In the fourth quarter of 2018, the world witnessed a deal where Amazon was given rights to list Apple products. In exchange, Apple wanted the removal of non-authorized resellers of new and refurbished Apple products from the marketplace. The deal took effect January 4, 2019.
What does it mean for the refurbished industry and consumers who want to buy Apple products at a lower price?
We know that refurbished products are good for mother earth and for the consumer’s wallets, but Apple’s point is that they don’t make money when you buy refurbished goods from third parties. The tech giant’s solution? To partner up with one of the world’s biggest e-commerce platforms in hopes of reclaiming refurbished revenue.
The Consumer’s Perspective
Are consumers better off with this deal or are they doomed by the tech giant’s eventual monopoly?
Consumers need to know how detrimental these turn of events are for them in the long run. Amazon is one of the most dominant retail marketplace in the world, and the fact that it has removed first sale of resellers’ rights will severely limit the consumer’s choices. In short, the Apple-Amazon deal effectively removes lower-cost Apple devices from Amazon, thereby forcing people to pay up or lose out.
It’s a monopoly that ensures Apple won’t have any competition on Amazon. It’s a classic example of big businesses having their way with little to no regard to the budget-minded consumer.
Apple claims that they do this in order to keep the brand name’s integrity and product standard high. Moreover, the company states that this move potentially eliminates the risk of fake Apple products from circulating in the Amazon marketplace. The only problem is that most of them are legit merchants, and selling refurbished items on Amazon is their only source of income. With a deal like this, it’s only a matter of time before small businesses fold shops and find other means.
For Businesses/ Third Party Resellers
AceBeach is a one such retail shop that’s been selling the latest Apple products, including iPads, iPhones and Apple Watches over the last 11 years. But recently, the tech firm has been making it hard for third party resellers such as AceBeach to continue selling Apple devices and accessories.
The recent 2018 agreement between Apple and Amazon has all but cemented that. Some third party resellers/recylers have been forced to re-think their core business model or face eventual extinction from lack of support. These companies are forced to sell or empty their shelves of Apple products or contact Apple to become authorized resellers. This applies to any and all Amazon sales centres in Japan, UK, U.S., France, India, Spain and Germany.
Authorized Sellers On Amazon
If there’s one thing that third party stores can do, it’s to sign up as an authorized Apple reseller via the Renewed Program. With the change of contract comes several rules and stringent regulations. Moreover, there’s a set of criteria these retailers will have to meet, and sadly not all of them can make it.
The truth is, no one knows but Apple on what their endgame is for resellers and refurbished products. Setting up the Authorized Sellers on Amazon will filter out those who don’t have the numbers, i.e., shops who have logged thousands of Apple sales consistently, and the company will have tapped into this lucrative sales channel. From there, it’s only a matter of time before Apple dominates the Amazon landscape and discredits those who don’t buy into their system. The Authorized Service Provider platform gives repair shops the Authorized tag but takes away up to 75% of the shop’s business.
Some say that the slowdown of sales for newer iPhone models has been the trigger, driving Apple to create the third party reseller and refurbished platform. The company has since integrated a used products section on its website and aggressively brokered the deal with online retail giant Amazon. The trend shows that the refurbished industry has been steadily climbing as more and more consumers become environmental-conscious and cost-aware. In fact, it’s one of the keynotes in the smartphone market in 2018 and 2019.
Resellers usually make their money selling Apple products the moment they come out officially on physical stores. They sell on Amazon to fill the void that Apple has, and label it the “Apple season”. For others, their primary source of income is to accept used iPhones, iPads and MacBook’s and turn it into refurbished offerings. After the Apple-Amazon deal, these shops will have to partner up to become official resellers, which can add to the cost of business and whatnot. Among the rules is that these repair shops will have to set up a physical store, and can only use official Apple parts to bring the device up to a functional state.