The idea is that manufacturers like Whirlpool or Lexington Furniture don’t normally sell direct to consumer, they sell to wholesalers or retailers that buy in bulk or guarantee volume. Manufacturers sell to wholesalers and retailers at lower margins than they would if selling direct-to-consumer because the high volume more than offsets the lower margin.

So how can a consumer buy something at that low margin wholesale price? DirectBuy aggregates individual consumers and negotiates a deal with manufacturers to represent a bunch of individuals as if those individuals were one retail store. The manufacturer won’t agree to sell to one person at a low price, because the volume isn’t there. But if enough people band together, then the volume makes sense.

So DirectBuy offers this service and in exchange wants an up-front fee. If they dindn’t charge it up-front, you could joing the club for one week and order everything you ever wanted and then quit the club. They would never be able to stay in business with no one actually paying their membership dues and quitting after one week.

Since the fee is up-front and is high, joining only makes sense for folks that have a lot of major purchases to make which will more than offset the cost of the membership. Typically this is folks furnishing or remodeling a large home. Those with smaller homes or who do not need to buy a lot of new high-margin goods won’t benefit.

Does that make sense now or are you still confused? I’m not a DirectBuy fanboy and not an employee, just trying to explain that there is a rationale for the DirectBuy business model and it does make sense for them and most of their customers if you actually take the time to think about it.

The no return policy is tough, but they are up front about this. You have the opportunity to inspect the product when you receive it and reject it at pickup. If you take it home, you can’t send it back unless you are making a warranty claim to the manufacturer. Again, this is because DirectBuy is not a store and doesn’t manage inventory and returns.

As for suppliers changing their prices, this is a fact of reality. If GE raises or lowers their price on a dishwasher, DirectBuy may not get notified until you place the order and GE reports back that their price sheets have changed. This is pretty rare, but again because DirectBuy isn’t a store and stocks no inventory, they have no way to honor a manufacturers old prices if they change suddenly.

These are not things DirectBuy hides, they are clear that you are dealing directly with the manufacturer and there is no store inbetween you to provide services such as managing inventory or processing your warranty claims on your behalf. If you can accept this higher level of uncertainty and overhead on your part, then your reward is significantly lower prices. It’s a tradeoff some will make and others will not.

QUOTE:

IMPORTANT MERCHANDISE TERMS:
- The Club disclaims all warranties regarding the merchandise
- Any need for subsequent repairs or service, after receipt of merchandise, is members? own responsibility.
- MERCHANDISE MAY NOT BE RETURNED.
- The entire merchandise price plus handling fee, estimated freight and sales tax is required as a down payment at the time of placing an order with the Club.
- Suppliers reserve the right to change their prices without notice.
- From time to time some suppliers and services are dropped and others are added
- Only the supplier has the right to cancel an order.

http://edumacation.com/DirectBuyMembershipAgreement

No Warranties, No Price Guarantees, No Returns, No Guarantee of any savings, 100% purchase price due upon ordering, “Suppliers” can change prices or cancel at any time, and no guarantee of “Supplier” availability; this just to name a few of the “benefits” agreed to in their sales contract costing what? $5000.00 or more depending upon the franchisee.

Not a scam?

You decide.