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Front Page » May 30, 2002 » The Business Journal » Joining forces in a "co-op" increases buying power
Published 4,878 days ago

Joining forces in a "co-op" increases buying power

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Chamber executive director

As individual buyers we all spend a lot of time comparing costs, looking through flyers for special deals, and keeping track of bargains or manufacturers "special purchase" offers. Everyone knows that buying in bulk gets you the best possible prices, but most often some businesses finds it prohibitive to buy in such large quantities, that buying in bulk just isn't an option.

But, by joining forces with other consumers and consolidating their buying power, buying in bulk becomes very affordable and manageable. More business owners are looking into the power of "cooperative buying", more commonly known as a "Co-Op". A cooperative is a business that runs like any other business, yet has many unique aspects.

First of all, the co-op belongs to the folks who use it - those business owners who have joined together to provide themselves with the products needed for their business. Exclusively serving the needs of it's membership. Generally, the member-owners share equally in the control of their organization - they may meet regularly, elect directors or advisory boards from among themselves, and even hire people to manage the day-to-day affairs of the organization.

In any case, members are expected to invest in shares in the business in order to provide capital for the operation. This is usually accomplished through imposing an initial membership fee to join the organization, and then an annual fee thereafter to remain a member. In addition to the obvious benefit of having greater buying power, all net savings left after expenses are traditionally returned to members, either in the form of greater discounts on purchases, or annual cash pay-outs in the form of dividends or both.

Currently, there are more than 47,000 member co-ops registered in the United States with a combined membership of more than 100 million people. Almost any consumer need can be met by a cooperative. Although legal documentation requirements vary, incorporation as a co-op is usually not difficult, and can result in huge savings in time and money for its members.

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May 30, 2002
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