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Costco enters 'mutual agreement' to stop selling Apple products

post #1 of 47
12/9/10 at 12:02pm
Thread Starter 
Discount wholesaler Costco will no longer sell any of Apple's products, as the two companies have reportedly come to a "mutual agreement" to cease their partnership.

According to The Seattle Times, Costco will phase out Apple products from its inventory. Richard Galanti, chief financial officer for Costco, reportedly said that Apple never allowed the retailer to sell its products online, while other stores have had that privilege.

"In the past couple months, we agreed to wind down," he said.

In October, it was rumored that Costco was looking to stop selling Apple's iPod because Apple has not allowed it to sell the iPad. Costco was left out earlier this year when rival Sam's Club announced it would carry both the iPad and the iPhone.

While Apple apparently passed over Costco, a number of other retail partners are offering the iPad this holiday, as Apple looks to maximize the retail presence of its touchscreen tablet. Among those selling the iPad are Target, Best Buy, Walmart, and carriers AT&T and Verizon.

In addition to iPods, Costco also sold iTunes gift cards, which could be used to buy content and applications from the iTunes Store. However, the iPods and gift cards were never sold with large discounts from the wholesaler.
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post #2 of 47
12/9/10 at 12:15pm
I think this is a huge mistake by Apple and a very short-sited decision. Costco is one of the few retails positively perceived by shoppers.
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post #3 of 47
12/9/10 at 12:17pm
The gift cards were discounted which was really nice. It was a 3 pack of 20$ cards. Once for some reason they had them for $47 which is unbeatable. Regularly they still sell them cheaper than the value of the cards by at least a few dollars. I wonder if this is the reason why it's ending, that Costco was selling giftcards for less than their iTunes value.
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post #4 of 47
12/9/10 at 12:29pm
Quite disappointed with this one.
The true measure of a man is how he treats someone that can do him absolutely no good.
  Samuel Johnson
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The true measure of a man is how he treats someone that can do him absolutely no good.
  Samuel Johnson
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post #5 of 47
12/9/10 at 12:33pm
Quote:
Originally Posted by jason98 View Post

I think this is a huge mistake by Apple and a very short-sited decision. Costco is one of the few retails positively perceived by shoppers.

I would not call it a huge mistake, as Apple can sell everything they make.

I do have to admit it seems like a bad decision though, I spend more at Costco then anywhere else, and i find that Costco treats its customers and employees far better then Wallmart/Samsclub.

I guess Apple does not have much ground to stand on when they say the record companies treat them worse then lets say Amazon or other online music resellers.
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post #6 of 47
12/9/10 at 12:42pm
It's so bizarre and sad that an explanation is in order.
I wonder if it has to do with Apple not wanting to cede to Costco's generous return policy.
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post #7 of 47
12/9/10 at 12:43pm
My uneducated guess is that neither company was making the kind of profits necesarry to make it a worthwhile partnership. Sure, Costco probably felt they were being slighted, but Apple does things to make money, and if they thought putting iPads in Costco would make them significantly more dollars, it's hard to imagine they wouldn't have done it. That's not as intriguing of a headline, sure, but it's probably closer to the truth.
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post #8 of 47
12/9/10 at 12:47pm
Quote:
Originally Posted by BeltsBear View Post

have much ground to stand on when they say the record companies treat them worse then lets say Amazon or other online music resellers.

I would disagree only because you are comparing apples to oranges. Apple's fight with the record companies was legitimate. The record labels were blatantly giving Amazon and other digital music stores significantly better deals, and basically laughing and saying "F You" to Apple. There is no sign that Apple's offer to Costco was any more or less unfair to what they proposed to Wal-Mart or anybody else.

Now if it comes out that Apple was trying to play hardball with them and not with Wal-Mart/Sam's Club, that would be a different story, but there is nothing to say that's what happened.
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post #9 of 47
12/9/10 at 12:49pm
Quote:
Originally Posted by jason98 View Post

I think this is a huge mistake by Apple and a very short-SIGHTED decision. Costco is one of the few retails positively perceived by shoppers.

