Costco enters 'mutual agreement' to stop selling Apple products

Posted:
in General Discussion edited January 2014
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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Comments

  • Reply 1 of 47
    jason98jason98 Posts: 765member
    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.
  • Reply 2 of 47
    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.
  • Reply 3 of 47
    Quite disappointed with this one.
  • Reply 4 of 47
    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.
  • Reply 5 of 47
    cpsrocpsro Posts: 2,516member
    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.
  • Reply 6 of 47
    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.
  • Reply 7 of 47
    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.
  • Reply 8 of 47
    ktappektappe Posts: 771member
    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.
  • Reply 9 of 47
    drdoppiodrdoppio Posts: 1,132member
    While the article states that the decision was mutual, the facts presented suggest that only Costco had reasons to be unhappy with the partnership.
  • Reply 10 of 47
    My local Apple Reseller doesn't have the iPad neither, Apple won't let them have them.



    Needless to say they have been quite hostile over the last year, don't carry anything in stock anymore, everything is "ordered". They don't have the latest models.



    I think they plan to quit.
  • Reply 11 of 47
    al_bundyal_bundy Posts: 1,525member
    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.
  • Reply 12 of 47
    jasenj1jasenj1 Posts: 916member
    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.
  • Reply 13 of 47
    bageljoeybageljoey Posts: 1,763member
    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.



    Same here...
  • Reply 14 of 47
    chronsterchronster Posts: 1,894member
    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.
  • Reply 15 of 47
    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.
  • Reply 16 of 47
    rbonnerrbonner Posts: 635member
    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.
  • Reply 17 of 47
    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.





    Reply -*- REPLY-*- Reply -*- REPLY -*- Reply



    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.
  • Reply 18 of 47
    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.
  • Reply 19 of 47
    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.
  • Reply 20 of 47
    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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