Direct Buy Canada – Is It Worth It?

I went searching for a couch this past summer and vowed not to spend more than I had to.  After all, as a personal finance blogger just by buying furniture that isn’t used or stolen from the garbage dump, I’m basically committing a sin in some of my peers’ eyes.  I’m pretty frugal in day-to-day life.  I don’t eat out very often, I buy maybe six coffees a year from Timmy Ho-Hos, and my entertainment budget is smaller than most people’s phone bills.  That being said, I like the odd video game and sweet HBO series (we’ll just say I get those very cheap and leave it at that).  I also tend to do a lot of reading.  All that to say, I will likely spend a fair amount of time (like most North Americans) sitting on my couch, and I don’t spend a lot of money frivolously.  With that in mind, I set out to get the most comfy, and most durable sectional or couch set that I could get my hands on for a reasonable price.

“Buy Straight From the Source”

My search led me to this distributor known as DirectBuy.  They market themselves as having over 150 franchises in the USA and Canada.  The main concept behind DirectBuy is that they are an “insider’s club” where members can purchase brand-name goods directly from manufacturers’ warehouses and by doing so avoid the large retail markups that we see on most products.  The main catch is that membership is certainly not free.  It is impossible to say what a membership will cost anyone specifically because each DirectBuy franchise is independently owned and operated and sets their own price.  Most media sources I looked into reported the probable membership fee at $3,000 to $7,000.  Needless to say, that pretty much ruled out my interest, but I was kind of curious about this consumer model and if their prices really could beat those in a cut-throat retail world by enough to justify that hefty membership.

Good… and Bad?

direct buyWhat I found when I looked into DirectBuy in various online hangouts was a ton of complaints and a lot of praise as well.  I don’t know if I’ve ever seen less consensus about a consumer business online before.  DirectBuy was roundly criticized for its pressure-based sales pitches that routinely stated, “You must buy your membership now or we will never give you the opportunity again.”  Yet, but the same token the company boasts a fairly impressive rate of membership retention.  DB defends itself on this account by saying, “This policy is in place out of respect for our members, manufacturers and the retail industry. It prevents consumers from asking traditional retailers to match DirectBuy prices.”  Some people claim the service and support they received as a member of DB was great, while others reported it was terrible.  It could be as simple as the fact that different franchises operated within a large spectrum and some were just better than others.

Price Comparison

When it got down to the nitty gritty of comparing numbers, it appears that DirectBuy’s prices did live up to the claims they make in most cases.  This was especially true in the more “high-end” items that would obviously have the most mark up.  DB claims that if you can find the product somewhere else for a cheaper price, they will immediately contact the manufacturer to resolve this issue.  While I admire the principle behind this, doesn’t the idea of comparison shopping promises sort of put you right back at the level of retailer?  If the promises of buying direct from the source are true, shouldn’t there be no logistical way that a retailer should be able to drop their price below yours?

From what I could tell from multiple consumer websites and forums, it seems that Direct Buy was able to offer a 20-25% average discount to most customers.  This means that one would have to be purchasing around $20,000 worth of home furnishings to make it worth the memberships.  I should note that DB management claims that members should count on savings numbers close to 40%, but that number seems pretty dubious.

Is It Worth It For You?

I think that at the end of the day a Direct Buy Membership could be worth the substantial fee if you are furnishing a house from scratch and prefer higher-end brand names.  If you take the plunge be prepared for some weird sales techniques and having to wait a couple of months for your orders to come in.  Finally, online orders aren’t allowed – all DM orders must be placed through a showroom.  From what I can tell, it is best to check with someone you know is a member of a specific franchise to see what the practices are in that area.  As for me and my couch, I decided to take a quick run to the USA and picked up a great reclining sectional for $1,700.  Is it a little more than I could have got something for on Kijiji? Sure, but it’s a luxury I can only justify by saying I enjoy it every day!

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13 Responses to Direct Buy Canada – Is It Worth It?

  1. Patrick says:

    My impression of DB was that it is a bit of a scam (you’re never going to save what they say you’re going to). I think you’re correct in your assessment, that if you’re going to entirely furnish a house completely from scratch it might make *some* sense. Perhaps money-wise it’d work for somebody who’s furnishing several houses.. Also, to me, a lot of the positive reviews you read out there seem like astroturfing, but that’s just my two cents.

  2. BeachBoy says:

    Even if you furnish an entire house, their selection will never have exactly everything you want. And at this price range it’s not like Ikea, you want to pay for what you want… not what they offer.

    I have read a ton of articles on them and I would not deal with them even at half price.

  3. Bob says:

    Is Direct Buy a scam? I would say yes. I have been in furniture retail management for 23 years. Direct Buy like to give the impression there is massive margin on furniture, appliances, electronics and major home improvement products, unfortunately this isn’t the case. The retail environment is VERY competitive and margins are as low as can be. Occasionally when Direct Buy do advertise big discounts on sofas for instances, the pricing is the same or more then major furniture retailers. They take advantage of people since most just trust this quoted savings is real, it’s not. If only we could charge customers thousands of dollars just to be called members!! This borders on evil.

    A smart shopper will shop around and confirm this to be the case and not spend $3000-$7000 (OMG!!) just to be a member and trust there will be savings to cover this rediculous fee. If a fee of the amount isn’t a red flag I don’t know what is!

    As Direct Buy is discovering people won’t make major purchases based on a picture so they have to add brick and mortar stores to do business which alas is exactly what they claim to be avoiding. Of course with people paying huge fees they can afford to lease buildings can’t they? So they are a retailer arn’t they with showrooms you have to buy through, so how is this different exactly? You pay a fee whether you buy anything or not is the difference.

