The demise of the independent Apple reseller

Summary:MacOutfitters, a 22-year Pennsylvania Apple reseller, recently announced that it's closing its doors. Is it impossible to compete with Apple in retail?

The demise of the independent Apple reseller. Elite Computers and Software closed its doors in 2003

Elite Computers & Software, located across the street from Apple headquarters in Cupertino, used to host crazy midnight madness events that were like Hollywood movie premiers. When a new version of Mac OS was released (like Mac OS 9), the company would drive boxed copies to its Cupertino store by limousine so that they would arrive at the stroke of midnight to throngs of Apple customers waiting under search lights. 

Then Apple launched its retail store initiative in May 2001.

Elite closed in 2003.

MACadam, a popular bay area Apple Value Added Reseller (VAR) in business for 16 years, closed in 2003

After 22 years MacOutiftters, based in Doylestown, PA sent the following email to its customers last week:

I am sorry to announce that all MacOutfitters locations are closing permanently.

This has been a very difficult decision for us. The ever-changing market for computer goods and services has always been challenging, however, the last several years have been particularly difficult for our company. We have found that we can no longer be profitable providing the level of service that we have always strived to provide, and that you have come to expect.

It has been our great pleasure to serve you for nearly 22 years. We have been a part of some of the most exciting technology innovations ever seen. We will miss those aspects of the business very much.

Thank you so much for your loyalty over the years, we wish you the very best.

Very truly yours,

Jim Habel, President

and all the MacOutfitters team

There are stories like this in almost every town since Apple launched its first Apple retail store in 2001. Some notable exceptions are Tekserve in New York, Springboard Media in Philadelphia, and Charlotte Street Computers in Asheville, NC who have managed to survive in the shadow of Apple retail stores, sometimes just blocks away.

Three factors make it nearly impossible to compete with Apple retail's dominance:

  1. Declining hardware margins
  2. The impact of e-commerce/m-commerce/Amazon Prime
  3. Apple's meteoric rise into retail

The barrier to entry for an average (or even a well funded) entrepreneur are impossibly high. How could an independent Apple reseller compete with Cupertino's retail juggernaut that gets inventory first, in greater quantity and at cost?

You might be able to make a case for a specialized, consulting business, or maybe one focused on custom training, or even one specializing in high-end workstations aimed at vertical markets (pre-press, color separation, video, animation) but would it be profitable? Would it cover the $5,000 - 10,000 per month it costs to rent a retail storefront and then pay salaries? I doubt it.

Long time Apple Specialist MacOutfitters' (a.k.a. Computer Forum) owner Jim Habel has been involved with Apple products in Doylestown for over 30 years (the first 10 years with Solutions Computer). The organization has incubated several past and current Apple corporate employees and to many, MacOutfitters was an asset to the local Apple community and will be sorely missed.

Is it possible to operate an independent Apple retail store in the wake of total domination by Cupertino? Or is it analogous to opening a competitor to Walmart?

(Disclosure: Tekserve and Springboard have previously advertised on my website, PowerPage.org.)

Topics: Apple

About

Jason D. O'Grady developed an affinity for Apple computers after using the original Lisa, and this affinity turned into a bona-fide obsession when he got the original 128 KB Macintosh in 1984. He started writing one of the first Web sites about Apple (O'Grady's PowerPage) in 1995 and is considered to be one of the fathers of blogging.... Full Bio

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