The Secret is Out About the Making of DirectBuy

As Told by the Founder

Jenny Tolley, Yahoo! Contributor Network
Mar 21, 2007 "Share your voice on Yahoo! websites. Start Here."

A few months ago, I happened to catch an infomercial about DirectBuy, a shopping club that allows consumers to purchase household goods and furniture at wholesale prices. When I first saw the infomercial, I wasn't familiar with DirectBuy. But as I watched the program, I soon recalled a scary job interview experience I'd had with a company called United Consumers Club (UCC) back in 1994. I did some research and discovered that DirectBuy and UCC are in fact the same company. I wrote an article for Associated Content called "DirectBuy-is it a Ticket to the House of Style or the Poorhouse?" That article has by far been my most popular one on this Web site. It's clear that other people are interested learning more about DirectBuy and its concept.

Since I wrote my Associated Content article about DirectBuy, I stumbled across America's Best Kept Secret, by UCC founder James L. Gagan and co-written by Robert L. Shook. Gagan wrote his book in 1991, twenty years after he launched UCC, the business that would one day become DirectBuy. Having researched so much about DirectBuy and having once interviewed for a position with the company when it was UCC, I was very curious about America's Best Kept Secret, even though it was out of print. I ordered a used copy of the book online, eager to learn more about this mysterious company that, until very recently, I had pretty much forgotten.

My hardcover copy of Gagan's book arrived a couple of days ago. I soon found myself engrossed in it, learning about how Gagan launched his business in Merrillville, Indiana. Gagan writes in his introduction:

In the Autumn of 1971, I founded one of the most unusual businesses in America. My company, United Consumers Club, is unusual because it sells practically everything and it doesn't advertise. It generates hundreds of millions of dollars in sales, yet it doesn't make a profit on the sale of merchandise. Still, it has a very healthy bottom line.

In the spring of 2007, UCC, now renamed DirectBuy, is still alive and kicking, with showrooms across the country. Only it seems now that the company has decided that it's okay to advertise, hence the infomercials and official Web site. In his book, Gagan repeatedly harps on the secretive nature of his business, celebrating the fact that, at least when this book was published in 1991, it kept a low profile.

America's Best Kept Secret is apparently Gagan's tribute to his own self-professed genius. Gagan comes across as a real scrapper, proudly proclaiming that he grew up poor and never even had the benefit of a high school diploma, yet he built his business though hands on learning and trial and error. He warns would-be entrepreneurs that the business world is extremely competitive and full of risks; yet despite the secretive nature of what eventually would become DirectBuy, Gagan states that he's happy to share the secrets of his success with readers.

For those who are unfamiliar with the concept of DirectBuy, here's a simple explanation. Gagan realized that retail furniture dealers were selling their products at an enormous markup. Even when they discounted their prices, they were making plenty of money. Gagan's idea was to form a club that would allow consumers to cut the middle man out of the process. The club would sell name brand items at cost, plus shipping and handling. Gagan would charge members fees to join the club plus annual dues. He would not make a profit on the purchases members made; instead, he'd make money from membership fees. Potential members would be given a tour of the showroom and asked to make a decision about joining right after the tour. Those who declined to join would not be allowed to take advantage of the offer again for at least seven years.

I have to admit that had I read this book having never heard of UCC or DirectBuy, I might have come away from it with a positive impression. The book is well-written and very interesting. Moreover, Gagan's tone is very authoritative. He sounds like he knows his subject. However, because I know something about the company, I was a bit biased when I started reading America's Best Kept Secret. I came away from my UCC job interview thinking that the company was a scam. Years later, I did some research and found a lot of negative stories from disgruntled club members. And to top it all off, in his book, Gagan comes across as arrogant. In fact, Gagan's tone in this book reminds me of the haughty attitude I got from the UCC franchise owner who initially introduced me to this company.

It's interesting to read America's Best Kept Secret sixteen years after it was originally published. Gagan repeatedly states that part of the secret to his success was that he didn't advertise his club. Obviously, the company has changed its mind about advertising, since I frequently see DirectBuy's infomercials on TV. Gagan also states that he doesn't make money off of purchases. However, according to my research, there are hefty shipping and handling fees charged to every order and the orders are often slow in coming. In fact, througout this book, Gagan even addresses some of the complaints I've read about recently. Remember, America's Best Kept Secret was published in 1991. Evidently, there were problems back then that still haven't been addressed sixteen years later.

I think this book is worthwhile reading for anyone who is interested in learning more about DirectBuy. Unfortunately, this book may eventually be hard to find since it's out of print. On the other hand, I paid 35 cents plus shipping and handling for my copy. If those DirectBuy infomercials have you wondering what the company is all about, I encourage you to seek out America's Best Kept Secret to get some of the scoop straight from the horse's mouth.

Published by Jenny Tolley

I'm a trained public health social worker and proud Army wife. View profile