc.
So if a customer has a complaint, whether it's user error or defective product or a mistake by the retailer or just the customer deciding this product is not for them, there is a strong incentive for the retailer to do right by the customer to avoid jeopardizing their status as authorized.
But if a customer needs help from a no-name reseller who has no direct manufacturer relationship, that reseller has little incentive to fix the issue. It's cheaper to just punt everything to the manufacturer, and there is no reason to do any extra work to protect the manufacturer's brand.
And of course unauthorized resellers have a strong incentive to pass off refurbished or even counterfeit products as real. Lower cost, and there's no bridge to burn with the manufacturer.
So all of that is why I think it's plausible that Apple, and other manufacturers, see increased costs and more negative brand experiences from companies that don't participate in their authorized reseller programs. I'm sure there are great indie companies that do everything right. But, in aggregate, at the scale of an Amazon.com, it seems reasonable for both Amazon and Apple to use the authorized reseller designation as a filter for sellers more likely to treat the customer well.
People most certainly got no training, can't fix any issue and just point you to call apple's support number (which isn't cheap).
It's sad to say but unfortunately I don't see a way out of this mess than strict brand control measures.
[1] https://www.macrumors.com/2022/09/12/iphone-fake-airpods-ale...
This is false:
“Ultimately Apple proposed, and Amazon agreed, to limit the number of resellers in each country to no more than 20. This arbitrary and purely quantitative threshold excluded even Authorized Resellers of Apple products.”
Apple is alleged to have created an Agreement with Amazon that retroactively limited the marketplaces where Apple Authorized Resellers could sell Apple products.
Doesn't seem like a great analogy for consumer electronics sales.
Apple is still on the hook to provide at least the bare minimum of support which costs Apple money.
Do we still need sales reps for technology at this point? Is the value of it not plainly aware to the end user?
Retail middle men made sense in an era of vastly different solutions to logistics problems.
The USs problem is individuals are better at individual decision making but we have all these lifelong sales reps, wannabe thought leaders, and politically correct economic of a bygone era to validate.
Best Buy, for example, is a car dealership; a land owning rent seeker not inventing anything.
Because Minimum Advertised Price (MAP) policies are one of the most common practices used by the large majority of consumer goods manufacturers and brands, especially in the electronics or higher end goods space.
Every retailer who is an authorized seller of a brand that employs a MAP policy has agreed to advertise/list/publish the product at a price no lower than MAP, or risk losing their reseller status. Note that I did not say they can't sell for a lower price, just that they cannot show a lower price to the general public to elicit a sale.
MAP is not just beneficial for the brand though, who's products remain priced accordingly to limits the brand has set; it's beneficial to the retailer who can count on a minimum set margin and not have to worry about being undercut by another retailer. It also benefits the end consumer by ensuring the retailer and brand retain enough margin on the sale to facilitate after-sale support and service as well provide the means to stay in business along with the benefit of helping to protect resale values (for applicable products). MAP policies themselves are fully legal under current anti-trust laws (in the US).
Yes. And it's not supposed to be ""your"" product after you sell it to a retailer.
...unless you have a contract with that retailer around the conditions of the sale, which Apple and lots of other big companies do with their bulk retailers.
Emphasis on suggested in MSRP. Retailers can take a hit on a loss leader to get people to buy cases, earphones, etc. Unless businesses collude to not allow that.
I'd daresay that backroom deals that prevent prices from dropping are the poster child for harm to consumers. I can't think of a more blatant example of it, actually - can you?
Is restrictiong competition antimcompetitive?
Is taking someone else's money stealing?
Is putting people in chains and selling them slavery?
Do words mean anything?
Yes
Numerous sellers reduce prices for apple devices. It’s gotten so consumer friendly that I almost never go to the Apple Store anymore.
I know this because I fully utilize Best Buy’s price matching to get lower prices on my purchases.
Apple blocking me from selling something I own is 100% illegal.
If Apple comes to you and says "paxys, we just love you, we'll sell you everything for 50% off... but you have to sign a contract that you will only dispose of products by firing them into space", and you sign that contract, and they live up to the discount... surprise, you're on the hook for your part of the contact.
Apple has contracts with these resellers. It's called minimum advertised price (MAP) or retail price support. There is a long history of MAP/RPS being litigated in the US, and there are lots of twists and turns and valid opinions to be had.
But "first sale doctrine supersedes any contracts" is NOT correct.