Strongly agree. I refuse on moral grounds to patronize Walmart and Sam's Club, and have had bad experiences at Best Buy. Target recently made political contributions I disagree with so I'm cutting back my shopping there. Costco is one of the few retailers I have no aversion to patronizing and now Apple cuts them out. I can't say this does anything but disappoint me.
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post #10 of 47
12/9/10 at 12:53pm
While the article states that the decision was mutual, the facts presented suggest that only Costco had reasons to be unhappy with the partnership.
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post #11 of 47
12/9/10 at 12:59pm
i doubt it's going to hurt costco. most of the money on ipads and other gadgets is made on the accessories by the retailers. that's why everyone is always pushing bundles.
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post #12 of 47
12/9/10 at 1:00pm
Quote:
Originally Posted by hittrj01 View Post

My uneducated guess is that neither company was making the kind of profits necesarry to make it a worthwhile partnership. Sure, Costco probably felt they were being slighted, but Apple does things to make money, and if they thought putting iPads in Costco would make them significantly more dollars, it's hard to imagine they wouldn't have done it. That's not as intriguing of a headline, sure, but it's probably closer to the truth.

My uneducated guess is that Costco was selling them cheaper than you could buy anywhere else and that made Apple's other retail partners (and maybe Apple) unhappy. It's very hard to find a flat-out lower than sticker price on iPods. Stores throw in gift cards, but the actual price is held very strictly. Costco doesn't play that game. They sell for a cheaper price, no gimmicks. Given the choice of $10 off the price or retail with a $20 gift card, I'll take the $10 off.

I actually bought the last iPod touch at my local Costco. A few days later Target had a 10% off coupon with a gift card so I returned the unopened item to Costco. The people handling the return mentioned they were stopping selling them.

- Jasen.
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post #13 of 47
12/9/10 at 1:06pm
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Originally Posted by ktappe View Post

Strongly agree. I refuse on moral grounds to patronize Walmart and Sam's Club, and have had bad experiences at Best Buy. Target recently made political contributions I disagree with so I'm cutting back my shopping there. Costco is one of the few retailers I have no aversion to patronizing and now Apple cuts them out. I can't say this does anything but disappoint me.

Same here...
Progress is a comfortable disease
--e.e.c.
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Progress is a comfortable disease
--e.e.c.
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post #14 of 47
12/9/10 at 1:29pm
Maybe as part of a deal with Sam's Club, they told Apple not to let Costco sell the iPad.

Oh well, it just means for some people with some Christmas gift lists, they'll need to make one more stop.
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post #15 of 47
12/9/10 at 1:36pm
Quote:
Originally Posted by Bageljoey View Post

Same here...

Not same here. You would have to compare the sales numbers to see if your perceptions match reality. My guess is they don't. Apple wouldn't pull out of Costco if they made money there.
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post #16 of 47
12/9/10 at 1:41pm
Quote:
Originally Posted by jason98 View Post

I think this is a huge mistake by Apple and a very short-sited decision. Costco is one of the few retails positively perceived by shoppers.

My thought as well.
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post #17 of 47
12/9/10 at 1:41pm
Quote:
Originally Posted by jason98 View Post

I think this is a huge mistake by Apple and a very short-sited decision. Costco is one of the few retails positively perceived by shoppers.


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Costco is also here in Canada. There are ways that this move pleases me because Costco Canada or at our least our local warehouse in East Ontario does not have the type of staff who have the training or the mental agility to sell anything save what can be taken off the shelf and handed to a customer. The buyer is not being well served by this type of super market clerk type selling.

I have actually stood along side a person being spoken to by a Costco employee about an Apple computer. Quote " I do not know much about them machines, I guess they work fine. " Close quote.

I do not know about you but that gives me a feeling of security and adequate post sale follow up and support. In a Pig's eye !!

PS I sure hope a person from Costco reads this also.
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post #18 of 47
12/9/10 at 1:47pm
Quote:
Originally Posted by Cpsro View Post

It's so bizarre and sad that an explanation is in order.
I wonder if it has to do with Apple not wanting to cede to Costco's generous return policy.

