Apple, Amazon, Price Optimization, Customer Service & Me

What can be learned from my recent experiences trying to buy two smartphones on short notice, online -- especially as they relate to Price Optimization, Shipping and Customer Service? On Tuesday, December 3, I went into an Apple Store in Madison, Wisconsin USA to buy a 64 gig iPhone 5s. Easy, right? For business reasons, it had to be an "unlocked" iPhone (which means it isn't attached to, or subsidized by any telephone service provider). It also means it costs A LOT more. The Apple store showed me their price for the unlocked model was $894US. "But, we don't/can't sell unlocked iPhones in our Apple Stores, you'll have to order it from Apple online," they told me.

Buying An Unlocked iPhone 5s, Online

I hurried home to order the iPhone from Apple online: I called Apple customer service to tell them I needed speedy delivery: "We can't even complete the order for two weeks," she stated. I didn't think I heard her correctly. "Two weeks?" I exclaimed; "I need the phone by Friday, Dec. 6." "So sorry for the inconvenience," came the reply. "Aren't you in business to sell things and to please customers?" I parried. "You can't get it in less than two weeks, so sorry for the inconvenience," she said. "It's a heck of way to do business if you have a product and you have a customer that desires it and you can't provide it," I said. "So sorry for the inconvenience," came the reply, before I ended the call. 

I pretty much gave up on getting the iPhone, but, as a last ditch effort, I checked Amazon, and, lo and behold, they listed a third party seller of the phone, for a price of $1029.00 (a mere $135.00 more than if I could have ordered it from Apple -- and the form allowed me to order and pay for "next day delivery" for the added cost of $21.97). I bit the bullet and ordered the iPhone.

The third party company (TM) responded that they had received the order, would ship immediately, and I would have it the next business day. And that's what happened. With the following footnote: I wasn't home when the delivery was made, but I found the phone package sitting out by the mailboxes in the hallway of my building. I was shocked that the box was not sealed, but folded shut in such a way that anyone with sticky fingers could have come along and slipped it out of the packaging. I was relieved that my $1029.00 IPhone (plus $21.97 for special shipping) was still inside.

Trying To Buy An Unlocked Samsung Galaxy Note 3 Online

I wasn't so lucky about my second phone order. This was for a Samsung Galaxy Note 3 smartphone, which also could not be purchased unlocked from a real retail store. I went to and they listed a different third party seller (ST) from whom to order the smartphone, for $639.29US, plus $39.99 for expedited shipping & handling. 

After two days, I had received no acknowledgement of the order at all from the third party company. I sent an Amazon email to the company and contacted Amazon customer service directly to tell them I was concerned. The email I sent to the third party company bounced back as undeliverable, but Amazon apparently got their attention, as I received the following acknowledgement from the third party Company (ST): It said, Your order arrived too late in the day to deal with it right away (it was sent to them in the a.m. EST!), and you will receive it between Dec. 6 and 9. "Not acceptable," I wrote. "I ordered in time AND paid extra expedited fees and I must have the phone by Friday, Dec. 6." Again, the email to the company bounced back, but Amazon customer service email got through. "The phone will be sent out tomorrow and you will have it by 8:30 p.m. Friday, December 6," the third party seller wrote.

Friday, December 6, at 10:30 p.m., the phone had still not been delivered, even though the FedEx tracking number showed that the package had arrived at FedEx in Madison at 10:30 a.m. that morning. So why hadn't it been delivered? I called Amazon customer service to help me rather than trying to chase this around by myself.

Amazon customer service (in the Philippines or in Mexico or wherever the call was taken at any given time) set up a conference call to FedEx in Madison, that revealed, because of bad weather in Indianapolis, the packages arrived too late to be sent in that day's delivery. "But the customer HAS to have it today," said Amazon. "Let's patch in a call to FedEx national service center to find out what can be done."

"Well, you see," said the ombudswoman, "your package was put in a larger container with other packages that arrived late that day and, since it was marked, "next day" which means next BUSINESS day, and not "overnight" i.e. on Saturday, it will not be delivered until Monday. "What happened to the days when Colonel Smith (founder of FedEx) said that they would empower their workers to do absolutely positively anything to get a package to a customer (whether it included swimming an ocean or climbing a mountain to get it there)?"

Amazon customer service said they would continue to pursue the matter and get back to me. I left for Minneapolis on Saturday, Dec. 7 as planned (which was the reason for the Friday, Dec. 6, deadline).

Amazon said they would try to reroute it to me in Minneapolis, but by Sunday, Dec. 8, no one had gotten back to me. I called Amazon customer service and they told me that they were contacting the third-party company (ST) to see if it could be rerouted. ST replied hours later to say that they did not allow rerouting for various reasons, such as fraud. They offered no advice or information about what to do.

"Let's see if we can reroute it back to the third party company for return and refund before it gets delivered and you're not there to return it," suggested Amazon. I agreed. Amazon succeeded in rerouting the package back to the company. I followed the return tracking on FedEx and by the end of the following week, I saw that the package had been returned and signed for by the third party company.

They did not, and have not, as of today, acknowledged receipt of the package or return of the withdrawn funds.

Amazon tells me they have a system called "A-to-z guarantee protection," where you file a complaint against the company in question, and if Amazon deems it correct, Amazon will refund your money. So there's still more to learn when it comes to dynamic retail price optimization as well as customer service.

So what can we learn from these experiences?

*What customer can afford to waste this kind of time and energy?  

*Some companies don't seem to care about doing business when they have a golden opportunity in their hands.

*Not everyone fulfills a sale as if their business' life depends on it.

*You can charge more when you are the only one that can provide the merchandise. (Did they know this from their use of a pricing intelligence solution?)

*You can charge more when the merchandise is in demand. (Did they know this from their use of a pricing intelligence solution?)

*Delivery gets tricky when there's "a weather incident."

*Apple had already sold phones to other sellers, so no skin off their own back?  

*FedEx doesn't absolutely-positively-when-it-has-to-be-there, anymore.

*ST had the money in their pocket and were way too lackadaisical about fulfillment & service! I can't understand any company throwing away sales, especially ready-made sales.

*Finally, I suggest that Amazon take a look at its backside as well as its front end. Amazon should dump a Third Party seller that doesn't recognize & fulfill the utter privilege of doing business with a company that has the stature, reputation and success of Amazon.   


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Gilon Miller, CMO

About Author

Gilon is a seasoned marketing, sales and business development executive with over 15 years of experience in the software and Internet business. He is the Founder and CEO of GuruShots. Previously, Gilon was the CMO of Upstream Commerce, VP of Marketing at iMDsoft and Director of Global Marketing at SAP. He earned an MBA at the MIT Sloan School of Management and a BS in Electrical Engineering from Tufts University.
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