Top 7 Steps In Forming A Buyer's Co-op

As an individual buyer, you probably spend a lot of time comparing costs, looking through flyers for special deals, and keeping track of bargains or manufacturer's "special purchase" offers. Everyone knows that buying in bulk gets you the best possible prices, but most often one individual or business finds it prohibitive to buy in bulk.

But by joining forces with other consumers and consolidating your buying power, buying in bulk becomes very affordable and manageable. More and more business people are looking into the power of "cooperative" buying - in short, forming a "co-op."

A cooperative is a business that's run like any other business, yet it has several unique aspects as well.

First of all, it belongs to the folks who use it - those who have joined together to provide themselves with whatever it is they need. In other words, the "raison d'être" for a co-op is to serve the needs of its members.

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.

Some of the steps involved in forming a co-op include:

1. Contacting like-minded persons to discuss the need that forming a cooperative might meet.
   
   
2. Hold a meeting, and appoint a steering or advisory committee.
   
   
3. Once the advisory committee has completed a survey or needs analysis, a vote can be taken on whether to proceed.
   
   
4. Develop a business plan, and draw up the necessary legal papers to incorporate.
   
   
5. Hold a meeting of all potential charter members to adopt the by-laws and elect a board of directors. Assign responsibilities to implement the business plan.
   
   
6. Conduct a membership drive and acquire facilities, if necessary.
   
   
7. With the power of numbers, approaches can be made to retail operations for member discounts.
   
   There are more than 47,000 member co-ops registered in the U.S., with a combined membership of more than 100 million people. Almost any consumer need can be met by a cooperative. Although legal documentation requirements may vary from state to state, 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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