Economics the other way around – Apple

In Uni we have learned that if you cut out the middle man in your supply chain you are making more profit if you are the product manufacture / supplier and you can provide the product cheaper than your retailers (if you want to). Apple just does it, the price thing,  the other way around.

Today I was after an iPod classic with 120GB (actually just a little over 111GB net) to support my whole library as it has outgrown the older classic with 60GB. I was checking the Apple Online Store and found it there for AUD $ 339. As Apple is pretty strict with their price dictation to resellers I thought I would be able to buy it at officeworks or Harvey Norman for the same price or a little more expensive.

Apple Price

After arriving at Officeworks today I was wondering that the device was actually 11 Dollars cheaper than buying it at the Apple Online Store.

Officework Price

Bottom Line: You get a device cheaper at the retailer that has to buy it from Apple first off, that has to get his margin out of it and has to pay for staff and store retail space and so on. So imagine what apple is making out of it without having these kind of costs. Well done. The Online Store experience for some might be worth the additional buck, not for me.

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Torsten J. Koerting

Torsten J. Koerting is a project management-, paragliding- and Outdoor Enthusiast, Consultant, Author of several books and engaged as a speaker at many conferences. As Managing Partner at projectyzer he is specialised in supporting companies and organisations in reinventing their strategy as well as turning projects around that are in trouble. He worked in Europe, US and Australia for more than 20 years for global Blue Chips. He does hold the German and Australian Citizenship and lives with his wife and two kids between Europe and Australia. He is also a certified Bank Clerk, Executive Bachelor and Project Management Professional (PMI) and used to be Board Member of the PMI Queensland Chapter (Australia).

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