Apple Resellers and Service Providers Speak Out Following Simply Mac Closures

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GameStop last week announced it is closing a number of non-productive Simply Mac locations throughout the United States, less than four years after acquiring and expanding the Apple Authorized Reseller and Service Provider, which effectively serves as a third-party Apple Store in smaller markets.


Following the reports, we received a tip from a disgruntled Apple Authorized Service Provider owner who said the underlying issues prompting Simply Mac's downsizing are "far deeper" than it would seem. He noted his own AASP is closing because Apple has "slowly strangled" him on margins and with "free labor" demands.

Another longtime Apple Authorized Dealer and Service Provider told us that AASPs have been "under siege" for years. The person, who wishes to remain anonymous, said profit margins are "appallingly low" and that Apple views its authorized service partners as "nothing more than glorified TV repairmen."

"I am sad to say that I do not see this changing," the person said. "Apple is highly aware of our concerns and do not seem to care. As an Apple reseller for over 20 years, I thought that when Apple became successful we would participate in that success, but we did not," the person added.

Given the polarizing comments from a few, we decided to reach out to a number of Apple's authorized sales and service partners in the United States and Canada to see if there is any validity to the claims.

A number of the Apple Authorized Resellers and Service Providers we spoke to refuted the allegations, noting they are stable if not growing, but we did learn that Apple has made one adjustment in particular that might explain the pressure felt by some sales and service partners--especially smaller ones with fewer sales.

Since August 2015, Apple has lowered its profit margins for resellers, requiring them to pay more upfront for products. Apple then rebates the difference as part of the monthly Business Development Funds checks it sends to resellers, but this method requires resellers to wait longer to be fully paid.

In other words, while the margins did not change overall, resellers are now forced to pay more upfront for Apple products to sell, which restricts cash flow that could otherwise be used for day-to-day operations, employee wages, and other expenses. For smaller resellers, the change can be particularly burdensome.

Meanwhile, one reseller believes Apple's arguably lackluster 2016 was a contributing factor to its own year-over-year sales decline.

On the service side, one person told us they "don't know that there is any truth" to the statement about Apple demanding "free labor," which a separate source said is likely an exaggeration for certain items that Apple used to compensate resellers for but now considers "non-revenue repair."

"I would not say that Apple has been demanding any kind of free labor," a service manager told MacRumors. "However, they are increasingly sending customers to us for iPhone repairs, which do not pay very well. We get paid more for a ten minute Mac repair than we do for an hour-long iPhone one."

"I am pleased to say that Apple really values their service partners and has increased our compensation for warranty work," another reseller said. "If you can achieve Premium Service Provider status, you get some nice perks along with higher compensation. While not perfect, Apple service really seems to care about us and is constantly trying to make things better for us."

MacMedics, an Apple Authorized Premium Service Provider with two locations in Maryland in Severna Park and Lanham, and another in Philadelphia, agreed to comment on the record to shine positive light on Apple.

"We're doing very well, we've expanded, and we opened a new pure retail location in 2015. Apple give us great support and guidance," said Dana Stibolt, President of MacMedics. "We're very encouraged by the upward trends over the last year, and in fact we're hiring more staff for all locations for both in-lab and on-site."

The other sources asked not to be identified. Apple and GameStop did not respond to requests for comment.

Article Link: Apple Resellers and Service Providers Speak Out Following Simply Mac Closures
 

citysnaps

macrumors 603
Oct 10, 2011
6,255
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San Francisco
"We're doing very well, we've expanded, and we opened a new pure retail location in 2015. Apple give us great support and guidance," said Dana Stibolt, President of MacMedics. "We're very encouraged by the upward trends over the last year, and in fact we're hiring more staff for all locations for both in-lab and on-site."

Sounds good to me.
 
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guzhogi

macrumors 68040
Aug 31, 2003
3,074
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Wherever my feet take me…
I'm dating myself here, but I can't help but think of the Mac Clones of the 90's. Some were pretty good. From some stories I've heard, maybe a little too good. I guess they were eating too much into Apple's profits which is why Apple didn't license Mac OS 8 to them. Of course, this is all anecdotal evidence, so take with a grain of salt.
 
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69Mustang

macrumors 604
Jan 7, 2014
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In between a rock and a hard place
Considering Apple is squeezing the profit margins of Authorized Resellers, I wonder how the smaller retailers can compete selling Apple products at retail prices while huge sellers like B&H Photo or even Best Buy can offer massive discounts.
It ain't easy. That's why so many of them don't last. When you're entirely dependent on one company for your survival it can be tough. I try to buy small and local/independent when it makes sense. $10-20 difference, I'll buy from the little guy depending on the item. Retail? I have an aversion to paying retail pricing. The Best Buys of the world can afford to give great deals because they aren't solely dependent on one manufacturer. I've found they're much easier to bargain with since the little guy usually doesn't have as much wiggle room.
 

