back to article Apple turns the screws on reseller channel

Channel bully boy Apple is halving the early settlement discount for resellers across Europe in a phased rollout. Standard payment terms are 30 days. Previously dealers that paid invoices within 15 days were eligible for a 1 per cent rebate on the order, but this is falling to just 0.5 per cent, further squeezing Apple's …

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  1. Stewart Knight

    Every bit

    As crooked as FIFA, but without the morals.

    Microsoft would NEVER be allowed to get away with such practices!!!!

    1. DZ-Jay

      WTF?

      So there's some law that says that you must give a rebate to customers who pay early? I understand that this squeezes the profits out of the resellers. But if Apple can access customers directly, why would they want or care about middle men?

      Sure, it's not *nice*, in the ponies and rainbows Internet definition; but it is not illegal to reduce incentives to partners.

      -dZ.

  2. Chris Miller

    0.5% for 15 days

    is an APR of 12.9% - where else can I get a rate like that?

    Seriously, this kind of deal is an excellent way of persuading your customers to pay promptly. The small cost of the discount is easily offset by the saving in staff time spent chasing overdue bills with companies that never pay until after the third letter.

    1. Russ Tarbox
      FAIL

      I think you've misunderstood the entire story.

    2. Chris Miller

      No Russ, I understood it perfectly - it's your understanding of the world that's the problem.

      I buy $100,000 of kit from Apple. Along with the kit comes an invoice for $100,000 payable in 30 days. But if I pay within 15 days I can get a small discount of 1% - so I need only pay $99,000. This isn't compulsory - I can wait for the full 30 days and pay the full amount - but it's equivalent to paying 27% pa on my early payment, so I'd be foolish not to take it, if my cash flow permits.

      All that Apple have done is to recognise that with interest rates at historic lows, there's no need to keep on paying 27% as an incentive and that 0.5% discount (equivalent to 13% annual interest) is quite sufficient. Perfectly normal business behaviour.

      Russ, I'm sure you're a fine programmer (or whatever it is that you do), but please don't go into business for yourself - you'll be bust in a month.

  3. mike2R
    Devil

    "Barring channel firms from flogging its OS X Lion and the Final Cut Pro X software released during the summer also served to fuel paranoia in the Apple community that resellers are being gradually edged out of the business."

    Ha! It isn't paranoia when they really are out to get you...

  4. Adam Nealis
    WTF?

    So live within your means.

    Once a month, take the 0.5% of the money you would have used to repay Apple, and instead of giving it to Apple sell calls or puts on Apple stock.

    e.g. Right now:

    Sell 1 AAPL Call, expiry October 22, strike $ 430 to bring in $ 405, or 0.94% return.

    Sell 1 AAPL Put, expiry October 22, strike $ 340 to bring in $ 357, or 0.97% return.

    1. McToo
      FAIL

      Options trading 101

      You forgot to put "Master, I have a cunning plan..." before you posted.

      If you sold 1 AAPL 430 call on Friday at the bid, you'd have made the princely some of $3.30. Selling 1 AAPL 340 put on Friday at the bid would have made you the princely sum of $4.85 for a grand total of $8.15. This may just about cover your trading costs, unless your Apple reselling business doubles up as an Advanced Market Making business.

      You have sold these options naked, presuming that nothing will happen between now and the 21st October close to push Apple stock above 430, in which case you are then obliged to buy the options contract amount (usually 100 shares) of Apple stock at the market ask and sell them to the buyer of your call for $430. If the stock sinks below 340, you are then obliged to buy 100 shares at the market ask and sell them to the buyer of your put at $340.

      Fortunately for you, no-one would have bought your options as they are way over-priced! :-)

      Price source http://finance.yahoo.com/q/op?s=AAPL

  5. zen1
    Thumb Down

    Former Apple reseller...

    I remember back in the day when Apple first tapped into the educational market with the //e's. As a reseller back then, we were devastated when we were undercut by Apple's direct sales force. And as the product lines changed, Apple's policies have become more predatory and have essentially screwed anybody who's attempted to purchase a franchise or plunk down the substantial investment of becoming an authorized reseller.

    In todays business climate, if I were a reseller of apple kit and had that crap pulled on me, I'd probably liquidate all my inventory, bail and go for something a little more profitable.

  6. Alan Denman

    Sellers to the masses amasses masses.

    It just sometimes seems to be a bottomless pit when working for them.

  7. Alan Denman

    Crumbs folks.

    Joyous crumbs but that's your lot with Apple.

    Resellers should be glad to think of themselves as devotees.

    With Apple there are plenty of people wiling to work for nothing.

  8. Arctic fox
    Megaphone

    A hypothetical situation.

    Let us just imagine that "A Major Software Giant" decided to to buy themselves a large OEM such that they became a combined os *and* pc producer. They then set up their own dealer network and proceeded once they were doing well to destroy the basis of the business of all other retailers who had hitherto sold their products. I wonder what we would be seeing on many threads here at El Reg in response to that? One thing I am absolutely sure of is that *if* a certain company based in Redmond, Washington were to do such a thing there would be few if any postings here defending that behaviour and a huge number of postings (my own included) strongly criticising it. In the event that Cupertino's products continue to dominate the tablet market what they will end up with is owning that whole market from end to end. production of os and hardware, wholesale, retail you name it. Even at their worst behaviour in the 90s MS were never able to sew up the pc market in that way. Apple do make very good kit, I do not deny that for one split second. However, we had better hope that competitors in that pad market manage to up their game because if they do not then tablet space will become a wholly owned subsidiary (in *all* its parts) of Apple Corp. One would have to be a *seriously* uber fanboi to welcome that outcome.

  9. mrweekender
    Stop

    I don't see what the problem is..

    ..if you put all of your eggs in one basket - as the saying goes. Same goes for developers who develop exclusively for iOS, not a wise decision either. Given previous experience, sooner or later your world is going to be changed significantly, it's about being agile enough to deal with that or just don't do business with them. It's not going to help the resellers and it's not going to make resellers happy who have stuck by Apple during difficult periods but this is business and it can be ruthless and nasty, especially when you're talking about the vast amounts of money involved. Apple's core strategy is to make money and lots of it, deal with it or get out.

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