Probably more likely that Sam's Club or Walmart put some conditions on their agreement that pushed Apple to make Costco a "less than favored" deal.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #19 of 47
12/9/10 at 1:49pm
Quote:
Originally Posted by chronster View Post

Maybe as part of a deal with Sam's Club, they told Apple not to let Costco sell the iPad.

Oh well, it just means for some people with some Christmas gift lists, they'll need to make one more stop.

Looks like we came to the same assumption. I know how they think in their organization.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #20 of 47
12/9/10 at 1:59pm
Quote:
Originally Posted by ktappe View Post

Strongly agree. I refuse on moral grounds to patronize Walmart and Sam's Club, and have had bad experiences at Best Buy. Target recently made political contributions I disagree with so I'm cutting back my shopping there. Costco is one of the few retailers I have no aversion to patronizing and now Apple cuts them out. I can't say this does anything but disappoint me.

Wait, I actually had to double-take when I read your post. You actually don't shop at places because of some political contributions? I know Jobs and probably 90% of employees at Apple swing way to the left politically (I don't btw), but I still buy the shit out of Apple products and own stock with the company. Why? Because their products are excellent and the company is run well, period. I don't care if SJ shows up at a gay-day parade wearing a dress, I'm still going to enjoy my iPhone and keep buying stock. What the heck does it matter that a company give to certain political parties (btw Target donated to BOTH parties).

Come on, man, really?

But to get back to the topic, less exposure for Apple products is less exposure, therefore making this decision to cut ties with Costco, a bad one IMHO.
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post #21 of 47
12/9/10 at 2:19pm
Oh no! I spend 4x more at Costco than any other store (including the local grocery stores).

In fact if I actually totaled receipts instead of a just quick scan of my Amex totals, it may really be
"spend more than 4x the next TWO combined stores!"

Not a good move by Apple.
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post #22 of 47
12/9/10 at 2:22pm
Quote:
Originally Posted by Pennywse View Post

Wait, I actually had to double-take when I read your post. You actually don't shop at places because of some political contributions? I know Jobs and probably 90% of employees at Apple swing way to the left politically (I don't btw), but I still buy the shit out of Apple products and own stock with the company. Why? Because their products are excellent and the company is run well, period. I don't care if SJ shows up at a gay-day parade wearing a dress, I'm still going to enjoy my iPhone and keep buying stock. What the heck does it matter that a company give to certain political parties (btw Target donated to BOTH parties).

Come on, man, really?

But to get back to the topic, less exposure for Apple products is less exposure, therefore making this decision to cut ties with Costco, a bad one IMHO.

Well considering Target was founded by the Dayton Department store company, and the Dayton family is some of the absolute most liberal politicians in the country - from Minnesota. Its not hard to imagine Target leaning very left.
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post #23 of 47
12/9/10 at 2:39pm
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Originally Posted by SailorPaul View Post

Oh no! I spend 4x more at Costco than any other store (including the local grocery stores).

In fact if I actually totaled receipts instead of a just quick scan of my Amex totals, it may really be
"spend more than 4x the next TWO combined stores!"

Not a good move by Apple.

Because your spending habits rule? I gave up my Costco card, since I hardly ever used it.
Please don't be insane.
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Please don't be insane.
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post #24 of 47
12/9/10 at 3:55pm
Quote:
Originally Posted by Psych_guy View Post

Not same here. You would have to compare the sales numbers to see if your perceptions match reality. My guess is they don't. Apple wouldn't pull out of Costco if they made money there.

Costco does behave a little differently then other stores. They had a fight with coke because coke gave someone else better terms and costco found out. They stopped selling coke until coke gave them the same terms. Most certainly this is the same kind of thing and Apple will not relent.

Just guessing... Walmart got the better terms.
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post #25 of 47
12/9/10 at 3:56pm
Quote:
Originally Posted by htoelle View Post

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Costco is also here in Canada. There are ways that this move pleases me because Costco Canada or at our least our local warehouse in East Ontario does not have the type of staff who have the training or the mental agility to sell anything save what can be taken off the shelf and handed to a customer. The buyer is not being well served by this type of super market clerk type selling.

