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==External links==
==External links==
*[http://www.directbuy.com/ Official website]
*[http://www.directbuy.com/ Official website]

*[http://www.infomercialscams.com www.infomercialscams.com]


[[Category:Franchises]]
[[Category:Franchises]]

Revision as of 18:21, 28 July 2008

DirectBuy
Company typePrivate
FoundedMerrillville, Indiana USA, (1971)
HeadquartersMerrillville, Indiana USA
Key people
James L. Gagan, Founder
Scott Powell, President
ProductsFurniture, Appliances, Electronics, Tile, Cabinets
Websitedirectbuy.com

DirectBuy is a membership buying service with locations throughout North America. It is headquartered in Merrillville, Indiana, with 160 showrooms across the United States and Canada.[1] It is the nation's largest franchiser of members-only consumer buying centers.[2] DirectBuy provides its members the opportunity to buy merchandise directly from the manufacturer and its authorized suppliers. DirectBuy was founded in 1971 in Merrillville, Indiana[1] by James L. Gagan, and the first Canadian franchise was founded in 1996. The company was incorporated as DirectBuy in 2004. United Consumers Club (UCC) remained the holding company for DirectBuy until December 19, 2007,[3] when DirectBuy was acquired by Trivest, a private equity firm.[2][4] In May, 2008 DirectBuy announced it's members had made purchases in excess of $1 billion over the past 12 months.[5]

DirectBuy offers brand-name products in several categories including: home improvement items such as kitchen/bath cabinetry, windows, plumbing fixtures and appliances; home furnishings including furniture and decorator items; entertainment and outdoor products such as TVs, home theater equipment, BBQs; flooring such as wood, tile, carpet and area rugs and accessories like stationery, luggage and apparel.

Membership terms

Initial membership costs vary by franchise location and have two or three year terms. Members have the option to renew the membership each year beyond the initial term for the current renewal fee. In 2007, Consumer Reports reported that memberships at some DirectBuy locations in the New York area ranged from $4,600 to $4,990 for a three-year membership and then $190 a year for the next seven years.[6][7] The customer must decide at the time of their Open House visit, before leaving the showroom, whether to join DirectBuy after receiving a presentation of services. Since the customer may be shown confidential pricing during the Open House, the "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."[8]

Awards and Partnerships

In 2006, DirectBuy was #42 on the Franchise 50, a list of the top 50 franchises as rated by their owners, published by Franchise Business Review and in October 2007, DirectBuy of Boston South was recognized for 20 years of participation with the Better Business Bureau and 9 consecutive years without a customer complaint.[9]

DirectBuy provides members access to over 12 room settings created by designer and TV personality Christopher Lowell.[10][11]

In March 2008, DirectBuy formed a partnership with Maritz, a St. Louis-based sales and marketing services company specializing in customer experience management.[12]

Criticism

Consumer Reports' review is that "the lack of price transparency makes it hard to evaluate whether you’ll save by joining DirectBuy. But even if you were to save 25 percent on purchases after joining, you’d need to spend more than $20,000 just to recoup your membership fee. DirectBuy might save you money if you’re furnishing a house from scratch or doing a major renovation." Prices for items such as electronics are higher than available from online retailers; the "deep discounts" were found on flooring and high-end furniture. Customers cannot return items, cancel orders, or terminate their membership. A 6% handling fee, shipping fees, and tax are added to the cost of items purchased. Some complain of poor customer service and long waits for purchased goods. "Since DirectBuy outlets are franchises, service varies by location. Most outlets have a good record with the Better Business Bureau, though some have a poor one or have been suspended from the BBB." [6][7]

Cease and desist controversy

Attorneys for DirectBuy issued a cease and desist letter to consumer blog infomercialscams.com for "unwarranted and defamatory attacks" posted about DirectBuy by visitors to the blog and asked that the comments be immediately removed.[13][14] The letter itself was forbidden to be posted online as the DirectBuy attorney cited ownership of the copyright to the letter. Public Citizen claims that this exercise of copyright was to try to avoid the "Streisand effect" of creating further embarrassment for the company,[15] and subsequently posted the cease and desist letter on their website along with their response to the letter.[14][16][17]

References

  1. ^ a b "About DirectBuy". DirectBuy. Retrieved 2007-10-16.
  2. ^ a b "Trivest Announcement".
  3. ^ "A message from Debbie Bowen, Vice President of Franchise Development". DirectBuy. Retrieved 2007-10-18.
  4. ^ Allied Capital - Investor Resources : Press Release
  5. ^ http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/05-14-2008/0004813537&EDATE=
  6. ^ a b Fichera, Chris. "With DirectBuy, it will cost you a lot to save". Consumer Reports. Retrieved 2007-10-16.
  7. ^ a b Cole, Kirsten (2006-05-16). "Big Membership Fee Doesn't Always Mean Big Savings". WCBS-TV. Retrieved 2007-10-16. {{cite news}}: Check date values in: |date= (help)
  8. ^ "DirectBuy FAQs". DirectBuy. Retrieved 2008-07-10.
  9. ^ Two Decades of Doing Right by Customers
  10. ^ lowelldown » DirectBuy
  11. ^ The Christopher Lowell Collection
  12. ^ dBusinessNews :: Daily Business News Delivered to Your Desktop
  13. ^ Leonard, Justin (2007-10-05). "Direct Buy Attorney THREAT Letter". Infomercialblog.com. Retrieved 2007-10-16. {{cite web}}: Check date values in: |date= (help)
  14. ^ a b "DirectBuy attorney cease and desist letter as published by Public Citizen" (PDF). Retrieved 2007-10-16. {{cite web}}: Cite has empty unknown parameter: |1= (help)
  15. ^ Beck, Greg (2007-10-05). "Don't Post This Cease-and-Desist Letter, Or Else". Public Citizen. Retrieved 2007-10-16. {{cite web}}: Check date values in: |date= (help)
  16. ^ "Public Citizen response to DirectBuy cease and desist letter" (PDF). Retrieved 2007-10-16.
  17. ^ Popken, Ben (2007-10-09). "Donning Copyright Cloak, DirectBuy Forbids Posting Of Cease And Desist Letter Sent To Consumer Opinion Site". Consumerist (blog). Retrieved 2007-10-16. {{cite web}}: Check date values in: |date= (help)
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