Similar to consumer cooperatives, purchasing or shared services cooperatives are owned and governed by independent business owners. The cooperative increases efficiency in purchasing supplies or providing services. Participant businesses –or members – of purchasing co-ops typically also gain access to best practices, improved insurance or financing, or even shared services like IT, marketing, transportation, rebate management, payroll, and other business activities. Purchasing co-ops are used by hospitals, independent retail stores, farm supply cooperatives, and educational institutions for cost-effective wholesale purchases.
Examples of Shared Services or Purchasing Cooperatives
Ace Hardware is the world’s largest retailer-owned hardware cooperative. Ace Hardware has over 5,000 stores around the world with the majority of those stores independently owned and operated by local entrepreneurs. Founded in 1924 by a small group of Chicago hardware store owners, Ace changed the retail landscape by allowing individual stores to purchase merchandise in bulk to save money and buy at the lowest possible price. This partnership enabled even the smaller stores to compete effectively at retail despite larger stores in their market. To this day, Ace Hardware Corporation is still owned solely and exclusively by local Ace retail entrepreneurs.
Carpet One is the largest floor covering purchasing cooperative in North America. Owned by over 1,000 independently-owned stores, cooperative members gain buying power and scale through working together.
National Co+op Grocers (NCG) is a business services cooperative for retail food co-ops located throughout the United States. NCG represents 145 food co-ops operating over 200 stores in 37 states with combined annual sales over $2.1 billion and over 1.3 million consumer-owners. NCG helps unify natural food co-ops in order to optimize operational and marketing resources, strengthen purchasing power, and ultimately offer more value to natural food co-op owners and shoppers everywhere.
CESA Purchasing is a Wisconsin statewide cooperative that works with over 100 vendors to provide contracts with discounts and other value-added benefits to K12 schools, libraries, technical colleges, universities, municipalities, and other non-profit educational entities. CESA Purchasing’s mission is to level the playing field for ALL Wisconsin schools. By negotiating contracts on behalf of all Wisconsin schools, CESA Purchasing can create contracts with discounts that benefit the smallest school as much as the largest.
Resources
Succession Planning for Purchasing Co-op and Their Members. Project Equity, 2017.
A Guide for the Development of Purchasing Cooperatives. U.S. Department of Agriculture Rural Development, 2009.
Western Areas Cities and Counties Cooperative Case Study. Funded and prepared for USDA Fund for Rural America, 1998.
Basics of Organizing a Shared-Services Cooperatives. U.S. Department of Agriculture Rural Development, 1995.