Apple sued over third-party reseller inventory practices


Apple has an immensely successful self-run retail arm, but it wasn’t always that way. Once, it depended heavily on the kindness of strangers, and those same strangers (third-party resellers) are now bristling at what they see as unfair business practices. The latest example is a new suit by eBizcuss, Apple’s largest reseller in France, which accuses its partner of favoring its own stores with inventory shipments and undercutting its ability to compete for small business customers.

According to its CEO François Prudent, who spoke to French newspaper Le Figaro (via AppleInsider), eBizcuss saw a 30 percent decline in business during the third quarter of 2011 due to stock shortages of iPad 2 and MacBook Air computers. That wasn’t due only to their popularity, Prudent claims. Apple’s tendency to prefer its own retail outlets when shipping new stock contributed significantly to its inability to meet customer demand. Likewise, the iPhone 4S has been in short supply in the fourth quarter, Prudent says.

EBizcuss has spent around $6.5 million getting its point-of-sale system up to scratch with Apple’s very specific criteria. Also, Apple also has taken away eBizcuss’ business customers by offering them prices that the third-party reseller can’t possibly match, since they undercut what it pays Apple itself for the hardware.

Apple’s practices have been the subject of legal action before. MACadam, an Apple reseller that shuttered its business in 2005, joined together with other third-party Apple partners to file a class-action lawsuit alleging unfair business practices, among other alleged wrongdoings. According to both that suit and this new one, Apple has preferred its own retail operations for available inventory since they began opening around the world.

Almost every time Apple unveils a new product these days, especially in the mobile space, early demand leads to supply shortages. According to Apple executives, these shortages result from Apple’s not being able to make product fast enough to keep up with consumer appetite; but these accusations suggest that when new stock does come in, it goes to Apple’s stores and online customers first. That would indeed harm the business of outside resellers, since customers will go with the retailer most likely to be able to meet their needs in a pinch.

Back in February, Dave Greenbaum talked about how Apple’s approach to dealing with its third-party reseller and service partners is beginning to look like outright hostility. This latest suit suggests that the problem isn’t improving as Apple’s own retail reach expands and its website continues to be a hit with consumers. After all, if Apple can sell direct, it will: It recoups more money and builds a stronger direct relationship with customers than through third-party sales. But is it worth costing the Apple user community the benefits of the local independent Mac shop forever?

You're subscribed! If you like, you can update your settings


Comments have been disabled for this post