Apple's Supply Chain and Chinese Customs Taxes Killing iPad Reselling Market
Picture of an iPad reseller in Hong Kong during the iPad 2 launch. Prices for the 16GB Wi-Fi model reached $1025, while the 64GB 3G reached prices as high as $1525 in resale markets.
Turns out the Apple iDevice resale market is drying up.
The hustle is simple. Resellers buy as many iDevices as they can on launch day in an attempt to capitalize on the high demand and low supply of the products. However, this time around the resellers didnít get help from Apple, as Cupertino met and exceeded consumer demand for the devices.
Reports have surfaced of some resellers returning as many as 30 new iPads at a time to Apple stores. Making matters worse for the resellers and better for everyone else, China is starting to crack down incoming iPad shipments. According to Reuters Chinese custom authorities have added the iPad to a list of taxable items entering China.
An electronics dealer in Oakland, California, said he struggled to break even this year, a far cry from previous iPad releases when he shipped upwards of 1,000 tablets and pocketed profits of $50 to $100 per device sent to his buyer in Hong Kong.
Also, Apple appears to have pulled the incredible feat of launching in simultaneously in 10 countries and meeting demand in every single one. The iPad 2 launch by comparison was rife with delays and supply shortages making for a reseller paradise. High supply in the U.S. and other countries, coupled with new Chinese tax policies have all, but dried up the iDevice black market.