Apple Resellers and Service Providers Speak Out Following Simply Mac Closures

[CerealKillerOU812]

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

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.

stricts 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

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

 

[michaelant]

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.

Well, the article isn't saying one thing. I'm fine if a situation is more complex than A, or not A. I found it especially interesting that even the anonymous sources, some of them, were happy with how things are going. Obviously not going well for others, though.

 

[Sam_S]

I like the convenience of being able to walk into a reseller and purchase the computer that day, however with online shopping getting bigger and bigger I am sure that small resellers will continue to be priced out of the market.

 

[ih8MRidiots]

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.

No, what we have here is an article that isn't shoving an opinion down your throat. Sure, it would have been great to have Apple's take on it, but anyone with a brain knows that is never going to happen. Did it really pain you that much to make an educated decision for yourself without being told how to feel?

 

[Porco]

It's difficult to really know without seeing raw figures, which I assume they're not allowed to disclose (or else why wouldn't the disgruntled ones?).

In one respect Apple doesn't owe anyone else the right to sell its products or authorise official service. But it does seem like it's sensible to do that, and support those who want to do that well properly.

On the other hand it's not at all difficult for me to believe the accusation that Apple offers tight profit margins and/or onerous terms for other could be true. But as I say, it's hard to know without actual evidence.

Whatever the truth, I think Apple is a stronger brand and iOS and macOS are stronger platforms if they have a wide variety of resellers and service options. So if they are making it difficult for that to happen I think it is something they should address. If they aren't making it difficult I guess the proof will be that these recent cases will be outlying blips at least partly due to other factors, not a long-term trend I suppose. So we will see.

 

[kazmac]

Not surprising to read. Almost 18 years ago my teal dead in the water iMac G3 was not repaired by a third party seller for weeks because I eventually discovered they were only getting $20 to fix it under warranty. They lied to me multiple times about parts, so I finally had to call Apple and get the repair (which ultimately resulted in a new, replacement G3 iMac from Apple and my staying with them until late last year).

Now I understand that my particular 3rd party repair case is a rarity, but given Apple's money over all else and now disposable products; but hearing about these closures, I am not sure what else I would expect at this point.

 

[zaaach48]

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.

This. Apple is all about control, and resellers have been getting the shaft ever since Apple Store started popping up. They want customers to have the same (hopefully great) experience any time they deal with Apple, and the resellers affect that experience beyond their control.

Add this to the fact that even the Apple Store themselves are doing less and less physical repairs (especially on Macs), and shipping the Macs out to depot instead. Partially due to the fact the products are harder to service now, and the extremely high volume and demand for Genius Bar appointments.

 

[ih8MRidiots]

It's so sad. Really, Team Cock/Crook/Crack?

Hope, that doesn't become 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

You're really pushing your change.org petition in this thread? Get a grip. Team "cock" (real clever by the way) doesn't owe you anything. Go buy a PC if you're so butthurt about not having a 17" laptop.

 

[samcraig]

Smart business for Apple - to a point. It leaves cash in their account longer. Not that they really need it. And these service centers provide an invaluable extension to reach customers where Apple can't.

Some bean counter at Apple must have figured out the interest on the money sitting in their account vs paying it out earlier and, well - there you go.

 

[CerealKillerOU812]

I worked in management for a large service provider. Owner complained all the time, and after looking into things, it was often baseless and an excuse to not compensate employees and I'm sure is the contributor to some of the complaints in this article. There was plenty of room for profit, but his poor business sense and inability to see the importance of knowledgeable and reliable personnel minimized potential of the bussiness. For example, one practice was to offer "in home setup" at the cost of $90 an hour to the customer. The employees sent were paid $9 per hour (the normal wage payed to experienced technical personnel by the company... already abysmal) , plus .50 per mile. For this reason, employees of course did not want to offer the service, or perform it when inquired about, which was often. Customers would have already purchased apple products, plus all wires and accessories needed for the setup from us, which profits are much higher on so the profit to the company for the setup portion was close to 1000% for the company. Suggested we offer employees an incentive for selling and performing the service. Was promptly shot down, as the owner didn't want to take any less profit from the service. Interest in it dwindled and was eventually no longer offered as a result. This is but one of many examples of areas where there's massive profit potential. Another service provider in the same town, who takes better care of employees, and as a result has better quality workers and more loyal customers has been succefful for years and just expanded. It's all about how the business is run. Gamestop was undoubtedly not paying for quality and knowledgeable staff either. Just like anything else, you get what you pay for and it makes a difference.

