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How Apple's deal with Amazon turned over small recycling companies



When John Bumstead looked at listings for his products on Amazon.com in early January, he expected the guillotine to fall.

A small online business owner from Minneapolis, Minnesota, Bumstead specializes in repairing and selling old MacBooks, models he usually purchases from recycles and straightens himself. But on January 4, Bumstead was failing in the entire business, as his listings were removed from the platform due to a new policy limiting everyone, but the largest companies and specially-developed providers, from selling Apple products.

"You would go to your current items, your inventory and just see them disappear that morning," says Bumstead of the fateful day the politics came into effect, confirming the fear he first expressed in an interview with Motherboards in November last year. "I had pretty much all my stock, but when the day went, you could see them swinging down to two or three [listings] when they took them away."

For small sellers like Bumstead, who runs their home improvement business for many years under the name of RDKL, Inc., the deal means that you can no longer sell new or refurbished Apple products at Amazon Marketplace, the fast-growing third-party merchant network that now takes more income than Amazon's entire online store. Some financial analysts estimate that Amazon Marketplace is worth more than doubling the company's internal e-commerce business, or around $ 250 billion.

For US and US dealers, Amazon has become the most important place to sell products that are only competing with eBay and Walmart's competing marketplaces and smaller product-specific platforms such as Etsy and Overstock.com. Nevertheless, none of the Amazon competitors gives the same robust logistics and shipping benefits the company offers its sellers, making it a top destination for online businesses.

Businesses who want to sell Apple products through Amazon must now meet one of two requirements. The first is to buy at least $ 2.5 million worth of refurbished inventory every 90 days from Apple itself or through a dealer of more than $ 5 billion in annual sales, as a wireless operator or major bookstores such as Target or Walmart. The other is to reach out directly to Apple to become an authorized reseller. Apple has not yet made its distributor claims known to the public, but to become an Apple Authorized Repair Service requires a physical retail space for customers to enter.

By cutting this deal, Apple and Amazon earn the benefits of knocking out millions of dollars worth of business for small sellers. For Apple, the move to sell on Amazon and its demand marks the company's long-standing resilience to repair vendors and resellers. Even those located within Apple's strictly controlled network have faced Byzantine restrictions on obtaining the right equipment.

Sellers both in the network and out operate entirely on the whims of a company that has struggled right to repair legislation and builds units that are notoriously difficult to rebuild. Now, small sellers have been forced by their largest platform to allow Apple to move in.





Pictures by John Bumstead's Law

For someone like Bumstead who does repairs at home, it is not practical to open a brick repair shop to become an authorized supplier. He also says that it is not possible for him to start spending millions of dollars a quarter to get inventory, he is not sure he will ever be able to sell. Bumstead says he's tried to get Amazon to tell him more about Apple's supposed authorized reseller program, but he hasn't heard back.

"People who go to Amazon now get the impression that a low-end-used MacBook costs $ 700 instead of $ 200," he says. "Amazon is literally half the online marketplace for all products. So if you take advanced, great-looking laptops available in millions of [the platform]you really hurt these products in terms of visibility to the world. People don't want to know about them and buy them, and it only leads to machines like those being deleted, rather than sold. "

For Amazon, the subject was clear. Apple did not sell on its platform before, instead selling its products through retailers such as Best Buy, and managing a large portion of online sales of new and refurbished products through its own website. But, like Nike and other major brands lately, Apple cut an agreement with Amazon on its own terms to get a crazy landing page full of names of its own under those that the company controls. It benefits Apple because it can closely control the products and pricing.

"Amazon needs brands. We know consumers are searching for brands, and then Amazon will go quite drastically to access these [products]" says Sucharita Kodali, a Forrester analyst specializing in e-commerce and consumer trends. The Amazon's primary way of acquiring well-known brands was to let third-party retailers resell them, Kodali says. "The brands have noticed and the brands want to control more of their online presence. And because Amazon is such a great presence in e-commerce, if you want to control your brand presence online, you need to check how it looks on the Amazon. "That inevitably means cutting deals and closing out what in Apple's eyes are villains.

Amazon not only claims that it has certified Apple merchants on the platform that sell real products, but also gets a rare insight into how Apple's business works online, Kodali points out. "Amazon has always said it is agnostic between first and third-party sellers, but it prefers preferring the first party more because it can control the relationship and because they own marginal information," she says. By selling directly on Amazon, Apple highlights some of its business to one of its competitors.

"You expose sales data, marginal data, units sold, causes of returns … you postpone many business secrets when you sell as a first party at Amazon," Kodali says. "There is a risk for any brand that chooses to sell [on another platform] "For example, it's probably why Apple chooses not to sell its Echo competitor, HomePod, on Amazon.com.

" As part of a new deal with Apple, we work with a select group of authorized resellers to offer one extended range of Apple and Beats products, including new releases, in the Amazon stores, says an Amazon spokesman The Verge . The company would not comment on third-party merchants who left the platform, but it recommended that any person or business wishing to sell refurbished products try to qualify for Amazon Renewed. But as made clear when the deal with Apple was announced, there are special requirements to become an Apple reseller that makes it restrictive for all but major operations.

Apple did not respond to a request for comment on this story.

