Apple, Amazon, and the Shrinking Internet Landscape

November 19, 2018

In order to keep moving forward, you have to hang on to the idea that tomorrow might be better than today, and that next year might be better than this year. But that’s increasingly difficult to grasp in the repair world -- the world of fixing broken devices and putting them back into circulation. You’d think, as I did 10 years ago when I started my company, that repairing is an inherently positive activity, and that refurbishing would be considered a noble profession. Hah!

Last week I got an e-mail from Amazon letting me know that I will be prohibited from selling Apple products as of January 4th. I’ve been selling about a third of my MacBook inventory there for a few years. It’s not easy to do -- you have to keep your seller ratings up, and there is always a lingering risk of getting banned for minor offenses. Unlike eBay, which more or less treats sellers like customers, it’s well accepted on Amazon that you work for THEM. You’re lucky to have an account, and you must play by their often cryptic and stringent rules.

I’ve always accepted that, and it turns out I’m pretty good at the game. I have 100% perfect feedback, which is nearly impossible to maintain for any stretch of time. When I’ve been at fault for a bad situation, I’ve literally given away laptops to make customers happy. You will not find one red mark on my Amazon performance scorecard across thousands of transactions. Just like in Monopoly I’ve “passed go” repeatedly and converted all my houses into hotels. I’m 100% in Amazonland.

But that doesn’t matter. Amazon, it turns out, is flipping my Monopoly board and scattering the pieces everywhere. It’s abandoning the game it’s playing with me and thousands of small businesses. Amazon is moving on to a bigger game, a game of partnering with Apple so that it can sell Apple’s products directly in exchange for dumping small companies like mine. As it walks away from us, it has the gall to suggest we should be grateful that we are allowed to keep selling (and making Amazon money) through the holiday season.

Many in the Amazon seller forums ask the question: “Why do you think you have the right to sell on Amazon?” And they are correct to ask, because it is true, in fact, that we don’t have that right.

I’m not a lawyer, but I’m aware of a legal concept called the “first sale doctrine”. It dictates that a manufacturer, a copyright-holder, does not have the right to prohibit the purchaser from selling that product again. The purchaser, after all, is the new owner, and the owner can do what it wants with the product, whether that is to smash it to pieces, or repair it and sell it again. If Apple was to sue me directly for selling an Apple product I own, that would be a violation of the first sale doctrine, and they would be breaking the law.

But this is not a first sale doctrine issue. Apple and Amazon have the legal right to make an agreement between themselves. If Amazon wants to dump its small refurbishers in order to make Apple happy, that is a bargaining chip they have the right to play (in exchange for zillions in profit, certainly). It isn’t right that Amazon should dump thousands of independent small businesses, but it IS their right to do that if they want.

The problem is something else. Amazon represents about half the retail marketplace of online sales of any given product. Half of the online universe is now off limits to a certain population. Half of the sky, so to speak, has been blacked out.

And that’s OK -- we’ll survive. There’s still eBay. There’s Newegg.com. There’s Walmart.com. There’s Swappa.com, which will certainly expand substantially due an an influx of estranged Amazon sellers. We will get smarter. We will become more resourceful, more diversified, and we will make it work. Tens of millions of repairable products will still have an outlet and will not go to landfills. Yes, unfortunately, some of us will succumb to this setback, to this yet another of a thousand cuts, but the majority will persevere. This is not the final blow.

But here’s the problem: What’s to stop Apple from forcing the same agreement on eBay? Walmart? Swappa.com? The financial incentive will certainly be enticing to them. What if they succumb to pressure and 98% of the sky is blacked out? What if Apple successfully circumvents the first sale doctrine by effectively privatizing the entire public marketplace?

Does it matter that you legally have a right to sell a used product, a repaired product, a refurbished product, if you only have 2% of the Internet marketplace to work within? 2% means you’ve been pushed into the shadows -- into the black market, essentially. If you’re selling on marketplaces within the bottom 2%, it’s a given that you’ve been de-legitimized. It’s assumed there is something wrong with you if you are in that place. Something wrong with repair, something wrong with refurbishing, and even something wrong with the idea of small business in general.

Don’t be fooled. I’m talking about selling refurbished/repaired Apple MacBooks, a relatively niche business. But whatever product or service you make your money delivering, this very issue will soon be knocking on your door (or appearing in your inbox), and you will be screaming at the dark sky just as I am.