 

[citysnaps]

Opinion 1


Opinion 2


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.

More than opinion. It's an actual company owner willing to go on the record with her name. Much more valuable than an unnamed "source."

 

[rlmcguire]

Apple is not interested in dealerships (resellers)

 

[konqueror4u]

Many voters of MI, WI, and PA would say yes and turned the election. This kind of manufacturing was a big part of the election rhetoric as well as Trumps late campaign strategy, one that won the race. Carrier moving to Mexico was mentioned how many times? Car manufacturing... the whole "we don't make anything anymore" line.

Not everyone has or wants a college degree and also manufacturing jobs in the U.S. tend to pay well, even the non-union shops. Unemployment among the lower educated is at a historic high but they want to work. So yes, these are the types of jobs they want to see back. I doubt they would see these jobs as "low value" because they put food on their table and give them a sense of purpose. Moreover, your categorizing it as "low value" seems at odds with the fact people line up for these manufactured products, and compliantly vociferously here when they can't get them -- the AirPods of late.

But Apple is almost automating its factories in China so do you think they will hire millions in US instead of Automation? Do you think bringing back production in the form of automated factories is going to help with unemployment? Might be a few technicians jobs but those are not manufacturing jobs and they require certain technical skill.

 

[CerealKillerOU812]

Not surprising to read. Almost 18 years ago my teal dead in the water iMac G3 was not repaired by a third party seller for weeks because I eventually discovered they were only getting $20 to fix it under warranty. They lied to me multiple times about parts, so I finally had to call Apple and get the repair (which ultimately resulted in a new, replacement G3 iMac from Apple and my staying with them until late last year).

Now I understand that my particular 3rd party repair case is a rarity, but given Apple's money over all else and now disposable products; but hearing about these closures, I am not sure what else I would expect at this point.

They lied to you about what they were getting too. Lol

 

[McTaste]

They AREN'T glorified tv repair people?

 

[ih8MRidiots]

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.

"As an investor" you have some pretty terrible visions. Sounds like you want apple to pull a starbucks and be on every other street corner. Obviously that's not feasible in Apple's market. So lets get rid of every AASP, every 3rd party retail that sells Apple prodcuts. While were at it let's kill off AT&T and Verizon. Make it so only Apple can sell iPhones to people. You now just lost probably a quarter of sales. Sounds like a great plan. But hey, "as an investor" I'm sure you know a lot more than us, right?

 

[ftaok]

Many voters of MI, WI, and PA would say yes and turned the election. This kind of manufacturing was a big part of the election rhetoric as well as Trumps late campaign strategy, one that won the race. Carrier moving to Mexico was mentioned how many times? Car manufacturing... the whole "we don't make anything anymore" line.

Not everyone has or wants a college degree and also manufacturing jobs in the U.S. tend to pay well, even the non-union shops. Unemployment among the lower educated is at a historic high but they want to work. So yes, these are the types of jobs they want to see back. I doubt they would see these jobs as "low value" because they put food on their table and give them a sense of purpose. Moreover, your categorizing it as "low value" seems at odds with the fact people line up for these manufactured products, and compliantly vociferously here when they can't get them -- the AirPods of late.

My use of the term "low value" refers specifically to the task of assembling iPhones. To me, this isn't a manufacturing job in the sense of a traditional, well paying manufacturing job. It's basically using humans to do the job that a robot is much more suited to doing.

Well paying manufacturing jobs in this country are more skilled than putting together iPhones. I don't think those are the jobs that we really want here. And in reality, if iPhone assembly did come to the US, the 1,000's of Chinese laborers we see at Foxconn would be replaced with a few robots and a dozen robot operators, which would be a skilled job.

At the risk of going way off topic, we, as a country, have to follow through on the promise we made ourselves years ago when low value manufacturing was shipped off to other countries. That promise was that low-skilled and unskilled manufacturing jobs were going to be replaced by high-skilled jobs needed to support the offshored manufacturing. The reality is that the high-skilled jobs never materialized here at a high enough rate to offset the loss of the jobs on the factory floor.

