Apple pricing is unlike almost every other brand in consumer tech : consistent across each and every retail merchant , and seldom discounted . How do Cook and Co manage to pull that off ?
MacWorld has an interesting articleabout the techniques which Apple use to keep its prices fixed . From the article :
Most merchandise move from manufacturers to retail merchant through a net of distributors . Even though each product has a “ producer suggest retail cost ” ( MSRP ) , each retailer is innocent to set its own cut-rate sale monetary value …
[ P]rice variability is potential because of the with child departure ( usually from 30 to 55 percent ) between the wholesale cost - what the retail merchant pays the distributor for each unit of the product - and the MSRP for each unit . That gap leaves enough way for each retail merchant to set its own policies and generate a sometimes significant range of market Price for a product .
Apple , however , extends only a tiny sweeping price reduction on its Macs and iPads to your retailer of selection . The real numbers are a close guarded secret , protect by confidentiality agreements between Cupertino and its resellers , but the dispute probably amounts to only a few per centum points off the prescribed Mary Leontyne Price that you find at Apple ’s own stock . With such a narrow interruption to monkey with , most retailers ca n’t offer big discounts and still hope to turn a profit .
It does n’t stop there , though . Apple will supplement its minuscular sweeping discount with monetary incentives — but if , and only if , the retailer in doubt advertize its Apple products at or above a minimal advertised price . In turn , the retail merchant can make more money , but only if it does what Apple enjoin . While it may go like a technique bind to put retailers off stocking Apple , clear it doesn’t — there ’s a cachet which comes from carrying the brand — but even if it did , it probably would n’t harm sales agreement dramatically , only serving to make the brand name seem more undivided .
It should be clear that it all benefit Apple massively : it keeps prices high so Apple never has to compete and prevents vainglorious retailers assuming a strong enough market positions to bully the folks at Cupertino . While all this sound faintly doubtful , the techniques used by Apple are completely legal , and used — separately — by many producer across the industry . It just happen that Apple has distill them down to a grampus model which gives them ultimate dominance over retail merchant . If you find all this interesting , you shouldcheck out the MacWorld article , which also dives into the murky cosmos of iPhone pricing . [ MacWorld ]
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