Is it OK for big business to flip thousands of Monopoly boards until it has a literal monopoly on the marketplace, leaving everyone else with nothing but the realization that the game is fixed?

We need to have a conversation about the structure of the Internet landscape. In this new world, shouldn’t we recognize that building small businesses, fixing devices, and selling our services for a profit represent values worth preserving? The question is not what big companies can legally get away with, but what kind of world we want to live in.

Don't Spend Money Starting Your Business

September 16, 2018

Lots of people ask me what they should buy before starting a refurbishing business, and they are usually surprised when I tell them not to buy anything (aside from inventory, of course).  Maybe a screwdriver kit from iFixit, because that's obvious.  Maybe a desk to work on, but that shouldn't be paid for -- it should be found in an alley on trash day.

Look for absolutely every excuse to NOT spend money.

Your freedom as a business owner depends on having a positive bank balance.  When that runs out, you're done.  Think of it like a game -- the world wants to rob you, and you're not going to let it!  Instead of proactively spending all your money, or even worse, going into debt, you should do a proof of concept and let the demands of the business transactions you encounter tell you what you need to buy. In a transaction-based business, it all comes down to the ingredients of the transaction. The sum of the costs involved (your cost of goods sold) should be less than what you sell it for. Sale price minus COGS equals profit. The transactions you engage in should ALWAYS produce profit.  If they don't, you're doing something wrong.  Yes, there may be capital expenditures that you end up having to endure in the long run, but for now let the requirements of the transactions -- laptops right in front of you that you are going to repair and sell -- tell you what you need to buy.  And even then, try to find workarounds.

It's all about proving to yourself that you are building a ship that floats and doesn't leak.  If you buy piles of expensive equipment just because you think you'll need it, and you rent a retail space just because you think you'll need it -- because that's what everyone else is doing, after all! -- you will cloud your vision and make it very difficult to know if your ship is sinking or floating.  You'll find out eventually, but by then it will be too late to change course.

Don't quit your job without doing a proof of concept first.  A proof of concept is a small, relatively less-risky version of the business you are planning to create.  It's a test.  For this test, use an inconsequential amount of money, i.e. an amount that you could lose without putting yourself in a catastrophic situation.  A proof of concept could be, for example, to turn $1000 into $2000 inside of a month. 

My own proof of concept was to make $3000 profit within a month, and I gave myself $3000 to work with.  Only then would I allow myself to quit my job.  Fortunately my concept was viable and I was motivated enough to make it work, and so I quit.  But if I had only made $1000 profit, or worse yet lost money, I would not have been in a catastrophic financial situation.  I would have been able to examine what I did wrong -- why the transactions were not profitable, or why there weren't enough of them -- and been ready for another attempt the next month, all with my corporate paycheck still keeping me afloat.

Essentially, it's a science experiment:  Create a hypothesis, test it, evaluate the results, then repeat.  If you have no hypothesis to start with or any means of evaluating results, you're driving blind and certain to hit a wall.

Amazon MacBook Sellers Suspended over Bogus Customer "Counterfeit" Claims

November 06, 2016

I am now aware of a couple different Amazon MacBook sellers who very recently, through no fault of their own, have woken up to find their accounts suspended because an angry customer clicked the "counterfeit" button in one of Amazon's various feedback mechanisms.

Obviously, there is no such thing as a counterfeit MacBook. Likely, the customers just clicked every button possible to get their complaints heard. It's conceivable that a 3rd party power adapter or battery prompted the claim -- with Amazon, you just never know what triggers any action, and unfortunately there is no intelligent entity on the Amazon side willing to look at these cases and realize, "Hey, there's no such thing as a counterfeit MacBook, so this is clearly in error." In the Kafka-esque, algorythmically-determined world of Amazon, you often end up with a suspended account, with no clear idea why, and limited means of recourse.

What is clear here is that the recent hysteria over 3rd party power adapters being called "fake", "counterfeit", and "knockoffs" is now having a negative effect in the refurbishing world, and Amazon is freaking out at even the slightest suggestion that a device is not OEM. As I have stated before: This is why it is so important that we must allow for the differentiation between legitimate 3rd party devices and ones that are actually fraudulently claiming to be OEM. When we paint with too broad a brush and all 3rd party devices and components arbitrarily get labeled "fake" and "counterfeit", this negative backlash on our industry is exactly what we get.

