DirectBuy / The whole enchilada
I worked for DirectBuy for over 10 years, in the Midwest, Northeast, Southeast and California. First it was called United Consumer's Club then, UCC Total Home and finally, it's DirectBuy. When I began working for the "club" the 10 year membership was $1500 and today it's over $5000. Their business model, while flawed, is simple, sell memberships to generate revenue.
You (the consumer, invited to take a tour based on being selected as a finalist in some "sweepstakes") will be shown incredibly low "cost" pricing on all kinds of consumer goods. You'll be told that you have to make a decision today as to whether or not you want to become members, due to the confidential pricing you've just been shown and the fact that the manufacturers will only allow you to see them once (as non-members). This is not true. There is no such agreement between DirectBuy and any manufacturer. It is DirectBuy's own internal policy, aimed at closing the deal while you are still high on the ether of "confidential" cost pricing. The $5000+ contract (which does not include annual renewal fees, shipping fees and handling fees on all members' purchases) is worded to protect DirectBuy from disappointing you (with your expectations of realized savings) and, most importantly, from refunding any and all membership dues. Once you're in, you can't get out. I can tell you with absolute certainty that unless you're planning on furnishing a home (with high-end, high-dollar improvements) in the near future, you will be disappointed in DirectBuy's performance. The promises made in the pitch are absent from the contract. Read it carefully before signing. Once your state's rescission period passes, you own it. And if you stop paying for it (whether you've used it or not) DirectBuy will send the account to collections, negatively affecting your FICO. Just look around the web, there are 10 negative posts for every 1 positive.
In fairness, if you're a well-heeled consumer who doesn't mind shopping from catalogs, waiting 90-180 days for your purchases to arrive and saving a net average of 23% on those big-ticket items, then DirectBuy might be worth a look. However, if you're like me and the instant gratification of free next-day delivery is worth a few extra dollars, then save the $5000 and have fun shopping the retailers' sales!
You should know that I'm not a disgruntled employee, quite the contrary; I made a great living working for DirectBuy. I simply grew tired of coaxing people into joining that truly had no business doing so. That's why I say the business model is flawed. DirectBuy's clubs are 100% franchised and, as a result, each individual franchisee is responsible for the health and success of their respective club. Well, by the time they cover the rent, utilities, marketing, insurance, salaries, commissions, payroll taxes and benefits, they have to try and make a little profit of their own. After all, it's why they bought the franchise. So, the only revenue stream they have (since they don't profit from merchandise sales) is by selling more and more memberships. Do you think there's a stronger focus on sales or servicing members after the sale? I'll give you a clue: there are an average of 15 full and part time employees working at any given DirectBuy franchise. Out of those 15 people, 2 are dedicated service staff. The rest are in sales, telemarketing, accounting, reception and, of course, the owner. If you attend a pitch, ask 'em some real questions... "How many stores have failed in the US and Canada since United Consumer's Club was founded back in 1973?" or, "How many members decide to re-join the club after the 10-year membership expires?" or, "Has DirectBuy ever polled the members to gauge their satisfaction with the club's services?" "No? Why not?" and maybe even take a list of items you're interested in buying soon along to the pitch with you and have them show you the net savings (be sure to write down model #'s so you're comparing apples to apples). If that savings adds up to more than the net cost of the 10 year membership and you've factored in DirectBuy's shipping, handling, sales tax (many online purchases remain exempt, it varies by state) then go for it.
Otherwise, buyer beware!
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