You can leverage the Apple brand to offer premium services that bring in recurring revenue and greater profitability
It's not easy to find the exact revenues that repair and service bring to Apple. But, the indications are that it is worth the effort. For instance, the trade journal Warranty Week estimates that the sales of AppleCare earned the company $8.5 billion in 2021, a 20% increase from the previous year.
In addition, Apple has often signaled its intent to be more repair-friendly with the Self Service Program. Overall, AASPs can continue to grow with Apple, with millions of devices sold and resold every year.
What Revenue Streams are Available to AASPs
Apart from warranty repairs, Apple Authorized Service Providers can also repair devices for which the warranty has run out. Of course, AASPs have to use genuine Apple parts. If parts are not available from Apple (say for older devices that Apple considers ‘vintage’ or ‘obsolete’), you can use a refurbished part. Apple offers coverage for at least five years after they stop selling the specific product. Availability of parts is based on the consumer laws in each country.
Apart from individual customers, businesses or B2B clients represent a profitable source of revenue. It’s often easier for small and medium-sized companies to use one service provider as their go-to repair shop. They’re likely to have devices that need repair year-round.
AASPs can figure out other sources of revenue as well. Not all will become significant sources of income, but it’s usually another way to leverage your expertise in Apple products. The obvious ones would be the sale of accessories — adapters, cables, cases, and anything else that a retail electronics shop would stock. In addition, you can also consider selling AppleCare packages.
You could also consider the sale of refurbished Apple products. Authorized service providers can order Apple consignment stocks, which you can use to repair and sell devices.
Basic Revenue Opportunities
Apple insists that service locations, or Apple Authorized Service Providers, should be "managed as revenue-generating business units." Apple encourages service providers to develop and promote “value-added services” to improve profitability. While Apple does not help with marketing, being attached to the brand does have its advantages. Plus, being listed on Apple's appointment scheduler and list of authorized providers gets you customers.
These are the most commonly offered services.
Out of Warranty Repairs
Depending on the market, customers will continue to choose authorized service providers even after the warranty has expired. You need to bill the customer for labor and parts, of course. It's often more expensive to use original parts if the device is not insured.
This is an opportunity for additional sales as well. You could sell accessories or a service contract that mitigates the risk of high repair costs in case of another accident.
Software Installation & Troubleshooting
Both small businesses, as well as individual customers, might need help with both Apple as well as third-party software. You can create plans that include installation to updates, system performance checks, and troubleshooting.
For example, the latest M1 chip from Apple is not always compatible with all software. This is changing. In the meantime, customers are not always informed about what they should do to get the most out of their latest M1 devices.
Onsite Consulting & Training
Consultation service is an excellent example of a robust alternative revenue stream. It would be a B2B service aimed at small businesses, educational institutions, governmental agencies, etc. Not everyone can afford to have a dedicated IT team. Still, everyone can use an outsourced expert to set up their basic infrastructure and troubleshoot (and repair) any devices they use.
Apart from support, training and consulting offer you opportunities to sell new devices, software, networking equipment, and data solutions. You're not limited to Apple products. You can choose to offer training in other software platforms and networking services.
The most profitable part of such services is that you earn recurring revenue from such customers. The service contracts can be made for one year or longer. It adds to customer loyalty as well.
The following is how Apple sees such consulting services:
Onsite Product Integration - You could assume that more than a few companies work exclusively on Apple devices, which means setting up both hardware and software so that the team works most efficiently.
Network Setup and Installation - This would be a common requirement for small and medium-sized businesses (SMBs) who would need basic network infrastructure. You can design networks, perform cable installations, set up the network and access points, and complete server installation. You could also sell them the required networking hardware and accessories.
Fully Online Repair Service
Apple expects you to maintain a branded retail location because that's how most customers will choose to approach you. However, more users now prefer to do business online. For you, that just means offering a premium service where you collect and ship devices to the customer. You can charge the cost of offering online services to the customer, including a margin to increase your revenues.
The most important thing would be to offer an excellent service experience. You would require a customer portal that improves user experience and be able to manage the logistics workflow efficiently. Fixably, for instance, has a white-label service portal that integrates directly with the repair management software. So no copy-pasting and no chance of missing an online order. In addition, the platform has integrations with several global logistics companies. Tracking a device from intake to delivery is as efficient as possible.
It would also improve your turnaround times and customer satisfaction scores. Win-win for both you and your customers.
Onsite Repair Services
The other obvious way to do repairs would be field service. You perform repairs at the customer’s location. For example, some devices are covered by the AppleCare agreement for onsite travel. If not, market it as a value-added service, and the cost can be passed on to your customers.
Onsite services typically increase your margins while also resulting in greater customer satisfaction. You could even upsell and extend Apple's service agreement (extensions depend on where you offer the service).
Installations & Product Refreshes
Onsite services are not limited to repair. Your technicians can perform software and system installations as well. This service, once again, is likely to be more beneficial to small businesses. And would also offer the opportunity to provide onsite network performance, infrastructure products, and hardware upgrades.
Data Transfer & Recovery Services
A broken phone or computer is an issue because you lose access to all its data. It's one of the things that you need to do when a device is brought in for repair; ensure data is backed up. If there's no backup or no easy way to back up the data, you can offer to do so as a value-added service.
You could even charge a slightly higher price for data recovery services from failing hard drives. Apart from the data recovery service revenue, it's an opportunity to sell backup solutions.
Custom service contracts are essentially a mix and match of some of the revenue streams above. Each business has a unique need, and they often need special service contracts that cover all their requirements. Companies are more likely to pay a premium to avoid risks by having you on retainer.
Apart from Apple authorization, you'd also need to build a reputation for service before you can offer premium service contracts. People should be willing to trust you to be able to support their business.
Refurb is a difficult path for AASPs. While Apple doesn't require you to return all broken parts, they have a structured process for the management of parts. This leaves you with only a small surplus of components and devices that you can use to set up a refurb business.
What you do have is skilled labor. You could always expand to other manufacturers if refurb sounds like an exciting opportunity. Of course, businesses that earn significant revenue from refurbishing devices are buying devices from third-party distributors of used phones and computers. You would need to set up an extensive repair workflow to be a large-scale refurb business.