Can someone explain Apple's pricing?

mac-er

macrumors 65816
Original poster
Apr 9, 2003
1,454
0
Apple sells iMac for $1499
Reseller sells iMac for $1499

If the reseller is selling the product for the same price as the manufacturer, how is the reseller making any money at all?
 

36183

Guest
Jun 24, 2004
418
0
apple like to make a few extra bucks when they sell their own porducts.
 
Comment

36183

Guest
Jun 24, 2004
418
0
grapes911 said:
Its probably some bulk discount.
i dont think it is a bulk discount, but apple sell them at lower prices to resellers so they can sell it at porfit.

while apple makes as much money as they can selling directly through them selves
 
Comment

ziwi

macrumors 65816
Jan 6, 2004
1,087
0
Right back where I started...
Actually the resellers sell it for $5 less so Apple must charge a premium ;)

The resellers get a lower purchase price from Apple. It is like the invoice on a Car there is the invoice price you see and the 'real' invoice price that the dealer paid the manufacturer. Nothing is what it seems ;)
 
Comment

grapes911

Moderator emeritus
Jul 28, 2003
6,995
3
Citizens Bank Park
bobx2001 said:
i dont think it is a bulk discount, but apple sell them at lower prices to resellers so they can sell it at porfit.

while apple makes as much money as they can selling directly through them selves
Yeah, but if I'm a reseller and I call apple and say I need 1 iMac do you really think they are going to give me a discount?
 
Comment

36183

Guest
Jun 24, 2004
418
0
grapes911 said:
Yeah, but if I'm a reseller and I call apple and say I need 1 iMac do you really think they are going to give me a discount?
you would not be much of a reseller if you only ordered one imac ;)
 
Comment

grapes911

Moderator emeritus
Jul 28, 2003
6,995
3
Citizens Bank Park
bobx2001 said:
you would not be much of a reseller if you only ordered one imac ;)
Exactly. But I could own a store that sells PCs and a client wants an iMac. I could order just one. I'm a reseller, but apple probably wouldn't give me the discount. Unless I order in bulk.
 
Comment

strider42

macrumors 65816
Feb 1, 2002
1,460
6
grapes911 said:
Exactly. But I could own a store that sells PCs and a client wants an iMac. I could order just one. I'm a reseller, but apple probably wouldn't give me the discount. Unless I order in bulk.
You aren't an apple reseller then. You have to get a contract with them to be a reseller. Every retail company works that way. Jsut because youa re reselling it doesn't make you a reseller. Apple sells them wholesale to the authorized resellers, just like everyone else.

For a parellel, I used to work a bagel shop when I was in highschool. Anyone could come in and buy a bagel and resell them if they wanted to. But only those we had a business relationship with got the wholesale price.
 
Comment

grapes911

Moderator emeritus
Jul 28, 2003
6,995
3
Citizens Bank Park
strider42 said:
You aren't an apple reseller then. You have to get a contract with them to be a reseller. Every retail company works that way. Jsut because youa re reselling it doesn't make you a reseller. Apple sells them wholesale to the authorized resellers, just like everyone else.
Thats what I'm trying to say. Apple would never make a reseller deal with someone that is going to purchase 1 (or even just a few macs). They will only give the deal if someone if going to purchase many macs. Thus, it a type of bulk discount.
 
Comment

mac-er

macrumors 65816
Original poster
Apr 9, 2003
1,454
0
edesignuk said:
Because Apple don't sell the iMac to the reseller for 1499 :rolleyes:
I know Apple didn't sell direct to consumers until 1998, and that pricing strategy worked.

But, wouldn't it make more sense for Apple to now sell below reseller prices? (i.e. factory direct) Their sales would increase (making up for the discount), and they would begin to shift totally to direct sales.
 
Comment

grapes911

Moderator emeritus
Jul 28, 2003
6,995
3
Citizens Bank Park
mac-er said:
I know Apple didn't sell direct to consumers until 1998, and that pricing strategy worked.

But, wouldn't it make more sense for Apple to now sell below reseller prices? (i.e. factory direct) Their sales would increase (making up for the discount), and they would begin to shift totally to direct sales.
Could they handle all those direct sales though?
 
Comment

dornoforpyros

macrumors 68040
Oct 19, 2004
3,070
3
Calgary, AB
doesn't apple fix the prices that re-sellers can price at? I mean you seldom see Mac products(not counting discountinued or refurbs) in any resellers store for +/- $5-$10 do ya?
I think I asked a seller once and he said apple does that so the consumer will be paying the same price wherever they go.
 
Comment

strider42

macrumors 65816
Feb 1, 2002
1,460
6
dornoforpyros said:
doesn't apple fix the prices that re-sellers can price at? I mean you seldom see Mac products(not counting discountinued or refurbs) in any resellers store for +/- $5-$10 do ya?
I think I asked a seller once and he said apple does that so the consumer will be paying the same price wherever they go.
Yup, that's true, and I believe Apple has been investiagted for this (by the EU I tyhink).

Resellers get around it though by offering bundle deals that can be worthwhile.


And as for the questions as to why apple doesn't undercut the resellers, that's because the moment they do that, they resellers decide its not worth their while to sell macs. Apple needs to keep multiple retail channels open. Besides that, by keeping the prices the same as their reselllers, they make more profit. Lowering how much monay they are making doesn't make much sense.
 
Comment

yellow

Moderator emeritus
Oct 21, 2003
16,033
1
Portland, OR
mac-er said:
But, wouldn't it make more sense for Apple to now sell below reseller prices? (i.e. factory direct) Their sales would increase (making up for the discount), and they would begin to shift totally to direct sales.
What a great way to screw your resellers and piss them off, more then you already have with Apple Stores! And why cut into your profit margins when you're making the $ either way?
 
Comment

mac-er

macrumors 65816
Original poster
Apr 9, 2003
1,454
0
yellow said:
What a great way to screw your resellers and piss them off, more then you already have with Apple Stores! And why cut into your profit margins when you're making the $ either way?
It seems like they are already doing that by their retail strategy (sending products to Apple Stores first, etc). :rolleyes:
 
Comment

Sun Baked

macrumors G5
May 19, 2002
14,874
57
mac-er said:
It seems like they are already doing that by their retail strategy (sending products to Apple Stores first, etc). :rolleyes:
You also have to lay quite a bit of blame on Apple's distributor, who may tend to send products to their biggest clients first.

Piss off the distributor, and you may not get anything at all... and I think some of the people suing Apple did just that.

But it still is up to Apple to keep the distributor supplied with product, even if Apple had no say in how the distributor sent stuff out.

Note: the current CA lawsuit should really shed some light how the AppleStores fit into the distribution network. And could end up forcing Apple to supply their own stores through Ingram if they don't right now. Though as the biggest client for a specific product, they'd still get preferential treatment.
 
Comment

CanadaRAM

macrumors G5
Apple does not fix the prices that resellers can sell at; that is against the law in many jurisdictions. They can set policy on what prices can be advertised, however.

However, that $1499 machine you see? Apple (or their distributor) charged the dealer perhaps $1440 for it. A dealer, even if they buy in volume, seldom gets more than a 3% discount from Apple.

Then when you whip out your Gold MasterVisaExpress card, the bank will take 2% of the total as commission on the charge card transaction.

So there is no room for the dealer to move the price, even if they wanted. So you want to know why the sales-thing in CompuBuy is uninterested in helping you with an iMac G5 purchase? It's because they make more commission selling a video game and a box of CD-R to a Windows person than they do on the entire iMac G5.
 
Comment
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.