Recient visit, October 2006,to showroom for sales presentation a/k/a Guest Visit Pass was quite interesting. Sales presentation did offer examples of how the system worked. As is with most sales presentations only the aspects that were the most favorable were stressed. Little time was used in explaining the additional fees that are attached to each purchase, actualy just glossed over (one sentance total). By way of example : buyers premium of 8% of purchase to DirectBuy,shipping and handling fees, setup fees. As in all high ticket sales presentations the effort was on the warm fuzzy feeling of the item. In this case the ability to buy at a discount. No effort was made to demonstrate at what point there would be a break-even point on costs. A discount is only a discount when you actualy save money, not just think that you have.
With the information that I was able to obtain while I was there ( 2 hours ) I have come to the following concllusion.
With a member ship fee of $4,500.00 for the first three years and $199.00 for years 4 through 10. The minimum break-even point would be aproximatley $20,000 in purchases through DirectBuy assuming the best case, worse cast (depending on the discounted amount of the murchandise)would yield a break-even point at aproximatley $49,000.00. Thats is $20,000 to $49,000 just to get to the point that you actualy start saving money during the first 3 year $4,500 mimbership fee pluss DirectBuy added costs. My caculations do not take into sales tax.
I am confident that the DirectBuy Franchise System throught the country opperat at about the same level of fees and costs. I am not saying that someone can not save money using DirectBuy. But rather at what cost. Sales people can manipulate numbers to creat the outcome that will entise the customer.
If DirectBuy were to lay out the actual fees and costs of purchasing demonstrating a realistic projection of actual amounts meeded to be purchased through their system, I dought that many would come to the sales presentations much less actual join after being shown real cost benifit ratio of their projected membership.
I have a backround of 35 years in sale and bussiness, and a sound backround in math. I didn't just off the back of the pumpkin wagon. Needless to say I did not join DirectBuy on my visit.
The best purchase is an informed purchase.
glen arm, Maryland