DirectBuy: Difference between revisions
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DirectBuy was founded in 1971 in Merrillville, Indiana<ref |
DirectBuy was founded in 1971 in Merrillville, Indiana<ref |
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name="dbabout" /> 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,<ref name="franchise">{{cite web | title=A message from Debbie Bowen, Vice President of Franchise Development| publisher=DirectBuy |url=http://www.directbuyfranchising.com/dev/fran/Message.asp|accessdate=2007-10-18}}</ref> when DirectBuy was acquired by [[Trivest]], a private equity firm, and [[Allied Capital Corporation]] (stock symbol: ALD) with $83 million to support the buyout.<ref name="trivest" /><ref>[http://phx.corporate-ir.net/phoenix.zhtml?c=77216&p=irol-newsArticle&ID=1086639&highlight= Allied Capital - Investor Resources : Press Release<!-- Bot generated title -->]</ref> In May, 2008 DirectBuy announced its members had made purchases in excess of $1 billion over the past 12 months.<ref>[http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/05-14-2008/0004813537&EDATE= Direct Buy Announces Over One Billion Dollars in Wholesale Merchandise Sold Through Their Design Showrooms<!-- Bot generated title -->]</ref>. In 2008, DirectBuy launched directbuycares.com, a site for members to discuss their savings and shopping experiences.<ref>http://www.directbuycares.com</ref> |
name="dbabout" /> 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,<ref name="franchise">{{cite web | title=A message from Debbie Bowen, Vice President of Franchise Development| publisher=DirectBuy |url=http://www.directbuyfranchising.com/dev/fran/Message.asp|accessdate=2007-10-18}}</ref> when DirectBuy was acquired by [[Trivest]], a private equity firm, and [[Allied Capital Corporation]] (stock symbol: ALD) with $83 million to support the buyout.<ref name="trivest" /><ref>[http://phx.corporate-ir.net/phoenix.zhtml?c=77216&p=irol-newsArticle&ID=1086639&highlight= Allied Capital - Investor Resources : Press Release<!-- Bot generated title -->]</ref> In May, 2008 DirectBuy announced its members had made purchases in excess of $1 billion over the past 12 months.<ref>[http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/05-14-2008/0004813537&EDATE= Direct Buy Announces Over One Billion Dollars in Wholesale Merchandise Sold Through Their Design Showrooms<!-- Bot generated title -->]</ref>. In 2008, DirectBuy launched directbuycares.com, a site for members to discuss their savings and shopping experiences.<ref>http://www.directbuycares.com</ref> |
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==Membership terms== |
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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.<ref name="cr">{{cite web | title=With DirectBuy, it will cost you a lot to save |last=Fichera |first=Chris |publisher=[[Consumer Reports]] |url=http://blogs.consumerreports.org/home/2007/09/with-directbu-1.html |accessdate=2007-10-16}}</ref><ref name="wcbstv">{{cite news |last=Cole |first=Kirsten |title=Big Membership Fee Doesn't Always Mean Big Savings |publisher=[[WCBS-TV]]|date=2006-05-16 |url=http://wcbstv.com/seenat11/DirectBuy.BJ.s.2.235142.html |accessdate=2007-10-16 |archiveurl = http://web.archive.org/web/20071011220726/http://wcbstv.com/seenat11/DirectBuy.BJ.s.2.235142.html <!-- Bot retrieved archive --> |archivedate = 2007-10-11}}</ref> In 2009, the [[Star Tribune]] reported that enrollment fees are $4,700 and then $99 a year after 30 months.<ref name="mst">http://www.startribune.com/lifestyle/yourmoney/51060852.html?elr=KArks7PYDiaK7DUdcOy_nc:DKUiD3aPc:_Yyc:aULPQL7PQLanchO7DiUr</ref> 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. DirectBuy states that a customer may be shown confidential pricing during the Open House, and its "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."<ref name="dbfaq">{{cite web | title=DirectBuy FAQs |publisher=DirectBuy | url=http://www.directbuycares.com/faq.html| accessdate=2008-07-10}}</ref> Some franchises are offering 30 day trials to some potential clients,<ref name="mst" /><ref>http://www.burbankleader.com/articles/2009/09/16/business/blr-bizbriefs16.txt</ref> valid for up to $1,000 in purchases.<ref name="dblim">{{cite web |title=DirectBuy Free Membership |publisher=DirectBuy|url=http://clubs.directbuy.com/content/30DayTrialPop.php |accessdate=2009-09-13}} {{Dead link|date=October 2010|bot=H3llBot}}</ref> |
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==Awards and Partnerships== |
==Awards and Partnerships== |
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==Criticism== |
==Criticism== |
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Consumer Reports' 2007 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" but cautioned its readers that "since you can’t shop around beforehand, you’ll be joining blind." <ref name="consumerreports">{{cite web | title=With DirectBuy, it will cost you a lot to save|publisher=ConsumerReports.com|date=2007-09-13|url= http://blogs.consumerreports.org/home/2007/09/with-directbu-1.html|accessdate=2010-3-16}}</ref> 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 8% 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." <ref name="cr" |
Consumer Reports' 2007 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" but cautioned its readers that "since you can’t shop around beforehand, you’ll be joining blind." <ref name="consumerreports">{{cite web | title=With DirectBuy, it will cost you a lot to save|publisher=ConsumerReports.com|date=2007-09-13|url= http://blogs.consumerreports.org/home/2007/09/with-directbu-1.html|accessdate=2010-3-16}}</ref> 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 8% 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." <ref name="cr" /><ref name="wcbstv" /> |
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===Cease and desist controversy=== |
===Cease and desist controversy=== |
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Revision as of 15:53, 12 December 2010
| Company type | Private |
|---|---|
| Founded | Merrillville, Indiana USA, (1971) |
| Headquarters | Merrillville, Indiana USA |
Key people | James L. Gagan, Founder Scott Powell, President |
| Products | Home furnishings, home improvement, entertainment and outdoor, flooring, and accessories |
| Website | directbuy.com |
DirectBuy is a membership buying service with locations throughout the United States and Canada. It is headquartered in Merrillville, Indiana, with 160 showrooms across the United States and Canada.[1] It is the largest franchiser of members-only consumer buying centers in the United States.[2] DirectBuy provides its members the opportunity to buy merchandise directly from the manufacturer and its authorized suppliers.
