Costco enters 'mutual agreement' to stop selling Apple products
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.
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.
Comments
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.
I wonder if it has to do with Apple not wanting to cede to Costco's generous return policy.
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.
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.
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.
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.
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...
Oh well, it just means for some people with some Christmas gift lists, they'll need to make one more stop.
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.
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.
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.
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.
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.
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?
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.