Hardknock

Has anyone even been to one of these Direct Buy places? i've seen their informercial and I'm thinking of going to one of their open houses just to check it out to see if they're full of it or not. I'd like to get opinions from TFP'ers who may be members. Thanks.

Rodney

Well, you asked for someone who's a member, and I'm not. But I visited the website, and I can tell you what they're doing. And why it's not particularly exciting, unless their prices _are_ low.

Basically, they're a catalog showroom with a _lot_ of catalogs. You go in talk to salespeople about what you want, and they steer you to the right catalogs. There might be some showroom examples around, but not many; and there is _no_ stock on hand, no company warehouse. You pick what you want, and they order it. You may pick something without physically seeing it at all, though in the case of upholstery fabric, flooring, etc, they probably have the sample books.

This is actually not a lot different than how a lot of high-end furnishing stores do business. Sure, they have stock on hand, and a giant showroom of furniture or whatever than you can try out. Thing is, about half the time people don't buy off the floor; if you want a couch in a particular fabric -- sample books are available -- the retailer will order the couch in the fabric you want, and it will be shipped directly from the manufacturer. Countertops, kitchen cabinets: at specialty stores, these things are _always_ ordered from the manufacturer with color, wood, etc. specified. But there are always showroom models for you to look at.

So Direct Buy's business model isn't really anything new.. The only difference is that that is _all_ they do. They sell _no_ stock directly, have _no_ huge showroom of finished goods, carry no inventory. This would save them money because of 1) smaller retail space, 2) no need to actually buy inventory, or store it, or transport it, 3) no need to clear inventory at low prices if it doesn't sell.

As for how they negotiate lower prices with manufacturers, it's probably because they always pay cash up front to suppliers instead of net/30 or net/60. Why not? They're just passing your cash straight to the supplier for the item you want. Every order is a special order, and those are _always_ paid up front. If they can promise a company a good volume of such orders, they might get a decent discount. And since DirectBuy is operating on a very low overhead model, there's plenty of room for them to make a profit.

What's the downside? Well, unless the service _is_ real good, you might end up picking something that you're actually no so happy with when the physical object actually arrives. And if you order, say, a couch, you will probably end up making your decision based on a picture of a couch rather than the counch itself. When buying furniture, fabrics, anything you touch or put your weight on, there's no substitute for actually seeing the stuff. So, Direct Buy may be a good way to chose some things, maybe not the best way to choose other things. Also, you want to check how long things take to arrive, and what the return policy is.

In short, they're not necessarily full of it, but there are downsides to this way of buying. Unless of course you absolutely already know what you want and just use DB to place the order at a good price.