How can you profit from spending $200 more for your Iphone than the new retail price and at the same time learn a valuable marketing lesson?
Thousands of people were willing to pay $600 to own a fancy new gadget
- Many wrote about it on their blogs (for traffic or enhanced credibility)
- Thousands were the envy of their friends (did you really keep it hidden?)
- Lots no doubt benefited from some level of enhanced productivity or connectivity
You Have Now Been Scammed Out Of $200?
Lots of people are coming down very hard on Apple, posting about how you might be able to get a rebate if you have owned it for less than 14 days.
I am not sure whether that is purely a reaction to the difference in price, or what I feel is a greater factor, the difference in perceived value, and prestige.
You will no longer be showing off a $600 phone that not everyone could afford, it is a $400 phone, and those with just 4GB of memory have an outdated model.
This might seem a little cynical, but I live in Europe and didn’t even have the chance to buy an Iphone and reap the benefits.
I am sure if my father-in-law saw me using an Iphone one Sunday he would openly chastise me for spending so much money just on a mobile phone, but secretly there would be a certain amount of envy, and possibly a gain in understanding and credibility – the next day he would go visit his friends and proclaim how successful his son-in-law is, and spend hours talking about a gadget he doesn’t really understand the advantages of.
In many ways spending that extra $200 as an early adopter makes more sense than buying an Iphone for $400 now.
People frequently refer to the productivity benefits of buying 2 or 3 30″ Apple Cinema HD Displays, which retail for close to $2000 each (but can be picked up on Ebay for far less)
The depreciation on those monitors is probably very similar to that of the Iphone, but you benefit from it anyway.
When you buy a new car, you lose 30% of its value as soon as you put the keys in the ignition, but people still buy new cars, often at a premium rather than waiting for a special offer later in the product life cycle.
Which brings me to Mike Filsaime, once a car salesman, but he knows an awful lot about product pricing.
Mike Filsaime on Product Pricing
Mike wrote an article about the connection between Fish, Poles, Boxes and Buttons, but it is really about product pricing and return rates.
What Mike writes totally flies in the face of concepts such as “Teach a Man To Fish, Feed Him For A Lifetime” and is based upon his actual sales figures and refund rate.
- Fish: Teach â€œHow toâ€ Catch Fish – 10% of market, high refund rate.
- Pole: Sell The Pole – 20% of market, medium refund rate
- Box: Give Him The Fish – 30% of market, Low Refund Rate
- Button: Prepare the Fish Dinner – 50% of market, Pays a Premium, keeps coming back, and virtually no refund rate.
I suppose you could also compare this to TV dinners and take-away food, and how food your partner makes always tastes nicer than food you make yourself (assuming you can both cook)
How To Make A Profit On Your $600 Iphone
If you study Ebay, you will notice that the phones people want to buy are not those that are direct from Apple or AT&T stores. People want to buy unlocked Iphones.
The sellers are offering a premium product for those people who are willing to pay for a premium service.
If you had the technical skills or access to Iphone unlocking software, right now you literally have a license to print money (and lose it all when Apple and AT&T sue you, but that is another matter)
It could be possible to create a premium bonus to allow you to resell your Iphone at a higher price, maybe as much as $20 or $30 more, if you offer plenty of hard to find information and tips on how to use the Iphone effectively, maybe with video.
If it does help you sell at a higher price, you have a product you might be able to sell separately, or in some way sell the rights to it to other Iphone sellers looking to make a better margin.
Maybe it could be turned into an Iphone owners club, with the bonus as a loss leader you effectively give away to build up a list.
How You Really Make Money From This
Just by understanding what drove you to be an early adopter of the Iphone, and what intrinsic benefits encouraged you to buy one is a marketing lesson in itself, and could well be worth the $200 or more it cost you in being an early adopter.
Final Quote From Steve Jobs Himself
In an interview today on USA Today, Steve Jobs said the following:-
No, he didn’t say you will get your money back (unless it is as suggested above recently purchased)
What he did say was
I own every Bob Dylan album ever, but I buy a lot of it on iTunes, because I guess I’m just too lazy to rip it from the CD.
Learn from Steve Jobs and Mike Filsaime
Forget about the $100 coupon offered by Steve Jobs, if you purchased your Iphone using a credit card you can possibly get the full difference in price refunded.