4 ms·

I don't believe Costco publishes their vendor agreements so you really have no idea how Costco treats their suppliers. Also, no one complains that Google takes

by fleitz 16y ago

I don't believe Costco publishes their vendor agreements so you really have no idea how Costco treats their suppliers. Also, no one complains that Google takes 32% of AdWords.

jrockway 16y ago
They don't take 32% of the purchase price for purchases that were made by someone who clicked on an AdWords link, though.
- fleitz 16y ago
  If you're monetizing your content via adsense then they're taking 32% of your profit. It's been repeated over and over again that this is about content publishers. eg. Selling magazine subscriptions. Apple provides access to a large number are: A) affluent, B) have credit cards in the system C) are conditioned to buy via that medium, to me it's worth 30% to get access to that market. It's like rent on a busy street, if you're selling trinkets with a minimal markup it's probably not worth it. If you're selling high end with lots of markup it's probably worth it. iOS isn't for everyone, it's a luxury brand, not every model is going to work on that platform. Want a marketplace where no one buys anything, there are confusing payment options, and your product is next to 10 task killer apps, well then there's a Marketplace for that.
  - jonknee 16y ago
    They're doing work there though--selling the ads. Apple is taking 30% of your sales when you're doing the work (other than the actual payment processing).
  - jrockway 16y ago
    If you're monetizing your content via adsense then they're taking 32% of your profit. Right, and that's absolutely expected. Apple should feel free to take 30% of anything purchased in-app. What they shouldn't do is force vendors to charge everyone else 30% more for the same product. It would be like Google saying, "if you want to show an ad on your blog, you have to give us 30% of the money you make at your garage sale". It simply makes no sense. Want a marketplace where no one buys anything, there are confusing payment options, and your product is next to 10 task killer apps, well then there's a Marketplace for that. I want one where I can pay $10 for a book on my Kindle and read it on my phone when I don't have the Kindle with me. Paying Apple an extra $3 so that I can read my books on my phone doesn't make much sense to me. But that's why I don't own an iPhone. My phone is a chunk of circuit boards that fits in my pocket, not my life.
natnat 16y ago
Google takes all of AdWords, since it's on their own site. They take a 32% cut of AdSense. The thing is, advertisers could use other channels to put ads up on the web. They can advertise with Chitika or whatever and get a bigger cut than they would with Google. They typically don't, because AdSense adds a lot of value by targeting the ads well. On the other hand, if you want to sell software on an iOS device, the only way is through the app store. Apple doesn't need to add any value to protect their 30% cut from competition because they don't allow competitors.
- ReadyNSet 16y ago
  and google never published that percentage until iAd came around.
- ecuzzillo 16y ago
  I think the last argument is misframed. If you want to sell software on a tablet device, you can do it through Android, iOS, or probably a couple other ways. Apple's claim, presumably, is that the quality of iOS, the App Store, and of the hardware that runs iOS, adds at least that much value over Android. And, given how much more money people make on iOS apps compared to Android apps, they're probably right. The argument about subscription issues is related but more complicated.
zach 16y ago
Well, we do know about Costco dropping Coca-Cola and Apple because Costco wasn't satisfied with the terms they were getting. They came to an agreement with Coke but Apple products are still gone. If you're a retailer willing to drop Coca-Cola, we can pretty much assume you're a strong-willed company. Whether that leads to triumphs of principle over practicality or displays of pettiness is, I'd say, a matter of perspective.
calloc 16y ago
But Costco does publicise how much markup they put on their products as a maximum: _Costco's maximum markup on merchandise is 14 percent, and "a lot of products don't come close to 14 percent," Sinegal said. By comparison, supermarkets commonly mark up merchandise by 25 percent and department stores by about 50 percent._ http://www.gazette.com/articles/costco-33279-springs-store.html http://www.gazette.com/articles/costco-33279-springs-store.h... Costco is extremely cut-throat, there have been several articles about Costco and how if they aren't receiving the lowest price for a product they just won't have it on the shelves, the Coke dispute was pretty big [1]. Overall I find that Costco is pretty transparent when it comes to the products they offer, and how much they charge for them. So far Costco has been a great value for me as a consumer! [1]: http://www.wbur.org/npr/120590548/price-fight-coke-isnt-it-at-costco http://www.wbur.org/npr/120590548/price-fight-coke-isnt-it-a...

