When the Apple Store launched almost two years ago, resellers were highly concerned over one issue: Would the Store get higher priority on product shipments and promotions? Apple quickly assuaged these reseller fears by setting policy that Apple Store would be treated like any other reseller.
And this held true. In fact, during the Great PowerBook Shortage of 1998, the Apple Store received Wallstreet machines much later than any other reseller. This policy may not garner many sales for Apple, but it certainly keeps Apple's retail channel relationships strong, a must for the company to survive.
A little Apple Store history is needed at this point. Up until two months or so ago, the Store operation was outsourced to a third party reseller. MacWarehouse got the outsourcing contract, so they handled all the call centers, shipping etc. Retailer sources stress that even though MacWarehouse ran operations, inventory was not affected by this management. The Apple Store was treated just like everyone else. However, the decision was made that the Store was ready to become a full-fledged Apple operation, so Apple now handles all Store activites in-house.
Perhaps related to bringing the operation in-house, a whole new Apple policy has come into place recently. The Apple Store now gets priority on all shipments of product, according to several reps we talked to extensively about this, who confirmed the change. This change has not been noticed until now, as the 450 MHz PowerMacs and 333 and 400 MHz "Bronze" PowerBooks debut, the first 'new' products since the change. For example, you can call up the Apple Store (1-800-795-1000) right now and order a PowerBook 400 MHz and have it by Friday or Saturday with FedEx's Saturday delivery. But if you call up any third party reseller at this time, you'll be placed on backorder until the end of the month. You can look at this Ingram availability report to see when the Bronze PBs are due in their warehouses. Ingram is one of Apple's two national distributors. The Apple Store has stock in its warehouses, but stock is not due at most of Ingram's warehouses until much later this month.
Why the change? Well, for one, it's great for Apple's bottom line. Every machine they sell themselves adds more money to the bottom line than a machine sold by a reseller, due to the economics of wholesale and markups. This seems like the obvious reason, but the exact impetus for the change is not known.
What effect is this change having on Apple's reseller relations? An unnamed salesperson from an all-Mac reseller in the Midwest said, "Apple should think about its customers' priorities when they decide where to put products that are in short supply. I think most people would rather be able to go to a store and see a new product in person. The Apple Store has always been billed as a place for people to go who prefer online shopping, but it seems in this case Apple is appearing to use a shortage as a means to attract new customers away from their local stores and to the Apple Store." Other resellers we talked to had similar feelings, but declined to comment.
This recent policy change at Apple has gone against what resellers were assured at the inception of the Apple Store. The reseller relationship is one of the most sacred things Apple has left, these are the people that stayed with the company during the tough times. Apple should do everything in its power to keep the Apple Store on equal par to third party resellers, not giving an advantage either way.
Come voice your opinion tonight at the PowerBook Zone chat from 9 PM to 10 PM CDT in our IRC channel. For details on joining, visit our IRC page.
