View Full Version : Apple VARs ‘ride the tiger’

Nov 6, 2008, 08:36 AM
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Category: Opinion/Interviews
Link: Apple VARs ‘ride the tiger’ (http://www.macbytes.com/link.php?sid=20081106093658)
Description:: For the past 5-8 years profit margins for Authorized Resellers selling Apple products have been in steady decline ... especially with consumer products.

Posted on MacBytes.com (http://www.macbytes.com)
Approved by Mudbug

Nov 6, 2008, 09:14 AM
My experience running a small business is unless you have a "shop rate" over $65 per hour (low rent district) you are not making money. Take the White MacBook at $999 and 3.3% margin. That's $32.96 gross margin. It better not take more than 31 minutes for the entire sales process, or gag, use more than one person.

iMac example $1499 lower end, assume 7% margin (Pro is probably 8) is $104.93 gross margin. It better not take more than 1 hour, 36 minutes for the entire sales process.

In every case state sales tax in most states where a lot of Macs are sold exceed the retailer's gross margin.


Nov 6, 2008, 09:23 AM
Consumer oriented VARs are essentially dead for every other segment of the PC market, aren't they? Windows PC buyers buy at big box stores - the segment of that market held by small VAR's is also non-existent -- and have been for almost 15 years. I have to <shrug> at this one. I'm sorry these people have suffering businesses, but it's about time that they start to think about running a business model that makes sense.

Nov 6, 2008, 12:00 PM
I never really got what value the VARs added in the first place. Was it all those intangibles? Maybe that's why the business model didn't work. Maybe the VARs added to Apple's reputation for being expensive, hmm?

Nov 7, 2008, 08:28 AM
Perhaps if it still wasn't difficult to walk into a best buy and pick up an iMac, what with the jackass salespeople trying to tell you that you don't want that, you instead want this garbage PC that pays better margins, maybe they'd be doing all right selling apple products. The only places I've been able to buy an Apple computer without being hassled by a salesperson are Fry's and Microcenter, well, and the Apple Store, but that's a given. Retailers need to discover that there's a reason Apple is successful, their people are knowledgable, and, in my experience at least, they seem to genuinely try to help you. It's the Service Stupid, lrn to sell.