Strange day at Apple store
Something strange is going on at the Apple Store in the Christiana Mall.
People are buying large quantities of iPhones that I assume they are reselling or delivering to someone else who is reselling them. I was shocked to see how many were sold during the hour I was in the store.
Two guys purchased at least 350 iPhone 5s (and it was probably more) while another two guys wheeled in a large suitcase to fill with iPhones. Four clerks immediately started waiting on them.
Another young girl, who had a handful of Apple gift cards, purchased at least 50 phones.
I was told by a clerk that each bag held 25 boxes so being a nosey journalist I went around the store counting bags. That's how I estimate that at least 500 phones were sold during that hour. At about $640 each that adds up to $320,000.
The clerk told me that this type of bulk purchase is not uncommon. He also said they all had suspicions what happens after the phones leave the store, but he wouldn't elaborate.
After making a comment on Facebook, someone wrote that the store only allows bulk sales on certain days of the week. She also wrote that the phones were destined for sale in Asia where it's hard to get an iPhone. Another person told me a clerk told her that the Christiana Mall Apple store has the highest sales volume of any store in the country. That seems hard to believe when you take into account the size of the some of the stores in large metro areas.
According to a few stories I was able to find on the internet, some Apple stores have restrictions on how many iPhones can be purchased a day. But I could find very little about the actual practice of bulk purchasing of iPhones.
I did track down a few chat rooms with people writing back and forth about the cheapest and safest ways to mail iPhones to foreign countries. One guy said he was selling iPhone 4s for $1,000 overseas.
Heading to the parking lot, I watched as two men loaded up the back of a Maryland van with bags of iPhones. Buying in Delaware saves sales tax, and when you are spending hundreds of thousands of dollars, saving 6 to 9 percent is a big deal.
According to a 2010 article in the New York Times on-line edition, this practice – called reseller phenomenon – was widespread when the iPhone 4 first went on sale and was not available in China where the demand for gadgets is high.
In New York City, people were waiting in line to purchase phones for $600 and then reselling them to middlemen for $750. The phones were smuggled by person, air and ship to China where they sold for $1,000.
It's the ultimate irony that iPhones are made in China and they end up getting shipped back for purchase at much inflated prices. I assume this is the same thing that is happening with iPhone 5s.