by fleitz 16y ago

I don't believe Costco publishes their vendor agreements so you really have no idea how Costco treats their suppliers. Also, no one complains that Google takes 32% of AdWords.

jrockway 16y ago

They don't take 32% of the purchase price for purchases that were made by someone who clicked on an AdWords link, though.

fleitz 16y ago
If you're monetizing your content via adsense then they're taking 32% of your profit. It's been repeated over and over again that this is about content publishers. eg. Selling magazine subscriptions. Apple provides access to a large number are: A) affluent, B) have credit cards in the system C) are conditioned to buy via that medium, to me it's worth 30% to get access to that market. It's like rent on a busy street, if you're selling trinkets with a minimal markup it's probably not worth it. If you're selling high end with lots of markup it's probably worth it. iOS isn't for everyone, it's a luxury brand, not every model is going to work on that platform. Want a marketplace where no one buys anything, there are confusing payment options, and your product is next to 10 task killer apps, well then there's a Marketplace for that.
- jonknee 16y ago
  They're doing work there though--selling the ads. Apple is taking 30% of your sales when you're doing the work (other than the actual payment processing).
- jrockway 16y ago
  If you're monetizing your content via adsense then they're taking 32% of your profit. Right, and that's absolutely expected. Apple should feel free to take 30% of anything purchased in-app. What they shouldn't do is force vendors to charge everyone else 30% more for the same product. It would be like Google saying, "if you want to show an ad on your blog, you have to give us 30% of the money you make at your garage sale". It simply makes no sense. Want a marketplace where no one buys anything, there are confusing payment options, and your product is next to 10 task killer apps, well then there's a Marketplace for that. I want one where I can pay $10 for a book on my Kindle and read it on my phone when I don't have the Kindle with me. Paying Apple an extra $3 so that I can read my books on my phone doesn't make much sense to me. But that's why I don't own an iPhone. My phone is a chunk of circuit boards that fits in my pocket, not my life.

natnat 16y ago

Google takes all of AdWords, since it's on their own site. They take a 32% cut of AdSense. The thing is, advertisers could use other channels to put ads up on the web. They can advertise with Chitika or whatever and get a bigger cut than they would with Google. They typically don't, because AdSense adds a lot of value by targeting the ads well. On the other hand, if you want to sell software on an iOS device, the only way is through the app store. Apple doesn't need to add any value to protect their 30% cut from competition because they don't allow competitors.

ReadyNSet 16y ago
and google never published that percentage until iAd came around.
ecuzzillo 16y ago
I think the last argument is misframed. If you want to sell software on a tablet device, you can do it through Android, iOS, or probably a couple other ways. Apple's claim, presumably, is that the quality of iOS, the App Store, and of the hardware that runs iOS, adds at least that much value over Android. And, given how much more money people make on iOS apps compared to Android apps, they're probably right. The argument about subscription issues is related but more complicated.

zach 16y ago

Well, we do know about Costco dropping Coca-Cola and Apple because Costco wasn't satisfied with the terms they were getting. They came to an agreement with Coke but Apple products are still gone. If you're a retailer willing to drop Coca-Cola, we can pretty much assume you're a strong-willed company. Whether that leads to triumphs of principle over practicality or displays of pettiness is, I'd say, a matter of perspective.

calloc 16y ago

But Costco does publicise how much markup they put on their products as a maximum: _Costco's maximum markup on merchandise is 14 percent, and "a lot of products don't come close to 14 percent," Sinegal said. By comparison, supermarkets commonly mark up merchandise by 25 percent and department stores by about 50 percent._ http://www.gazette.com/articles/costco-33279-springs-store.html http://www.gazette.com/articles/costco-33279-springs-store.h... Costco is extremely cut-throat, there have been several articles about Costco and how if they aren't receiving the lowest price for a product they just won't have it on the shelves, the Coke dispute was pretty big [1]. Overall I find that Costco is pretty transparent when it comes to the products they offer, and how much they charge for them. So far Costco has been a great value for me as a consumer! [1]: http://www.wbur.org/npr/120590548/price-fight-coke-isnt-it-at-costco http://www.wbur.org/npr/120590548/price-fight-coke-isnt-it-a...