Amazon implements agreement with Apple that shuts down unauthorized resellers in favor of new units sold through the online marketplace
Unauthorized resellers of refurbished Apple products are no longer allowed to market their goods on Amazon. The online marketplace locked out recycled-device resellers to get new iPads and iPhones through Apple direct and authorized partners.
The Lowdown: Amazon and Apple cut a deal in November 2018 to get new Apple products through direct and authorized indirect partners on the online marketplace. In exchange, Amazon cut off access to scores of unauthorized resellers who sold refurbished iPhones, iPads, and Macs through Amazon marketplace and fulfillment services.
The Details: The affected Apple refurbished device dealers received notice of the new policy nearly two months ago. “Amazon is constantly working to enhance the customer experience, and one of the ways we do this is by increasing selection of the products we know customers want,” Amazon wrote to affected resellers. “As part of a new agreement with Apple, we are working with a select group of authorized resellers to offer an expanded selection of Apple and Beats products, including new releases, in Amazon’s stores.”
The Impact: The exact number of affected Apple refurbished-device resellers is unknown. By some estimates, hundreds of companies — largely smaller, regional resellers — are being delisted. The ban went into effect Friday, Jan. 4.
Background: Amazon has supported the secondary market that sells refurbished equipment for years. While license agreements prevent unauthorized sales of new products, the “first sale doctrine” allows those who have legally purchased a product to resell it independently of the manufacturer. Refurbished dealers operate under the “first sale doctrine.” While nothing prevents these resellers from marketing recycled Apple products, the Amazon-Apple deal essentially cuts off one of their most valuable routes to market.
The Buzz: “The first sale doctrine has never required an owner to get permission to sell their property. But Amazon is leveraging its power over its marketplace to give Apple power that the courts and Congress never have and never would,” Aaron Perzanowski, a law professor at Case Western Reserve University, told Motherboard.
“Apple and Amazon will certainly drown out these concerns with the same old tired marketing spin and fear rhetoric, telling us it’s about customer experience and safety, but what it comes down to is that small businesses will die and perfectly usable electronics will go to waste,” John Bumstead, owner of affected refurbisher dealer RDKL, in an interview with PC Magazine.
Channelnomics Point of View: All hardware vendors contend with the issue of open and closed distribution channels. The “first sale doctrine” prevents vendors from completely closing off the secondary resale market, but companies such as Apple do have the right to erect controls to protect their interest. And while some unauthorized resellers will suffer market access setbacks, the Amazon-Apple deal may open new route-to-market opportunities for authorized Apple partners.