Discount club membership
Hey Mike and Vicki, just wanted to get your thoughts on buying a discount club membership. The membership fee is steep, but the savings are supposed to be pretty good. Those who have used it say they've saved many times the club membership fee. What do you say?
-----Response from Vicki:
Hi, Lynn. Thanks for asking. There are numerous discount clubs, club memberships and networks to choose from. We
don't presume to speak for all of them, but we will ask some questions as a means of providing some general guidance that will hopefully help you decide if "investing" in one is a good use of your money.
Is the membership for a "brick and mortar" business or an online business only? With the former, you can actually go and see the place and see the merchandise or service being rendered. With the latter, you have to judge by what you see on the website only. If you have to go to a store, is the store near you and are you able to go there as often as you want to make the purchases you want?
Is the discount club being run by somebody whom you know or has identified himself/herself/themselves? Too many online businesses are being run anonymously. One reason why no one puts his/her/their name(s) on the line is because they have something to hide. People who have something legitimate to offer will not hide behind a cloak of anonymity.
We once thought of buying an e-book on a topic that interested us. However, in looking at the website, we noticed that not once did the author identify himself/herself or provide any credentials. Oh, sure, there were supposed testimonies and a "guarantee" of satisfaction, but no one put his/her name and reputation on the line. Reputable dealers will identify themselves.
How long has the discount club been in existence? What makes it better than other discount clubs? Evaluate these things for yourself.
What companies does the club do business with or have contracted discounts from? Are they top-rated companies or fly-by-night outfits? Are the companies and their products or services even identified up front?
Let's say that you could save money on tires through your discount club. Which companies has the club got contracts with? Can you buy the tires of your choice or do you have to pick only from selected options? Look in advance.
Beware of submitting your personally identifiable information into a form of a site that conceals important information until you ask. Look for secure server settings whenever sensitive info is required.
Are the products or services (or both) the kinds of things that you would normally buy and buy regularly? For example, if you could save $2,000 a year on organic food in a year -- but you're not an organic food devotee -- then the price of a membership in that club might not be worth it.
Have you calculated your ROI (return on investment)? For example, if you paid, say, a $2,000 membership fee and were promised a 10% savings on all of your purchases, in order just to recoup your fee -- with no net savings -- you would have to buy $20,000 in products or services. Is this something that you want to do?
Who else do you know who is using the discount club and what are they saving money on? Don't be afraid to look for testimonials from real people, preferably people you know. Evaluate so-called testimonials from people whose names are abbreviated to initials only. Word-of-mouth referrals work wonders.
What do online reviews of the company/product/service say? Are the reviews positive, negative or non-existent? Many a company has hyped the benefits of its products without independent testing. What do real consumers say?
Can you get the discount on products or services somewhere else for free or for less money? For example, are there promo codes online, are coupons available or are there specials that are run on a regular basis that would net you the same savings on purchases, but save you the cost of the membership fee?
Will you be required to put any items on an "auto-ship" or "auto-buy" basis to lock in a price? Is there any flexibility regarding when the next shipment of product will be? Beware of being forced into a prolonged contract.
Is the "club" really an MLM (multi-level marketing) scheme in disguise? Some clubs take the membership fees of newcomers to pay the "affiliate(s)" in their "upstream" and then let them sit. There is no "after the sale" follow-up to help them make the most of their membership. Evaluate the legitimacy of the "group buying power" tag line that some discount clubs may use to convince folks to become new members.
Related to #10 above, is your interest in the discount club membership really motivated by the potential money you can make from selling memberships to others -- but only after you become a member yourself? If there was no seeming promise of income, would you ordinarily spend that much money on a membership or the products/services you can buy through them? Would you be interested enough in the discounts -- or are they of sufficiently high enough quality -- that you would want the discounts apart from whatever income you could generate from them?
Is any pressure whatsoever being put on you to buy the discount club membership now or before a certain date? This can be a very big red flag. Consider the end from the beginning. What would have to happen to make you have "buyer's remorse" after the fact? Do not compromise your standards regarding how you handle money.
These questions are designed to help you evaluate for yourself if a discount club membership is worth the money. If you spend the money, where in your budget
are you going put the expense?
Consider, too, how many miles you will have to run (or hours you will have to work) to pay for the discount club membership. Is it worth a week (or two or three or four or whatever) of work to pay for it?
We hope these are helpful to you.
We wish you safe travels and lots of money saving opportunities on the road.