Canadian Money Forum banner

1 - 20 of 28 Posts

·
Banned
Joined
·
321 Posts
Discussion Starter #1
I was wondering if any of the members here have a directbuy membership and what they feel about it?

i went to the open house today and walked out without signing up because
1) they were not open about their price list and "shipping and handling" fees
2) hassle with returns
3) it did not make sense to buy in now for me. maybe in a couple of years when i want to buy some furniture, replace appliances etc.

i came back and googled it. sure enough, everyone says its a scam. following link is a report on cbc investigation about it:
http://www.cbc.ca/marketplace/2009/the_price_cut_promise/main.html
 

·
Registered
Joined
·
4,647 Posts
I googled it after the commercial assuming it was a scam

Lucky you didn't get fooled into signing
 

·
Banned
Joined
·
419 Posts
Run away! Go to the CBC web site and look up their consumer watch dog show. Cant remember the name of it but they did an expose on Direct buy.
 

·
Banned
Joined
·
2,508 Posts
Wow.. an in-law of mine was talking about how they signed up for Direct Buy. I didn't pay too much attention at first. Now after seeing the video, it's too bad, really.
 

·
Registered
Joined
·
12,788 Posts
LOL $5000!

I refuse to buy a Costco membership because I am dubious about paying for the privilege to shop at a store.
 

·
Registered
Joined
·
4,647 Posts
Some people might save......... but they are obviously preying on people who won't

I can't believe how gullable people are
 

·
Banned
Joined
·
321 Posts
Discussion Starter #12
hmmm

first of all if i had known it was a steep membership of 5k, i wouldnt hv gone. i wanted to do some googling but i could not find time...

well, i almost signed up for it. in fact i signed and then with some stroke of good luck and thinking i backed out. following factors were on my mind:

1) i am due for some remodelling in our house
2) shortly need to paint my home
3) furnish kids rooms
4) buy furniture
5) its time to buy a new TV

overall looking at a spending of at least 30k in the next 3-4 years. my membership would be paid off with the above.

on the other hand:
1) it was like a timeshare sale
2) if i dont sign up now, i cannot come back??? u mean if i walk in tomorrow and hand over a cheque for 5k,you are going to say no??? what kind of a business would do that?
3) why should i pay 5k in advance for "potential" saving in future. i already curse my homeline at P because of which i am stuck to rbc and cannot shop around for better mortgage rates.

i did not want to blindly take people's words on the forums. after doing more research i now understand why they have the policy of sign up now. you need access to a spreadsheet. here is their arguement. over next ten years, you spend on an average 40k in remodelling, 20k in furnishing. 20k in gifts and household items, 20k in appliances, sporting goods, electronics etc totalling 100k. their pitch is that since their prices are at least 30% better than any sale price, you save 30k. so even after membership of 5k and annual fees of 299+hst for 7yrs, you still save.

here is the debunking of this myth after analysis.

first of all, i do not believe i will spend so much. even if i do, not everything will be from directbuy. also, most sale prices will be comparable to db price, i do not believe the 30% saving. taking conservative numbers of 75k spending with 20% saving, all i would save is 15000.

initial membership of 5k over 10 years is 10k at a growth rate of 7.2%
330 annual fee for 7 yrs compounded at the same rate is 2875. add to this a shipping and handling fee of about 10%, which is 7500. in total i will be paying about 20k to DB. so where is the saving???

also, since there is shipping for everything, even if i buy a camera for 100$, there would be a UPS fee of 25-30$ killing the deal (if any). also, since they do not encourage returns, most of the stuff is delivered to their warehouse where they "inspect" the merchandise before "releasing" it to purchasers!!! not only do i not like them opening and repacking stuff, i hate the hassle of no-returns and having to go to the warehouse for every single item i purchase.

overall, i think they try to use high pressure selling tactics to scam innocent simple people.

BUT, having said all the above, i would still like to use their concept from already suckered members if i find any and are man enough to reveal that they got suckered into this ;)

hope my impartial review/analysis helps people from being suckered in future.
 

·
Registered
Joined
·
3,936 Posts
>over next ten years, you spend on an average 40k in remodelling, 20k in furnishing. 20k in gifts and household items, 20k in appliances, sporting goods, electronics etc totalling 100k.

Are they mad? I know people who have had a house for 10 or more years. They remodelled but it did not cost $40K. $20K in furnishing? WTF. If you read that link provided by the OP, one of the DB trolls that posted to the marketplace forum said they found a dining room set for $10-20K but saved thousands by buying it at DB. OK who spends $10-20K for a table and 4 chairs? Honestly these prices are inflated. $20K in appliances? Huh? My parents got new appliances over the past 20 years, that cost them perhaps $2-4K, not $20K. $20K in gifts and household items? sigh. I'm tired just thinking about it. The fact is these people are fast talkers. Why should you shell out $5K so they can have you as a customer? Scam. I don't believe in $45 costco memberships, much less paying $5K to a fast talker.

