Some Apple sellers on Amazon could see their business dry up

Apple recently has sealed a deal with Amazon to sell an expanded range of products, including iPhones and iPads, on the massively popular e-commerce platform. Counterpoint Research says it’s a win-win game for both firms, with Apple being able to better manage pricing, warranties and the overall customer experience. But what about the small sellers?

Ben Fox Rubin, writing for CNET today:

About five years ago, Page Weil needed to make some extra cash to support his wife going to nursing school and help pay for costly surgery she needed. He turned to Amazon’s marketplace for help.

He started listing used electronics through the site, finding particular success selling used and refurbished Apple products, including discontinued keyboards and iMac desktops. In the past year, he sold roughly $300,000 worth of mostly Apple products on Amazon, for an after-tax profit of about $40,000.

“It was really a great thing for our family,” the 35-year-old consulting engineer from Colorado said, adding that the side business helped him pay off the medical bills, nursing school and existing student loans.

But that was then. Weil is now among a group of Apple sellers on Amazon who are about to see their business dry up.

Make no mistake, this is going to impact many smaller businesses like Weil’s.

As Counterpoint Research’s Sunday post cautioned, third-party vendors who are selling their warez through the Amazon platform will be phased out by January 2019.

“Apple is attempting to regain control over its iPhone sales on one of the biggest online channels. Third-party vendors were selling on Amazon and it was near impossible for Apple to control the supply chain, assure quality control and price,” said Maurice Klaehne, Research Analyst at Counterpoint.

He says the refurbished and repair market in particular might take a hit as these companies will be forced to either move off the Amazon platform or go through the authorization process—even if it’s unlikely that many will achieve authorized status in this new situation.

Such a major deal was most likely in the works for some time and probably has little to do with Apple’s latest earnings and its decision to stop reporting iPhone numbers, he added. It’s a consolidation of power with and between Apple and Amazon, that’s what it is. The main losers are without a doubt the smaller vendors that will no longer be able to benefit from selling Apple products through Amazon Marketplace.