I have actually stood along side a person being spoken to by a Costco employee about an Apple computer. Quote " I do not know much about them machines, I guess they work fine. " Close quote.

I do not know about you but that gives me a feeling of security and adequate post sale follow up and support. In a Pig's eye !!

PS I sure hope a person from Costco reads this also.

Costco probably has 30,000 different items, Target probably 100,000 different items. A store employee can't be an expert on them all. Tell me what kind of job you have and I will give you a perfect analogy.
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post #26 of 47
12/9/10 at 3:57pm
Quote:
Originally Posted by Pennywse View Post

Wait, I actually had to double-take when I read your post. You actually don't shop at places because of some political contributions? I know Jobs and probably 90% of employees at Apple swing way to the left politically (I don't btw), but I still buy the shit out of Apple products and own stock with the company. Why? Because their products are excellent and the company is run well, period. I don't care if SJ shows up at a gay-day parade wearing a dress, I'm still going to enjoy my iPhone and keep buying stock. What the heck does it matter that a company give to certain political parties (btw Target donated to BOTH parties).

Come on, man, really?

But to get back to the topic, less exposure for Apple products is less exposure, therefore making this decision to cut ties with Costco, a bad one IMHO.

Thats because you have no values and you spend your money blindly. The only way to change something, is voting, and not in a voting booth, but with your wallet.
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post #27 of 47
12/9/10 at 4:53pm
Quote:
Originally Posted by jason98 View Post

I think this is a huge mistake by Apple and a very short-sited decision. Costco is one of the few retails positively perceived by shoppers.

Costco staff are incompetent at selling computer systems, in general, let alone Apple products. The stuff Costco stocks is becoming more and more generic.
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post #28 of 47
12/9/10 at 4:59pm
Total World Wide stores:

Costco: 563

Best Buy: > 1150

Apple Store: 323+

Target: > 1743

Radio Shack: > 4,653 stores, > 688 kiosks, > 1408 deal outlets

There are many other outlets for Apple than what I've listed.

Costco didn't house much Apple products and with these other outlets it's not hard to see that Apple doesn't need them.
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post #29 of 47
12/9/10 at 5:02pm
Quote:
Originally Posted by BeltsBear View Post

Just guessing... Walmart got the better terms.

I guess that most of Apple customers do not shop at Walmart.
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post #30 of 47
12/9/10 at 5:33pm
Costco is tiny taters and has no business making any demands of apple. Besides, I don't shop at any store that is a "club." What? I'm supposed to feel special, pay them a membership and then buy stuff in quantities that practiically force me over-consume? No thanks. I don't get why people are addicted to any retailer. You can buy most stuff anywhere and the savings are usually not what they're cracked up to be. Every time I price-compare walmart with amazon walmart comes out on the short end.
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post #31 of 47
12/9/10 at 6:08pm
Quote:
Originally Posted by jason98 View Post

I think this is a huge mistake by Apple and a very short-sited decision. Costco is one of the few retails positively perceived by shoppers.

I completely disagree, Costco treats their shoppers like cattle.
I quit going there after being yelled at by one of there customer herders for going through the wrong door. I threw my Costco card at the manager and never went back.

Costco can stuff it, they sell cheaply made crap that does not belong on the same shelf as Apple products.
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post #32 of 47
12/9/10 at 6:53pm
This is just grandstanding so that they can get the iPad. Costco sells the crap out of iPods here in AZ.

Although with this economy, Costco is less competitive, due to other retailers lowering their prices. You used to be able to get a lot of stuff there you can't anywhere else, but not so much anymore.

If they dump each other, it will be only for a couple of years.
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post #33 of 47
12/9/10 at 8:13pm
Quote:
Originally Posted by Pennywse View Post

I don't care if SJ shows up at a gay-day parade wearing a dress, I'm still going to enjoy my iPhone and keep buying stock.

