Something you might want to know about iStore (Core Group)

As usual, Apple’s iPhone 13 pro max landed in SA. As usual, all apple addicts lined up in front of iStore South Africa, kidney in hand, hoping to get the new gadget that does EXACTLY the same thing than their current phone (for f**ks sake, how many GPU do you need to run tiktok.....) I am one of the addicts as well. Last time I did my trade-in was in the actual Apple Store on 5th Avenue New York, the service was great, the staff took my old phone did a quick check and issued me a voucher exactly with the exact amount suggested on the website.

I thought it would be the same with iSore (Core Group), oh boy I was so wrong.

I did an online trade-in evaluation on iStore.co.za, the value came back as R4700 for my iPad Pro 10.5 inch, it was not wonderful, but I decided to take it.

I made an appointment at the Sandton shop earlier today and took the device in. The “technician” took in my device and started his state-o***** evaluation process. After squeezing his eyeball onto the screen for 10 mins, he came to a conclusion that even thought the screen is almost perfect, he still can see some light scratch (the screen was protected by Smart Keyboard all the time). He then came to the same conclusion to the back of the iPad. After clicking some buttons on his system, the verdict came through, my iPad Pro 10,5 inch, wifi-cellular 256G can get me R1040.

I was shocked and speechless, by trading in this perfectly working iPad Pro, I can’t even get myself a new cover for the new iPhone.

I packed my device, left the shop quietly--what is the point of arguing anyway.

After I got home, I could not stop wondering what is iStore/Core group’s business model here, how much money can they actually make out of this trade-in business? I did a little research, and here is the result:

On the trade-in page, the maximum value I can get from iStore for my iPad Pro is R4700, provided the device is not almost new, but absolutely new.

On the preowned device site of iStore (Core Group), they are selling the refurbished model of my iPad Pro for a whooping R9999.

This means, even if iStore pays the customer with the max value, they are adding a 113% margin before selling it back to the market (you might argue they put in effort to refurbish, but the fact that they only pay out R4700 when the device is already “brand new” means the cost of refurnishing is next to nothing as well.

In my case, however, the margin iStore (core group) would have got had they bought my device for R1040 and sell it for R9999 is 861%.

I have seen drug lords operating with lower margin than this to be frank.

This is happening because Apple is not in South Africa and Core Group for some reason has the one and only authorisation of distribution in the country.

We as the end users in SA are already paying the mark-up compare to the customers in other countries because Core Group needs to mitigate their FX risk and ensure the profit. And on top of that, they still found a way of milking the after sale market with even higher margin.

Who should be regulating them? Why are we still letting this happen? I don’t have the answer.

A follow-up to my story, I went on to the market place of Facebook and sold my iPad Pro with my Apple Pencil within 1 hour to a very nice gentleman.

We spent most of our time complaining about how badly Eskom or SAA is ran by the government, we forgot some blood sucking demons are also in the private sector.