Direct Buy / Membership Open House Experience
Our personal experience with a DirectBuy Open House in Knoxville, TN
My wife and I went to a DirectBuy warehouse tonight after being invited to attend an open house. The center manager was a really friendly and personable guy from Missouri (the show-me state). We both signed in, received a name badge and were introduced to our "host" who was the center manager's son-in-law. He interviewed us and we shared with him that we were remodeling and would be purchasing carpet, tile, windows, kitchen and bath appliances. He said DirectBuy would be able to save us money and seated us in a room with a TV monitor. There were two other couples in the room and the meeting started out with a seven minute informercial on what DirectBuy does - in short, they claim to save money by bypassing the local retailer and purchasing direct from manufacturer - the proposition sounds cool (emphasis on the word "sounds").
The center manager speaks for a while, shows us another video and then proceeds to show us a wall of products covered with post-it notes. Each product has two post-it notes with a suggested retail price shown and the DirectBuy price underneath. They showed us furniture, washing machines, pots and pans, vacuums, mattresses etc. The DirectBuy price offered averaged 20-50% less according to the center manager. BUT, I wrote down a few prices and the magic ended when I researched the first item, a 46" Sony Bravia - the manufacturer's retail price matched DirectBuy's example - MRP $2799 but the actual DirectBuy price of $2251 was still more than my local Circuit City's price, $2099. The second item was a 21.8 cu. ft. refrigerator - the manufacturer's retail price matched DirectBuy's example - MRP $2299 but the DirectBuy claimed price of $1419 was lower than the $1900 retail price shown on the internet. The third item was a Jacuzzi - we were particularly interested in that one since we had priced them two days ago at all the local retailers. DirectBuy's price of $1131 was blown away by Lowe's price of $974. [Note that we didn't know the prices on the TV and refrigerator at the time we were at DirectBuy's office but when we we did know the price of the Jacuzzi] Needless to say, the Jacuzzi sowed some seeds of doubt in the process. And it got worse from there...
After the price game, the TV was switched on again and we were treated with a list of DirectBuy member rules (if we were to join). "Be nice to retailers, don't leverage DirectBuy prices against retailers, blah blah blah and then we got to rule #6. Rule #6 is a slick sales tactic that says, You can only decide to join DirectBuy right now. If you said no today, then it was no forever. DirectBuy said it was to protect their retailers. . . you decide. Not good. But not the end of the world. Maybe they are committed to making me happy. So I asked, about their written Customer Satisfaction Policy - "What happens if I am unhappy with my DirectBuy membership". The answer was that they don't have a satisfaction policy as to your membership. However, they will replace a defective product (well, so will Sam's Club). In my mind, I am thinking - they want me to decide RIGHT NOW and they won't guarantee my happiness. Bummer, could it get any worse? The answer is yes because they finally revealed their membership fee - $4500 for two years. And guess what, they want the $4500 today. In DirectBuy's defense, they did offer 10% down and they would finance the rest with no satisfaction guarantee.
Additional fees revealed by DirectBuy in their example was a $110 delivery fee (based on $70-90 per hour delivery rates) and a "handling fee" which worked out to a little under 9% in their example. The concept of buying at cost is a compelling one - I really would like to buy at cost, but I also don't want to be taken advantage of. So, I figured out a win-win for this bad situation which I offered up to the DirectBuy sales team (the center manager and the son-in-law) I would generate a list of what I wanted to buy with dimensions, stock numbers etc. and they could give me an aggregate price (so they would not have to disclose confidential manufacturer prices). If their aggregate price justified the membership fee, I would join. Not only did they turn me down, but they started getting smartass and asked where I had priced out my Jacuzzi - I told them Lowe's and Home Depot and the son-in-law said, "that explains it - we can't compete against the big box home improvement retailer".
Well that's my experience - The handshake was good as was the soft drink (did I mention they had free soft drinks). And they started out by being very nice.
I would recommend checking them out for yourself ... maybe you will have as much fun as I did.
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