 

[Tycho24]

No, what we have here is an article that isn't shoving an opinion down your throat. Sure, it would have been great to have Apple's take on it, but anyone with a brain knows that is never going to happen. Did it really pain you that much to make an educated decision for yourself without being told how to feel?

One literally CANNOT "make a decision" based on that.
You have one group saying: "we're making more money than ever, and expanding our businesses... there is no issue whatsoever", while others are saying: "we are getting squeezed out of business & forced to do free repairs".
There is ZERO context for which people are more trustworthy. There is no "educated decision" here.
You may blindly choose to believe one or the other; but the EXACT same complete lack of evidence exists for both narratives & we know nothing about the character or motivations of anyone interviewed for this article.

While I did NOT expect Apple to comment (I guess I have a brain, according to you!); I do think that for this piece to be of ANY value whatsoever, the findings would've had to be something like this: "according to the 40 people interviewed, 31 said things are rougher, due to new policies, while only 9 said they're thriving" or vice versa.
THEN, we could've made an educated decision.

 

[CerealKillerOU812]

You're really pushing your change.org petition in this thread? Get a grip. Team "cock" (real clever by the way) doesn't owe you anything. Go buy a PC if you're so butthurt about not having a 17" laptop.

Really! Lol

 

[konqueror4u]

I think the problem is with being an exclusive Apple reseller. I think it is time for the resellers to think beyond one company concept. I think reseller should adapt something similar to Best buy along with repair programs.

 

[Bacillus]

Maybe Apple doesn't value 3rd party service because they haven't got a clue about service/provisioing. AppleStores are being trampled by customers, as millions of batteries/screens have to be replaced.
There are no waiting lines, no cashers, no pick-up bars. No signs where to go. Just herds of people colliding in a prairie of wooden tables and lots of guys randomly running around with iPads "planning" repairs. That is, everyone ends up in the same queue. There seems no process in place. Nobody has a clue when he's serviced. There is no ticket counter, timer or whatever. Being told you could cash-and-carry your device, it appears you can wait for 2,3 hours, return and wait again for an hour. Everybody sits around in the same wooden tables. It's maddening. There is a backlog (guess why?) but nobody can say how much. This is what you get when fashion/retail people run the show without a clue about industry.
They really need some provisioning/process people in place, like Ikea, Airports or car industry have.
Angela, go study any brand supermarket (if you know what that is)

 

[CerealKillerOU812]

Apple is not interested in dealerships (resellers)

That sounds like just your unfounded opinion. Having managed one, I can tell you they are very interested.

 

[konqueror4u]

My use of the term "low value" refers specifically to the task of assembling iPhones. To me, this isn't a manufacturing job in the sense of a traditional, well paying manufacturing job. It's basically using humans to do the job that a robot is much more suited to doing.

Well paying manufacturing jobs in this country are more skilled than putting together iPhones. I don't think those are the jobs that we really want here. And in reality, if iPhone assembly did come to the US, the 1,000's of Chinese laborers we see at Foxconn would be replaced with a few robots and a dozen robot operators, which would be a skilled job.

At the risk of going way off topic, we, as a country, have to follow through on the promise we made ourselves years ago when low value manufacturing was shipped off to other countries. That promise was that low-skilled and unskilled manufacturing jobs were going to be replaced by high-skilled jobs needed to support the offshored manufacturing. The reality is that the high-skilled jobs never materialized here at a high enough rate to offset the loss of the jobs on the factory floor.

Spot on. But the problem with high skilled jobs is we need to learn and apply more skills such as Analytical and critical thinking , optimized solution approach, some technical and other domain specific skills. Just learning or knowing the skill is not sufficient what matters most is applying the right skill at the right time to solve the problem effectively which is a strong requirement for highly skilled jobs.

 

[2IS]

At some point, Apple will run out of ports to remove and vendors to screw over. When that happens, their bottom line gets affected. When that happens, they'll either wow us with a must have new product or they'll be the next RIM/Nokia

 

[logicstudiouser]

We used to have several authorized Apple resellers and repair dealers in my city, but sadly, all but one have died since the Apple Store came to my city almost 8 years ago now. We now have 2 Apple Stores and although I find some of the staff are helpful, it is not the same as a few of the authorized dealers I used to go to who knew the mac like no other person I know.