What if he was a child molester? People can tolerate different things to varying degrees. Not necessarily disagreeing with you, but everyone has their own set of moral standards that can't be crossed. If the OP wants to make his opposition known by boycotting he's not wrong or stupid for doing it; that's completely subjective.

On the other hand when one is against opposition in itself, that's a bit more dangerous. For example it's illegal in the US to organize any boycotts against Israel . . .
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post #34 of 47
12/9/10 at 9:36pm
Quote:
Originally Posted by bedouin View Post

What if he was a child molester? People can tolerate different things to varying degrees. Not necessarily disagreeing with you, but everyone has their own set of moral standards that can't be crossed. If the OP wants to make his opposition known by boycotting he's not wrong or stupid for doing it; that's completely subjective.

On the other hand when one is against opposition in itself, that's a bit more dangerous. For example it's illegal in the US to organize any boycotts against Israel . . .

Can you give some proof for that last statement?
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post #35 of 47
12/9/10 at 10:43pm
Quote:
Originally Posted by mdriftmeyer View Post

Costco staff are incompetent at selling computer systems, in general, let alone Apple products. The stuff Costco stocks is becoming more and more generic.

I think this story is being blown out of proportion. I bought my iPod touch at Costco and there was a decent discount. But I believe they were only selling iPods. No computers, iPads, or even iPhones? Not sure about that last item. Anyhow we are basically talking about portable media players. How much technical expertise would really be used?

When the battery started to underperform I went across town and into the foothills to the very inconveniently located Apple Store to solve the problem. All Apple did there was swap it out (for a reconditioned iPod) and I restored from my backup. That much might have been done at Costco. But the point is they were just a kiosk for iPods. They were probably a victim of Apple's new iPod kiosk, Wal-Mart. It fits their profile
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post #36 of 47
12/9/10 at 11:28pm
Apple's "Made in China" merchandise was a perfect fit for nearly all of Costco's merchandise that is also, "Made in China."
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post #37 of 47
12/9/10 at 11:34pm
Too bad... our family likes shopping at Costco (plus other retailers) and their return policy / warranty is pretty good on electronics...

Now I hope Costco drops the price even more to blow out the inventory quickly. I want a new 4G iPod Touch (32GB).
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post #38 of 47
12/9/10 at 11:39pm
Quote:
Originally Posted by Cpsro View Post

It's so bizarre and sad that an explanation is in order.
I wonder if it has to do with Apple not wanting to cede to Costco's generous return policy.

No, it's because Apple doesn't want to sell iPads in packs of 8.
"And just like that, everyone here realizes you're just another sweaty little Google licker with an axe to grind and no idea what he's talking about." --addabox
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"And just like that, everyone here realizes you're just another sweaty little Google licker with an axe to grind and no idea what he's talking about." --addabox
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post #39 of 47
12/9/10 at 11:46pm
Costco members spend a lot of money at Costco. This is generally because their return policy is so good and because they have great deals most of the time. Anyone I talk to tells me they cannot get out of Costco under $100-200. Why would Apple not want that kind of customer looking at their products? I am disappointed. Read somewhere that Apple sells billions through Costco, not sure about the number though. Bought an ipod and a Mac Mini there myself. The mini came bundled with Bluetooth Keyboard, Bluetooth Mouse and Apple Care for about the same as a mini all by itself on the Apple Store. Sad to see that those kind of deals will not be returning...
NoahJ
"It is unwise to be too sure of one's own wisdom. It is healthy to be reminded that the strongest might weaken and the wisest might err." - Mahatma Gandhi
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NoahJ
"It is unwise to be too sure of one's own wisdom. It is healthy to be reminded that the strongest might weaken and the wisest might err." - Mahatma Gandhi
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post #40 of 47
12/10/10 at 12:07am
Does anyone really think this will matter?

Apple has its own stores and the iPad is already such a coveted and well-known product, it doesn't really need to be in these stores anyway, does it?

A product like this with such a huge tailwind pushing it forward doesn't really have to play with the big-box boys. Apple's definitely got the advantage here, and there's a certain cachet that it loses even being at Walmart or Costco. For months, they literally couldn't MAKE ENOUGH to keep up with demand.
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