"Marks and marketplaces are on a collision course and they need to figure out how to collaborate. And if not, make sure your brand is represented on the internet," says Kodali. "More brands are going to be very strict "In this case, the sellers no longer have this Amazon jus," says Kodali. "You sell someone else's product, so you are always in danger of being uninterrupted." 19659022] Photo by Michele Doying / The Verge

Bumstead is not alone in getting fired by Amazon, a number of sellers, both individuals and multi-person e-commerce, have had to sell elsewhere since the Amazon Apple agreement

As mentioned by CNN this fall, companies that specialize in outdated electronics, such as AceBeach, have been dragged away from reselling Apple products completely because on platforms other than Amazon are inconsistent (difficult and difficult. (eBay and Walmart do not impose restrictions on Apple sales, but Bumstead says discoverability is a problem on these platforms, nor does it provide the same logistical support that Amazon does.) Likewise, spoke CNET with an engineer from Colorado who says he sells a hundred thousand dollars in Apple products a year. In November, he predicted he had to switch to selling other electronics because he wouldn't switch to another platform.

In a Facebook group that Bumstead participates in, dozens of other individual salespeople have gathered over the past six months to discuss alternative marketplaces, potential remedies, and other strategies to maintain their businesses and continue to work on used Apple products. . Another seller Bumstead met through his network of Amazon dealers, Jim Ilardi, the founder of a private repair and remodeling machine, calling PiratePT Electronics. Unlike Bumstead, who specialized in MacBook products, Ilardi was unique in refurbishing old iPod Classics, a product category that Apple no longer supports or sells.

Ilardi wanted to give old iPods new shells and batteries, and eventually began replacing his hard drives with faster SSD drives, making the products better than they ever had. For those perusing Amazon for an iPod Classic, especially one with a flash drive so it was much faster than when it first came out, PiratePT Electronics was one of the few sellers available. Ilardi still maintains a positive 98 percent rating on the platform, despite Amazon's no longer allowing him to list his products.

"It was extremely successful," says Ilardi about his business. Over the past decade or so, Ilardi estimates he has sold around $ 1.2 million in refurbished iPod, with 95 percent of his business on Amazon, he estimates. Ilardi now shares his business between an Etsy store front, an eBay account, and his personal website, where he also offers screen repairs and other service work.

But Ilardi says that eBay is difficult because it does not group sellers under a single product, but instead causes users to scroll through individual listings, some of which are just easy-to-use versions from everyday eBay users. At Esty, Ilardi said at one time last year he only made a quarter of the sales he made on Amazon. But Ilardi's Etsy store has since gained its steam now, as he offers various paint jobs and more flash storage.

This is the main deal with Apple retailers: Why, for a company that trades more than $ 50 billion in revenue per quarter online retailers are such a threat? "I sell something they have completely stopped production and no longer support," says Ilardi. Apple still sells MacBooks, which makes Bumstead's business in a competitive way with Apple, but Bumstead's old-fashioned products this year are designed for people who never spend $ 800 to $ 1200 on a new computer.

iPods, on the other hand, no longer exist, except in the form of iPod Touch and refurbished or used models. "My product was sun-set," says Ilardis. "They actually got rid of it. Why would Apple and Amazon? They've gone out of that business."


For years, John Bumstead has remodeled and resold old Mac laptops, and as a result, he has become one known advocate of the right to the repair movement.
Photo by Seth Lowe / iFixit

This is where the Amazon Apple deal is uncomfortably up against the right-to-repair movement. Apple has reportedly spent years struggling to repair bills moving through nearly two dozen state legislators. Just last month, an Apple lobbyist pushed California lawmakers to draw a repair bill by claiming consumers could hurt themselves and attempt to repair iPhones.

Obviously, Apple is a giant rule that would require the company to spend and lose money because it was easier for owners to repair their smartphones, tablets, and computers, meaning more consumers could buy used instead of new ones, while individuals and Companies that are not part of the authorized network provide repair services to cut out the Apple Store and its network of vendors. Still, grouped with these services is the right to buy and sell refurbished products, making this as much environmental issue as it is financially.

The US Supreme Court decided in 2013 that consumers have the right to sell copyrighted products as long as they legally own the product. But it has not stopped companies like Apple, and now Amazon, from making resale trading prohibitively difficult. Apple is making a major shift to software services to reduce iPhone dependency, but it remains the most valuable company on the planet, largely thanks to selling massive amounts of new products every year.

We've seen this game in a number of fashions with Apple over the last few years, as well as the efforts to combat legal laws. It was the infamous battery management control at the end of 2017 that forced the company to offer reduced-cost lithium-ion battery replacement for iPhone, a licensing manager Tim Cook apparently attributed to negatively impacted sales of new units last year. Prior to this, the Industrial Trade Group revealed a report that Apple, along with other major consumer electronics companies, had systematically undermined environmental standards that would reduce e-waste.

In October, Apple confirmed that the T2 chip found in the latest line of MacBook Pros and other computers would lock the device down if certain parts, such as the logic board, were repaired without running a special diagnostic tool that was only distributed by Apple to its own network of stores and authorized repairers. For refurbishers such as Bumstead, it can put an end to the ability to repair newer MacBook Pros in the future if the machines are not going to run when reinstalled without proprietary Apple software becoming available to the public.

Finally, Bumstead says the situation has been awake. "I've had a lot of friends go out of business. It's hard to say that it was Amazon as the cause, but it's a kind of death with a thousand cut situations," he says. Bumstead has returned mainly to wholesale sales of old MacBooks, which he He says he shopped in before the Amazon Marketplace, usually he gets his hands on dozens of MacBooks from recyclers, fixes them, and sells 10 or 20 of them to a single seller.

"They tend to be people selling too. They may have stores and laptops are one of the things they sell. They can be exporters. They can sell locally or they can even put them on eBay, he says. "I make it worth buying 10 or 20 at a time."

As a result, Bumstead has begun moving much of its business to its personal website, using eBay and other platforms as a supplement. "Someone can buy a laptop on my site and I think to myself," Wow, I don't have a deadline so far this goes. No negative reviews to train. No threatening infrastructure on the platform, "he says." If I have learned from this experience, you really want to own your own platform. No one can take it away from you. "


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