*Disclosure: This article is an advertorial which was paid for by DirectBuy.
With absolutely no hidden retail markup paid by its members, DirectBuy is looking to enhance its Canadian operations to support the company’s desire to grow and innovate in 2015. Instead of adding a profit margin to its vast offerings, DirectBuy makes its money primarily through membership fees that give consumers the ability to shop directly from hundreds of manufacturers and their authorized suppliers. DirectBuy is looking to grow its presence in Canada by offering an expanded assortment of products and services, as well as offering exceptional before and after purchase customer service. We spoke with DirectBuy's CEO Mike Bornhorst.
"Membership has its privileges" as some say, and in this case DirectBuy can offer substantial savings, especially to those building, renovating and furnishing their homes. Products such as kitchen cabinets, flooring, high-end appliances, TV's and audio equipment, furniture and mattresses have substantial markups, especially in Canada. As DirectBuy grows in popularity in Canada, it could seriously gain market share from profit margin-reliant competitors.
In order to shop through DirectBuy, members pay an initial membership fee, followed by marginal membership renewal fees thereafter. DirectBuy also has 12 brick-and-mortar locations in Canada, though for convenience sake many members choose to shop online through the company’s e-commerce site, members.directbuy.com. In order to facilitate online sales, we're told that DirectBuy has significantly increased its customer service offerings, both with making purchases and with after-sales service. A team of decorators and customer service representatives are on hand to assist members with making purchases and post-purchase customer service is also provided.
Last year, DirectBuy surveyed members to improve its business. What it learned is that members wanted more comprehensive customer service. DirectBuy responded by providing a new customer service team that is available during expanded hours and is trained to help members both before and after purchase. This Member Care Advocacy Team, as the company calls it, is supported by a team of product and design experts who work with members to coordinate designing kitchens, picking colours, and putting together living rooms, for example. DirectBuy gets over 80,000 calls per year now, and the company says member feedback is positive.
Members also asked for a more convenient e-commerce website. DirectBuy responded by investing over $1 million in improvements to its website, such as faster speed and enhanced search capabilities. The website also features a built-in algorithm where products offering members the most savings are shown first. Again, because DirectBuy charges a membership fee and doesn't include hidden retail mark up in its products, it isn't motivated by margins or volume sales.
DirectBuy is looking to grow its membership presence substantially in Canada, as well as vastly expand its product offerings. It already boasts about 1 million SKU's (stock keeping units), versus about 75,000 for an average Walmart Supercentre. Currently focused on home-related products in Canada, DirectBuy is looking to expand into travel, home alarm systems, and possibly even apparel and luxury goods. As many of DirectBuy's members are value-conscious upper-income Canadians, savings on travel and luxury purchases could also be very substantial.
In addition to the low prices members have access to every day, DirectBuy also works with vendors to offer limited-time price reductions called 'Club Exclusives'. These Club Exclusives arrive via email multiple times per work and offer specials on items such as big screen TVs, leather furniture, vacuum cleaners and appliances, and many others.
For those unfamiliar, DirectBuy was founded in 1971 in Indiana, and entered the Canadian market in 1996. It sells products for in and around the home to members with no hidden retail markup.
*Note: This article is an advertorial which was paid for by DirectBuy.