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.

apple_premium_reseller
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.

Top Rated Comments

69Mustang Avatar
71 months ago
So the moral of the story seems to be, as with all things, YMMV. Some are doing badly, some are getting by, and some are thriving. Welcome to this thing we call life.
Score: 33 Votes (Like | Disagree)
2457282 Avatar
71 months ago
So the moral of the story seems to be, as with all things, YMMV. Some are doing badly, some are getting by, and some are thriving. Welcome to this thing we call life.
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.
Score: 8 Votes (Like | Disagree)
Lamborrari Avatar
71 months ago
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.
Score: 7 Votes (Like | Disagree)
69Mustang Avatar
71 months ago
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.
Score: 7 Votes (Like | Disagree)
meaning-matters Avatar
71 months ago
Sounds like Apple is a commercial company.
Score: 4 Votes (Like | Disagree)
840quadra Avatar
71 months ago
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.
Score: 4 Votes (Like | Disagree)

Popular Stories

top stories 2jul2022

Top Stories: M2 MacBook Air Release Date, New HomePod Rumor, and More

Saturday July 2, 2022 6:00 am PDT by
The M2 MacBook Pro has started making its way into customers' hands and we're learning more about how it performs in a variety of situations, but all eyes are really on the upcoming M2 MacBook Air which has seen a complete redesign and should be arriving in a couple of weeks. Other top stories this week included a host of product rumors including additional M2 and even M3 Macs, an updated...
Mac Studio IO

Apple Begins Selling Refurbished Mac Studio Models

Thursday June 30, 2022 7:42 pm PDT by
Apple today began selling refurbished Mac Studio models for the first time in the United States, Canada, and select European countries, such as Belgium, Germany, Ireland, Spain, Switzerland, the Netherlands, and the United Kingdom. In the United States, two refurbished Mac Studio configurations are currently available, including one with the M1 Max chip (10-core CPU and 24-core GPU) for...
airpods pro 2 1

AirPods Pro 2 No Longer Expected to Feature Built-In Heart Rate or Body Temperature Sensor

Sunday July 3, 2022 8:07 pm PDT by
While past rumors have indicated the upcoming second-generation AirPods Pro will feature a built-in heart rate and body temperature sensor, Bloomberg's Mark Gurman has cast doubt on those rumors turning out to be true, saying instead such a feature is unlikely to come anytime soon. "Over the past few months, there have been rumors about this year's model gaining the ability to determine a...
Apple Watch 8 Unreleased Feature Thumb

Apple Watch Series 8 Model Rumored to Feature 5% Larger Display

Monday July 4, 2022 5:50 am PDT by
Apple is working on an Apple Watch Series 8 model with a larger display, according to DSCC's Ross Young and Haitong International Securities's Jeff Pu. In October last year, Young suggested that the Apple Watch Series 8 could come in three display sizes. Now, responding to a query about the rumor on Twitter, Young claims that the additional display size joining the Apple Watch lineup will be ...
macbook air m2

Exclusive: Apple Plans to Launch MacBook Air With M2 Chip on July 15

Wednesday June 29, 2022 5:23 pm PDT by
The redesigned MacBook Air with the all-new M2 Apple silicon chip will be available for customers starting Friday, July 15, MacRumors has learned from a retail source. The new MacBook Air was announced and previewed during WWDC earlier this month, with Apple stating availability will begin in July. The MacBook Air features a redesigned body that is thinner and lighter than the previous...