To make matters worse, several manufacturers on Amazon have become "by permission only", meaning that sellers must be approved by Amazon (and likely the OEM) to sell those brands. If Apple goes in that direction, and the hundreds of Amazon MacBook refurbishers are banned, then millions of older MacBooks will have lost their biggest and most legitimate marketplace, and will therefore be doomed to eBay, CraigsList, or even more marginalized arenas.

It's simply impossible for the mid to low-end Apple refurbishing world to exist without the use of 3rd party power adapters and batteries. Five-year-old laptops from recyclers, schools, and corporations do not come with enough good OEM batteries or power adapters to support the industry, and when you're talking about a $100-$400 laptop, the inclusion of a $79 power adapter and/or a $99 battery tanks the very prospect of being a viable product. A quality 3rd party power adapter and/or battery is the only solution.

As crappy as 3rd party replacement components can sometimes be, we need to support their right to exist and do what we can to make them better and identify the good ones -- our repair/reuse/refurbishing world depends on it!

ComEd Smart Home Showcase Essay

July 01, 2015

About a year ago I entered a ComEd contest hoping to win solar panels for my roof. I didn't win, probably in part due to the fact that I had an old roof at the time. But I just came across the essay again, and while it's not an epic feat of writing, it's certainly relevant to recycling, energy conservation, and many of the issues that I have become familiar with over the years, so I thought I'd post it:

Unfortunately, a house doesn’t come with a manual.

Twelve year ago, as a naive new homeowner, one of my first impressions was that the washer and dryer were the same models that I had grown up with in the 1980s. Another was that I didn’t know how to use the thermostat. When I moved it slightly to the left, the house got cold. To the right, the house became a sauna. Also, I wondered, what was the second trash bin in the alley for? I guessed it was recycling, but not knowing what to put in it, I was intimidated.

A $350 utility bill was the first sign that my house was not efficient. I quickly realized my habit of leaving the lights on was probably not good for my wallet. Every day after work, I toured the house to see if any light bulbs were out, and usually one was. Another finding -- the house had been sold to me with all the outer windows open, and not realizing this, I had left them that way all winter. Whoops!

Five years ago I quit my corporate job and started a computer repair business. At first I didn’t think about environmental implications, and it was just a way to make money. But I soon realized that the broken computers I bought from electronics recyclers would have been scrapped if I hadn’t found them. I was, effectively, making a living off of someone else’s trash. This was a turning point for me -- the idea that there was so much waste in the world, so much unused energy discarded, that I was making a living by simply utilizing what others had thrown away.

From that point, I started to see things differently. I searched the Internet and learned what to put in the recycling bin. I found out that my 30-year-old appliances, while well-built, were far from efficient. I replaced my bulbs with fluorescents, and since then I have almost forgotten what it’s like to change one.

Traveling abroad with this new perspective, I noticed lights turning off automatically upon exiting a room. All bulbs were fluorescents. Cars were very small, and so completely packed that people hung out the windows. Tire “re- treading” stations were everywhere. I came to the sobering realization that people were not doing these things out of some good-natured desire to save the planet, but rather out of necessity. I discovered that we are lucky -- only people so relatively wealthy could grow up being as naive about energy as I had been.

I would be a great candidate for the Smart Home Showcase precisely because I have been on this personal journey, and smart appliances and technologies constitute the perfect next step. Using energy efficiently is not always easy, or obvious, but with a combination of awareness, effort, and technology, it’s possible for everyone to improve and make a huge difference. I’d be proud to be involved in an effort toward that end, and to be an official advocate.

It's an iFixit/RDKL Inc. Christmas!

December 16, 2012

I am honored to be featured on this year's iFixit Christmas card!  I have to say, it's always been great to have an ally in the repair business like iFixit, and I honestly can't imagine what repair would be like without them.  Not only do they provide amazing guides that make my job easier, and allow me a forum to communicate with others on the topic of repair, but they are relentlessly dedicated to the cause of making the world a better and more repairable place.  Thanks, iFixit!  Also, thanks to Seth Lowe at sethlowephoto.com for taking the pictures!

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