What is a Co-Op?

by Matt B

new-leafYesterday we had to go grocery shopping.  I hate grocery shopping, it is usually Sarah’s department.  Since we had almost no food in the house and she wanted me to pick out food that I would eat (I’m picky), I went with her.

I know what I like, and am usually intimidated by food that I am unfamiliar with.  Sarah, on the other hand, loves trying new foods and has been leaning organic as of late.  I like some organic food, but do not always like the price tag and the “mystery” associated with some organic products.  Instead of our usual trip to the conventional grocery store, Sarah asked that we go to our local Co-Op.  I have been there plenty of times before, and can find plenty there to eat, so I agreed to go.

What is it?

A Co-Op is a business that charges an ownership fee that makes the patron or employee a partial owner of the company.  Most of these types of businesses are local and tend to have a largely beneficial presence in the community.  Think of it as a business that anyone can buy into, and voice their opinions and ideas in a democratic process with every owner having a voice with the same “pull”.-No “majority shareholder” whose voice outweighs the “little guy”.

After a short conversation about the store itself, both of us realized that we did not fully understand how the Co-Op really works.

Instead of walking in and finding our items as we would normally do, we stopped at the information counter to find out more about the Cooperative process.  After reading over the pamphlet and speaking to the representative at the counter, here are the benefits of joining our local market’s Co-Op.

A one-time, $100 (refundable) ownership fee purchases:

  • Discounts on assorted classes and seminars-
  • Monthly “owner advantage” sales on various products in the store-
  • Discounts at participating local businesses (including health care providers)-
  • A Bi-Monthly newsletter that includes company information along with local issues of interest-
  • Coupon books issued twice a year-
  • “Patronage Rebates”-These were explained to us as a dividend check that is issued based upon how much is spent by the owner AND overall store performance.
  • Last year, our store locally underwent an expensive remodel.  From what we were told by the representative, this made the “Patronage Rebate” rewards far less than in the past.  What that number is in relation to the $100 ownership purchase price is anyone’s guess.

    Is it Worth it?

    I love the idea of a Co-OP, but in this case, I do not believe we would shop there enough to warrant the $100 price tag.  I realize that everyone needs food, but going organic is not cheap.  Product prices are the biggest issue I have with our Co-Op and makes me believe that a membership club or the regular supermarket is a more sound option for consumables.  As for other Co-Op business options, I would definitely consider buying into them.

    I would not be surprised to see a rise in cooperatively owned business in the future.  The layout of the business plan and the sense of community and benefits are enticing to potential owners.

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