If ever proof were needed of Amazon’s power it surely must come in the shape of Apple finally agreeing to let the marketplace sell its products across the US, Europe, Japan and India in time for the peak season.
For years, Apple has not allowed Amazon to sell its goods other than refurb-ed items, beats headphones and some mac laptops. Now it has buried the hatched with Amazon and will be allowing it to sell the latest iPhones, iPads, macs and many other Apple brand products – although the HomePod is not going to be among them, it being the high end competitor to Amazon’s own voice control products.
The move by Cupertino comes as it sees sales of its new products stutter – not least its latest ‘low cost’ iPhone, the XR, which isn’t flying off Apple’s own shelves.
It also comes as Amazon culminates a drive over the past year to clean up counterfeit products on its site and improve other fraud protection. The move will, however, see Amazon cull a number of third-party Apple-compatible products pending Apple approval.
The shift comes as more and more brands give in to selling on Amazon. Nike had been famously resistant to using the site, fearful of brand damage and so on, but relented earlier this year. Many others have seen the sense of it over the past 24 months, shifting position from brand protection to recognising where the sales actually are.
Apple, like others, have realised it is better to be in the tent protecting their brand – and garnering extra sales – than outside, taking a stance, and not selling as much.
“We’re working with Amazon to improve the experience for Apple customers on their site and we look forward to those customers having another great way to buy iPhone, iPad, Apple Watch, Mac and more”
– Apple statement
However, there is a massive challenge for Amazon here too. It has to maintain the efficacy of what it sells and, with many tens of thousands of merchants, it has to be really carefully about third party goods.
Banning third-party Apple compatible items that are yet to be Apple-approved is an obvious move, but not one that is in the consumer’s interest. Under the new deal it simply means that shoppers can by a 3.5mm headphone jack-to- Lightning adaptor, they will just have to pay the Apple £30 for it rather than £2 and taking their chances.
This clearly works well for Apple – and Amazon, short term – but is a bit of a pain for all the rest of us Apple users who aren’t purists.
That said, the seeing Apple embrace Amazon like this is a vindication of the shift to marketplace selling as one of the main channels to market for any brand, big or small. Interestingly, about 71% of Apple’s sales in fiscal 2018, ended in September, were through indirect distribution channels like Amazon.
Clearly, the boffins at Cupertino have done some maths and seen that they will simply sell more to more people if they go where the people are. And that is a lesson that all retailers and brands need to take heed of.