Reseller May Take ‘Hit’ When Apple Arrives

December 9, 2008

The local Apple reseller in Santa Barbara (Calif.) may see his sales drop 30 percent in the first year after a new Apple retail store opens in the city next Spring. The CraigSmithBlog.com Web site interviewed Mac Mechanic owner Mike Bishop, who estimates Apple is spending $2 million to reconstruct the building at 928 State Street, and signed a 10-year lease for $67,000 a month. “The future looks kind of bleak,” Bishop told Smith. He recently purchased the building he was formerly renting, and renovated the interior to closely match Apple’s own stores. He says his profit margin is just eight percent, which Apple stores can undercut simply by offering the company’s standard 10 percent educational discount. “It’s not fair!” Bishop said. Resellers in other cities have seen a 20 to 30 percent decline in business after the arrival of an Apple store, he said. See a construction photo and read the full story here.

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{ 3 comments… read them below or add one }

vaporland December 9, 2008 at 2115

In Richmond VA, reseller CapitolMac has seen service and sales increase since the opening of the Apple Store in Short Pump Town Center.

A good reseller can do well when Apple boosts sales in a specific area, and then drops the ball on service for all but the standard mainstream computer user.

The CapitolMac team is knowledgeable and friendly, and actually receives referrals from the Apple Store for particularly unusual custom configurations.

If Mac Mechanic has a good service department, they’ll do fine. There’s more money and better margins for independents in service than retail sales anyway.

It would be worth their while to forge a relationship with their local Apple Store staff.

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ttspeedo December 9, 2008 at 2348

I worked in the Pasadena Apple Store 5 years ago. Both of Pasadena’s Mac resellers are still in business. We used to refer customers to the other stores when they were looking for peripherals or accessories outside of the narrow offerings of the Apple Store. Support for older models was also a big plus for the resellers, since the Apple Stores (at least at the time) limited their service offerings to newer models.

So, I hope Mac Mechanic stays sharp and his business increases. If he plays his cards right and offers customers products and services that can’t be found at the Apple Store, there should be room enough for both players in SB.

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Chadracker Bhortisch December 12, 2008 at 2100

“It’s not fair!”

Ahuh. Welcome to Capitalism, Slappy. Offer a desirable product or service the Apple Stores don’t, and you’ll survive. Don’t, and you’ll be applying for a Specialist position at the new store. Look on the bright side – maybe you can get some bailout money from the government!

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