Remember that great scene in Miracle On 34th Street where William Frawley tells the judge what will happen if he proclaims that there is no Santa? Think of that as you read this.
Let us put their sales tactics and fine print to the side and think about some bottom line. As memory serves the DirectBuy pitch eludes to the fact that their operational expenses are pain by the membership fee. In this area it is $5,000 to join. Even with that figure perhaps it might fun to do a little basic arithmetic.
First, you get to pay the prices that the stores pay. Maybe so, but many manufacturers use different price structures that they use based on a stores volume.
The DirectBuy showrooms are in well appointed and decorated facilities, They can house several room displays, product samples, shelving for the many catalogs, meeting room, children's area, customer service area, kitchen design area, offices for the owners and membership directors, a telephone sales room and a break room. Ever wonder what the rent might be?
There is the cost of the basic utilities and technology such as the computers and telephone systems. Oh, and let us not forget the cleaning service.
Salaried, commission or hourly all of the people who work there get paid.
And, the executives and employees on the corporate side... They get paid too.
Advertising: It is likely that your local "club" pays into that pool.
Infomercials: Writing, Production and post production costs, royalties and residuals
(if any), and the simple fact that they don't get on television for free.
That goes for airtime on radio too.
Print: Newspapers, magazines... Costs for writing copy and layout. The price for
individual publications and ad size and distribution will vary but it is
a needed expense and DirectBuy does allot of it. Even the printed
material and your free visitors pass isn't really free. Oops I almost
forgot the postage.
Computer Ads: While less expensive than more traditional forms it still costs.
So do the web designers. Then there is a matter of the proliferation of
all those new websites that are declaring the great benefits of joining
DirectBuy. All so positive... Real or not someone maintains them.
Had enough logistics? OK so here is the mythical math question to consider and think about. How many new "memberships" does it take to maintain all of the above on a local level? To my mind this subtraction doesn't add up. What do you think?