Avieshek

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69Mustang

macrumors 604
Jan 7, 2014
7,461
14,021
In between a rock and a hard place
Opinion 1
"We're doing very well, we've expanded, and we opened a new pure retail location in 2015. Apple give us great support and guidance," said Dana Stibolt, President of MacMedics. "We're very encouraged by the upward trends over the last year, and in fact we're hiring more staff for all locations for both in-lab and on-site."

Sounds good to me.
Opinion 2
It's so sad. Really, Team Cock/Crook/Crack?

Hope, doesn't becomes the same story from MacRumors one day. "We were a Apple news site for 20 years..
https://www.change.org/p/apple-bring-back-the-17-inch-macbook
Two people read the same article and come away with diametrically opposed opinions. Guess it all comes down to where Apple lies on your emotion meter. It's apropos of nothing, just an interesting thing that popped into my head. The article doesn't come down one way or the other.
 

pat500000

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Jun 3, 2015
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it's the circle of life.it reminds me of sim city game when buildings close down and renews again after decades.
 

Brooklynscholar

macrumors newbie
Sep 15, 2014
27
19
Brooklyn New York
I'm pretty sure that the reason these "simply Mac" people went out of business is because of plain old ****** service. They were not living up to apples standards for quite some time. so frankly it was inevitable. Its always easier to blame Apple than to realize your own shortcomings.
 

Avieshek

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Dec 7, 2013
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Two people read the same article and come away with diametrically opposed opinions. Guess it all comes down to where Apple lies on your emotion meter. It's apropos of nothing, just an interesting thing that popped into my head. The article doesn't come down one way or the other.
The positive point talks about the previous year in 2015 (2014 perhaps?). It's 2017. A distribution cycle is closing down for Macs.

Staff member
Sad to continue to see this. Not long Ago, Minnesota lost First Tech computer sales, which was part of the original Team Electronics chain. One of, if not the first official corporate reselles of Apple computers.
 

FrenchRoasted

macrumors regular
Sep 21, 2016
215
1,196
Well, if it "just works", why would you need a repair shop? /s
We can see the trend with non repairable products - soldered ram and glued cases/HDs. Just slide your Apple device in the return chute, and they'll decide how much to credit you on your next purchase. /s(0.5)
 

poverby

macrumors newbie
Jan 17, 2017
4
3
The decline of independent mac resellers is actually OK with me. Apple does a better job of selling and servicing its products.

For example, Best Buy doesn't do a great job of selling Apple products, at least at my local store. The products are farther away from the door than nearly all the other computers. The sales people are overbearing and not knowledgeable about Macs. Also, the Simply Mac in my area has a bad reputation for being poorly managed. As an Apple investor, I'm actually relived this store is shutting down.

So, I would like to see Apple slowly take over all of its own retail. I think it would be a good business move and good for its customers.
 

Tycho24

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Aug 29, 2014
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After finishing the article I was confused to what it is saying. All I got is some folks like being an Apple reseller and others don't. I think you summed it up well.
Lol, absolutely!
I think what we had here was someone doing research for an article, thinking they were going to find out something definitive, but instead finding only vague & contradictory, unhelpful stories.... yet being "too far in" to back out of writing, what is now, a pretty crappy article.
 

Rogifan

macrumors Core
Nov 14, 2011
21,901
27,378
At least you reached out to Apple. Would be nice to hear both sides. Most of what we get these days on rumor sites is all one sided with people believing whatever conforms to their existing biases.
 
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tubeexperience

macrumors 68040
Feb 17, 2016
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As I said before:

This is part of Apple's consolidation of control of its products.

ie. No one else, but Apple is allowed to service Apple products (at least according to Apple).
 
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keysofanxiety

macrumors G3
Nov 23, 2011
9,534
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The positive point talks about the previous year in 2015 (2014 perhaps?). It's 2017. A distribution cycle is closing down for Macs.
No, it said that they opened a new store in 2015. Doesn't necessarily mean that's the date of the interview.

Once again, people here cherry pick what they want to back up their argument and completely ignore or gloss over the stuff that opposes it. However it's a little rarer in this instance, as it's got both positive and negative points in the same article. You'd hope this might stop posters from painting an overwhelmingly gloomy picture of Apple, but no; it has to be all bad.

I know plenty of AASPs who are perfectly content with their business from Apple. I guess they must be wrong too.
 

netsmurf

macrumors newbie
Jan 25, 2017
1
1
Sad to continue to see this. Not long Ago, Minnesota lost First Tech computer sales, which was part of the original Team Electronics chain. One of, if not the first official corporate reselles of Apple computers.
Happening in many places.
After providing 25 years of service, the ONLY AASP in Bermuda has ceased operation.
Currently, there is absolutely no way to get warranty service in the country.
A sad day for Apple fans.
 
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