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Direct Buy, scam or big saving?

Can you believe I just pay $5000 for a membership at Direct Buy, hoping to recoup my membership fee from the saving I will get from the deep discounted catalog items through Direct Buy? At first, it sounds like a scam, I thought so too. CBC news even made a report on this company trying to uncover the scam. Internet forum has very mixed review. Someone call it out right fraud but someone think it is a good deal.

The idea of the Direct Buy is quite simple. You pay the heft membership fee, in return you buy product at manufacturer price plus 8% handling fee and freight fee. Retail shop make their profit from the mark up on the goods they are selling. Direct Buy basically makes money from membership fee. It has minimal customer service. You don’t get any sales who try to sell you stuff or answer your questions. You won’t even see the product you are buying. All you got is a room full of manufacturer catalog and a price. You have to look up all the specification, figure out the part number. You may have to go to retail shop to see the item for real. The staff there only do one thing, help you submit your order form. Then you have to wait for the shipment to come, anywhere from 2-4 weeks. Once you pick up the product, you are on your own to deal with the manufacturer with any warranty problem. You don’t get convenient refund or exchange policy from the retail store.

One thing people complain most is that Direct Buy use the typical high pressure selling tactics. They invite you to an open house, force feed you a video, so testimony form “happy” customers and make you sign the contract right away. The catch is you have to sign up on the spot or they will turn you down. Their claim is to protect their manufacturer price is confidential information, they don’t want shopper use it to leverage against retail shops. At first they refuse to show me the the produce catalog and the price. The sales only willing to quote a few items for me. That does not make sense to me. How can I make decision to spend $5000 without knowing how much I can save?

To keep the long story short, at the end we spent 3 hours in the place. The sales pretty up just gave up persuading me and let me wander the place on my own. I have access to all the catalog and able to check out the price as I like. The catalogs are from known manufacturers, not no name brands. Since I am shopping for furniture and house hold items a lot these days, I recognize many brands from the list. The selection is good, it probably beats any one retail store but can’t beat all retail stores combined. The price is actually pretty good. They are really selling at the cost or very close to the cost. For example, we just bought a Simmons mattress from the Bay on sales, the price of the same mattress at Direct Buy is $780 + 8% handling but not shipping = $842. We pay $715 at the Bay, but that’s on the 2 weeks only the Bay super mattress sales and the Bay somehow made an error in subtracting the box frame from the order to our favor. It should be about $810. The not on sales price at of the mattress is $2000 at the Bay, which is ridiculous. The market price I found when I shop around for the mattress is around $1200.

I check many other things and I am convinced they are real savings. It is probably in the order 20-25% rather than the 40-60% they claim. If I can spend $20000, then I could make my $5000 membership fee worth while. The bottom line is Direct Buy’s price beats non-sales price at retail shop, but probably can’t beat the sales price of big chain stores. You actually get access to many more products than you can find in retail shop but at the same time it limits your choice to their catalogs. The bang of the buck would be on big ticket items the retail store getting a fat margin like furniture, vanities, light fixtures, cabinet, fringe, etc. You won’t save much on small appliance as the chain stores probably get a better deal on sales. Since we are remodeling our kitchen and the cabinet is really cheaper than Home Depot. I decide to give it a try. Although the membership contract says absolutely no refund, by law BC has 10 days cool down period and I know there are court precedence winning against Direct Buy to get your money back within the first 10 days. If after doing more calculation, I could save close to $5000, I will keep my membership otherwise I will cancel it.

Stay tune on my price hunting adventure with Direct Buy. I will keep everyone posted. See whether I turn out to be an idiot got scam $5000 or a smart shopper who saves a lot.

4 comments to Direct Buy, scam or big saving?

  • To be honest, when I saw this title and the first line, I thought, “Oh sh*t, what did horace get himself into?” And then I saw you heard and hopefully watched the CBC Market Place show “DirectBuy: deal or no deal?”
    http://www.cbc.ca/marketplace/2009/the_price_cut_promise/main.html

    I hope it work for you. At least you went into the deal, paying $5,000 knowing fully that people have reported it was problematic.

    For me, given the sales tactics and what I learned from CBC Market Place segment, I personally would never shop there and I would recommend to my friends to avoid it.

    • Yeah. I watched the CBC Marketplace report and I read all 100 messages there plus any review I can find online. The only way I can get a real quote on Kitchen cabinet from Direct Buy is joining the membership. If their claim of saving 40% is true than I will break even right away.

      I already checked out the Craft Maid cabinets at Home Depot, it is expensive even after the 15% discount. I have an appointment with Direct Buy kitchen designer tomorrow. I am pretty confidence I can get my money back within 3 days and probably need to go through some legal troubles to get it back within 10 days. (I joined the company legal insurance plan, so lawyer letter is already paid!) Let’s see how it goes.

  • It is good when you have a lot of things on your shopping list e.g. if you are renovating your house, etc.
    If you can share your membership with your friends and all of you buy the things you want, then I think the $5000 can be justified much better. Otherwise you have to buy a lot of things to recoup the fee end up you may buy something you don’t really want or not necessary.

    • The membership contract forbid you buy things for friends, but encourage you buy gifts to friends. Technically, unless you buy 10 tables or 10 fringes, there is no way they can police buying things for friends.

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