    Please take some advise, shop around at retail get the best price on the best products you can afford from a reputable dealer and save the $3000-$7000. You could furnish numerous rooms for that amount.

    One last point why is it when customers get cold feet and want their $5000 back they have to fight to try to get it? This is a company you want to do business with?

    Some customers act like being a Direct Buy member is quite the status but to people that really understand the numbers they are labeled “suckers”.

    Don’t be a sucker.

    Peace.

    Bob

  4. Adam smith says:

    I have to admit that the $5000 membership fee is a lot and would not work for someone looking to buy a single couch.

    I have purchased several items and the average savings is 25% or higher on the larger high end items.

    A simple way to look at it is if you are going to spend more then 25k then you will make your money back and save on everything after that.

  5. Jan says:

    you spelled Kijiji wrong…

  6. Edna says:

    You know, when a guest is invited to a DirectBuy open house and decide not to join, that’s fine. It’s an invitation because it’s a “Private Membership Club” Many made the choice that it wasn’t for them. There are hundreds of thousands of people who made the decision it was for them and I am one of them. I would also like to clarify that you don’t have to be a home owner in order to benefit from the savings. I joined 7 years ago and was a single mom renting an apartment. Guess what? I have to buy household items just like the next consumer … bedding, dishes, window treatments, furniture, gifts for weddings, birthdays, christmas, mothers day, fathers day, etc, even tires for my car. If I wasn’t a DirectBuy member, I would not have bought some of the things I did because I couldn’t afford a lot of those purchases retail. Even my husband purchased my diamond through DirectBuy. So DirectBuy is not just for someone who builds or renovates their home, its for anyone who consumes products.
    It’s also interesting how some may insist that it’s a “scam” … what about retail? People complain everyday that they hate retail prices … things are too expensive. I used to manage in retail …. that’s a scam. How many times do people run from store to store trying to save $50.00 on a single purchase? And yet they’ve spent that much in gas,driving around and stopping for lunch so where’s the savings in retail? I work hard for my money and I want as much of it in my bank account as I can possibly keep so I would rather shop this way. For those who gripe about DirectBuy and don’t like it, get over it … you were given a choice you never had before … either buy at cost just like a retailer does or buy from the retailer and pay the marked up price.For those “savy” shoppers in the retail world … do you really think a store will sell things to you at the same price they paid? They would be out of business in no time. If you’re wondering what the fees are at DirectBuy, then go check it out for yourself and if you decide it’s not for you then don’t join but at least you make the decision, not your friend or collegue who went to an open house and didn’t like what they saw. Maybe your view will be different. I was talking with a member who joined last week and they were pissed that they listened to a co-worker who went to an open house a year ago and told this couple the membership was $5000 per year so the couple didnt check it out until last week. They were pissed at the people who mislead them because they got the truth that the membership is in fact NOT $5000 a yr and realised they could have saved thousands of dollars on their renovations. How many people like to have other people tell them what to do? and tell them how to spend their hard earned dollars? Step up and decide for yourself, if you don’t like it, walk away. I’m sure with the existing members ( hundreds of thousands of us over the course of 42 years ) we can’t all be stupid. If it was a scam, do you think that all the name-brand manufacturers (who you currently buy from in the retail world) would put their confidential information at risk just for fun? Don’t think so.

  7. Shiv says:

    DirectBuy pricing is competitive. I’ve been a member since 2004 and we’ve saved more on our purchases than we’ve spent on our membership. Since we joined a long time ago, the membership fees weren’t steep so we really have benefited and really like the club we belong to. There are two customer service people we especially like :) For new members, I personally do feel that the membership is a bit steep if you’re not going to be buying a lot of items or doing some major renovations in the house. What you get from DirectBuy in my opinion is quality brands for the same price you would pay for average brands in a retail environment. In the end, I don’t think it is the “frugal” way to live, but if you like higher end brands and don’t want to pay retail prices, you’ll end up saving in the end.

    A couple of points to take note of:
    * I have not been impressed with the extra handling fees that have been tacked on to the prices of goods over the years that we’ve been members. This effectively increases your final price by 4-8%. I think this is the franchises way to earn some steady income apart from new membership fees and renewal fees.
    * The other thing they’ve done is increased the cost to members for home delivery of items. (This is mostly for appliances.)
    * For most other orders you do have to arrange your own method of delivery to your home. This becomes difficult when you order a number of things and they don’t come in at the same time, so you have to travel a couple of times (and pay someone in some cases) to get the items to your home.

  8. jim says:

    If you are considering getting a direct buy membership, you should read this article. It may be a little one sided, but it does show the negative side. Also they claim that 400,000 people are members, but just look at how many people are scammed with the nigerian 419 scams.

    http://www.dailyfinance.com/2010/10/11/if-directbuy-keeps-shoppers-coming-back-why-so-many-complaints/

  9. max says:

    I joined as a Directbuy member because I was doing a massive home reno project. My experience is that dB has way over advertised the savings. And their selection is extremeEly limited. I often find online pricing within 10% of dB pricing after shipping and handling fee and other potential manufacturer fees you are pretty much not saving anything. Plus most items are only shipped to the warehouse so for big items you will need to figure a way to get it to your house. If purchased from a store you can usually get them to delivery to your house free of charge. I definitely would not recommend anyone to join dB to save money because it would be extremely difficult and time consuming in order to recuperate the $6000 members fee.

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