It's scary that they manage to rope so many people into signing up and responding to their TV ads. When did people stop thinking for themselves and doing due diligence?
 

·
Registered
Joined
·
7,252 Posts
When did people stop thinking for themselves and doing due diligence?
Someone over at the FWF forum has a tagline that says: no one can protect someone who wants to buy the Brooklyn Bridge.
The thousands of scams successfully running these days are testament to the gullibility of our folks.
From the old Nigerian scam, to MLMs like Amway, to tax shelter schemes, art donation schemes, etc.
Some are very crude and simple (like the Nigerian scam & European Lottery) and some are very complicated (like tax shelters, WFG, etc.)
I'd say something like directbuy falls somewhere in the middle.
 

·
Registered
Joined
·
12,788 Posts
I think that anyone should have alarm bells going off when their pitch is: "It's $5,000 and good for today only."

One could imagine a business like this actually being legit. It is not inherently a 'scam' business model, like MLM.
 

·
Banned
Joined
·
23 Posts
We purchased a Direct Buy membership 10 years ago for about $3000. After, I think, 3 years we then had to pay a yearly membership fee of $165. Over the years we have managed to recoup the outlay. This year they told us that our membership was a 10 year contract and that we would need to sign up again.

At today's price of over $5000 and over $500 per year in membership fees, I think there is very little chance of ever recovering your outlay.
I think for someone who builds or renovates houses for a living it would make sense, but for the average home owner, it's just not worth it.

When it comes to appliances, their prices are spectacular. I purchased a couple of washer and dryer sets and saved over $1000 each time (2 different houses). I bought top end models for the low/medium end price.

Late last year I purchased 2 TV's (LCD & Plasma). I was able to get the same TV's, at Sears Boxing Week sale, for the same price as Direct Buy, so I bought them at Sears.

One of the problems with DirectBuy is that they are a catalogue store. You look through the catalogues and then order the product. If you want to see the product, you have to go and look in a regular store first. The products generally take 2 to 6 weeks to arrive. If your fridge dies, can you really wait that long to get a new one?

Overall at today's prices I think unless you are planning a complete and total renovation of your house, it probably just doesn't make sense. I also despise their "timeshare" like buy now or miss out, high pressure sales tactics.
 

·
Banned
Joined
·
321 Posts
Discussion Starter #17
i do not see it working even for people renovating or contractors simple because of what you just said - its a catalogue store. i do not think they have the patience of waiting for example for flooring for 6 weeks!!! it would wreck the contractor's clientele completely...
 

·
Registered
Joined
·
6,879 Posts
Most of their prices are available from suppliers directly. You can get most appliances at cost plus 10% IF you are buying in bulk like DB is. Similarly, kitchen cabinets. Your installer can get the discounts and share them with you.
 

·
Registered
Joined
·
105 Posts
Direct Buy can be OK for active real estate investors (i.e., flippers). A former neighbour of ours flipped four or five homes per year and purchased all of his stuff at DB (windows, paint, cabinets, etc.) I checked the pricing on a few of his purchases and they were very competitive. For the average homeowner with a few jobs to do, it may not be worth it.
 

·
Banned
Joined
·
23 Posts
If by bulk, you mean you purchase 100 washing machines, then that is true. I found that I could buy a washing machine from DirectBuy cheaper than many stores can buy it from the supplier.

I know a contractor who has a deal with a large nationwide chain. He offered to get me a price on a washer and dryer combo. The store manager gives him cost + 7%. He showed me his price book and the price I got from direct buy was significantly cheaper than the stores cost price.

Most prices from direct buy are the price that stores would get if they were to purchase large quantities. Other than some of the big name country wide chains, most stores can't purchase at that maximum discount price.

On many items DirectBuy is massively cheaper than you will find elsewhere, but you still have to account for the $5000 join up price and the $500 yearly membership fee. You have to buy an awful lot of stuff to come out ahead. Also, it is very easy to end up purchasing a higher end model for the price of the lower end one that you were originally looking at. You end up spending the same money but get nicer stuff, so from a budget perspective, you still spent $X and didn't save anything.

There are also some things that really didn't seem to be cheaper, like kitchen cabinets. When you look at the price alone, they're cheaper, but when you factor in installation, it's not necessarily a better deal. I ended up purchasing cabinets though another company because they were running a really good sale at the time we remodelled our kitchen.

You can't just go to DirectBuy and expect that all their prices are the best, you still have to do your research. Things that have large markups (like kitchen and laundry appliances) are almost always cheaper at DirectBuy, but you should still double check.
 
1 - 20 of 28 Posts
Top