DirectBuy offers products from over 700 brand-name manufacturers in the United States and over 500 manufacturers in Canada. DirectBuy claims to offer "manufacturer-direct wholesale prices on practically everything you need for your home, both inside and out."[3] Product categories include home furnishings, home improvement, entertainment & outdoor, flooring, and accessories.[4]
History
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,[5] when DirectBuy was acquired by Trivest, a private equity firm, and Allied Capital Corporation (stock symbol: ALD) with $83 million to support the buyout.[2][6] In May, 2008 DirectBuy announced its members had made purchases in excess of $1 billion over the past 12 months.[7]. In 2008, DirectBuy launched directbuycares.com, a site for members to discuss their savings and shopping experiences.[8]
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.[9][10] In 2009, the Star Tribune reported that enrollment fees are $4,700 and then $99 a year after 30 months.[11] 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. DirectBuy states that a customer may be shown confidential pricing during the Open House, and its "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."[12] Some franchises are offering 30 day trials to some potential clients,[11][13] valid for up to $1,000 in purchases.[14]
Awards and Partnerships
In 2006, DirectBuy was ranked #42 on the Franchise 50, a list of the top 50 franchises as rated by their owners, published by Franchise Business Review and ranked #1 franchise in the Miscellaneous Retail Business category in Entrepreneur Magazine.[15]
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.[16]
DirectBuy provides members access to over 12 room settings created by designer and TV personality Christopher Lowell.[17][18]
In March 2008, DirectBuy formed a partnership with Maritz, a St. Louis-based sales and marketing services company specializing in customer experience management.[19]
In 2007 and 2008 DirectBuy of Ottawa received Consumers' Choice Award for Business Excellence in the category of "Blinds and Shades".[20] In 2008 DirectBuy locations in Vancouver and Coquitlam won Consumers' Choice Award for Business Excellence in the category of "Kitchen design and Bathroom design".[21]
Criticism
Consumer Reports' 2007 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" but cautioned its readers that "since you can’t shop around beforehand, you’ll be joining blind." [22] 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 8% 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." [9][10]
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.[23][24] The letter itself was forbidden to be posted online by the DirectBuy attorney, citing ownership of the copyright to the letter as justification. Public Citizen claims that this is "a common method to counter that problem by scaring recipients into keeping quiet", and that the "letter is a good example of the many meritless threats that companies hurl at their online critics in an effort to silence dissent "[25] and subsequently posted the cease and desist letter on their website along with their response to the letter.[24][26][27]
References
- ^ a b "About DirectBuy". DirectBuy. Retrieved 2007-10-16.
- ^ a b "Trivest Announcement".
- ^ [1]
- ^ [2]
- ^ "A message from Debbie Bowen, Vice President of Franchise Development". DirectBuy. Retrieved 2007-10-18.
- ^ Allied Capital - Investor Resources : Press Release
- ^ Direct Buy Announces Over One Billion Dollars in Wholesale Merchandise Sold Through Their Design Showrooms
- ^ http://www.directbuycares.com
- ^ a b Fichera, Chris. "With DirectBuy, it will cost you a lot to save". Consumer Reports. Retrieved 2007-10-16.
- ^ a b Cole, Kirsten (2006-05-16). "Big Membership Fee Doesn't Always Mean Big Savings". WCBS-TV. Archived from the original on 2007-10-11. Retrieved 2007-10-16.
- ^ a b http://www.startribune.com/lifestyle/yourmoney/51060852.html?elr=KArks7PYDiaK7DUdcOy_nc:DKUiD3aPc:_Yyc:aULPQL7PQLanchO7DiUr
- ^ "DirectBuy FAQs". DirectBuy. Retrieved 2008-07-10.
- ^ http://www.burbankleader.com/articles/2009/09/16/business/blr-bizbriefs16.txt
- ^ "DirectBuy Free Membership". DirectBuy. Retrieved 2009-09-13. [dead link]
- ^ [3]
- ^ Two Decades of Doing Right by Customers
- ^ lowelldown » DirectBuy
- ^ The Christopher Lowell Collection
- ^ dBusinessNews :: Daily Business News Delivered to Your Desktop
- ^ [4]
- ^ [5]
- ^ "With DirectBuy, it will cost you a lot to save". ConsumerReports.com. 2007-09-13. Retrieved 2010-3-16.
{{cite web}}: Check date values in:|accessdate=(help) - ^ Leonard, Justin (2007-10-05). "Direct Buy Attorney THREAT Letter". Infomercialblog.com. Retrieved 2007-10-16.
- ^ a b "DirectBuy attorney cease and desist letter as published by Public Citizen" (PDF). Retrieved 2007-10-16.
- ^ Beck, Greg (2007-10-05). "Don't Post This Cease-and-Desist Letter, Or Else". Public Citizen. Retrieved 2007-10-16.
- ^ "Public Citizen response to DirectBuy cease and desist letter" (PDF). Retrieved 2007-10-16.
- ^ 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.