What are the benefits of joining a cooperative from a purchasing standpoint?
Today’s post is by Mark Davis; Vice President of Operations and CTO at SafeSourcing.
Throughout the years many industries have discovered that their smaller companies and independents can benefit greatly from cooperatives; business organizations that are owned and operated by their members for the mutual benefit of pooling their resources in a more productive manner.
As time has gone by, and more and more companies merge and consolidate into huge super-corporations, these cooperatives become even more important for their members as they try and compete with companies 10 times their size.
This week we are going to take a deeper look at some major cooperatives in different retail verticles and focus on some of the similarities and differences between them as well as some of the unique things that each is doing to provide greater purchasing power for its members.
Although there are some obvious differences between retail “co-ops” that coincide with how their industries work, there are a few items that are shared by all. We will start today by looking at some of those common advantages.
Economies of scale – One of the main reasons companies join a cooperative is to be part of an organization with the purchasing power of a large corporation, benefitting from the lower prices achieved by purchasing much higher quantities of goods than they could on their own.
Group Training/Education – In many cases smaller companies must either forego much needed training and education opportunities because of the cost or they must settle for online or webinar courses. As a cooperative, the group can easily schedule and host multiple training and education sessions throughout the year that would normally be available only to the biggest companies in that industry.
Enterprise product/service opportunities – As mentioned above, purchasing as part of a larger group can reduce the cost of things you are already buying. As a cooperative, companies also have the opportunity to purchase enterprise products and services such as enterprise software that they could never possibly have afforded on their own. With so many software companies offering Software as a Service (Saas) models, this is becoming a more important benefit of cooperatives every year.
These are just a few of the basic advantages for becoming part of a cooperative. The rest of this week we will be taking a closer look at some of the different retail industry cooperatives and what they are doing to help their members with purchasing different products and services.
For more information on the retail industry’s cooperatives or how your cost-of-goods can be positively affected by joining one, please contact a SafeSourcing Customer Service Representative.
We look forward to your comments.