How To Save Money With
By James Harvey Stout, former Writer For BarterNews
Cooperative food-buying is a form of
bartering. We are trading our labor for the extra food which
we get for our money. This chapter explores some of the
basics of co-op buying; before investing your time and money
in the project, you might want to acquire more information
from the books which have been written on the subject.
We can get members for the club. A few
- We can
begin with people whom we know: friends, neighbors,
relatives, and people from our office, church, club, or
- We can
put an ad into a newspaper or onto some bulletin boards:
"Food-buying club is being formed. Save money by
purchasing food in bulk with other people. Call xxx-xxxx."
- We can
start small, while we work out the details of pricing
and distribution. With this limited membership, there
will be a smaller bulk of food to transport, fewer
questions to answer, and less pressure on us.
- We can
be selective in our choice of members. Perhaps during a
"trial membership," people will have a chance to prove
that they are willing to do the work.
We can prepare for the first meeting.
with the prospective members to learn about their
expectations and experience. If we know their
expectations, we will be ready for their questions. And
if we know about their experience with other buying
clubs, we will be able to get their advice regarding
information regarding the availability and price of food
from various wholesalers. Combine those lists into one
list, to use at your first meeting. Even though one
wholesaler might have better prices overall, the other
distributors might have some of the additional products
which are needed. We can buy goods from more than one
Investigate the possibility of offering non-food items.
In addition to food, we might buy bulk quantities of
other goods: paper towels, bathroom tissues, motor oil,
pet food, disposable diapers, paper napkins, light
bulbs, detergent, etc.
Consider the other issues that are presented in this
chapter, including the logistics of getting and
distributing the goods.
The first meeting.
Explain the benefit: the members will get more
food-per-dollar. At this point, we might not have exact
figures, but we can offer estimates.
Explain the members' responsibilities
Explain the costs and fees. There might be an initial
membership fee of $l to $25 per person or per household.
(Most clubs charge a fee.)
each member a list of the goods which will be available
from the wholesalers. We probably won't be ready to take
orders at this time; the purpose of the list is just to
let people indicate which products they use regularly,
and the amount which they use. (One co-op
director said that his list started with 30 items, and
then grew to 70 items.) Most people would have
difficulty in estimating the amount of food which their
family consumes in a week, so we can let everyone take
the list home, where they will make a note of the amount
which is consumed at each meal for one week.
Make a list of goods which will be
available. After the members return their lists (indicating
the types and amounts of food which they use), we can
compile these lists to see which goods should be available
through the club. Consider these ideas:
simplify the process in the beginning, we might offer
only the things which are most commonly used: bread,
eggs, milk, and particular fruits and vegetables.
need to order goods in a large quantity so that we will
gain a wholesale discount; obviously, there is no sense
in ordering an amount that is too small to qualify for
that discount. Some further considerations:
the members don't require a large quantity on a
regular basis, we might still get a wholesale price
if we "stock up" -- buying a month's supply
of non-perishable goods, even though our club takes
orders on a weekly basis.
Even at wholesale, some goods will not be
worthwhile; for example, on a purchase of 10 dozen
eggs, the wholesale price might be only 2 cents per
dozen below a store's price.
can combine our order with the order of other co-op
buying clubs. That strategy can quickly double or
triple the size of our purchase, so we will qualify
for a larger discount.
we create a list of goods which will be offered, we can
change and expand this list when we get new members who
want other items.
create an order form which will let the members indicate
the goods which they want for the subsequent week. The
form will list the goods, the prices, and the dates when
the goods will be available. Members can get a new form
each week when they get their goods, or they could
receive the form in a weekly newsletter. The club will
probably ask the members to pay in advance, when they
submit their weekly order.
Consider these issues in pricing.
need to include all expenses: the good themselves,
transportation costs for the car or truck which will
pickup the goods, business expenses (e.g., photocopies,
phone bill, etc.), taxes, special expenses (e.g., a
butcher, when we buy bulk cuts of meat).
might have different markups, depending upon these
The amount of work which is contributed. At one
co-op, the members pay 10 percent above cost;
nonmembers pay 25 percent above cost (but even at
that price, they might save money). The workers who
donate at least five hours per week pay one percent
above cost. (As the director, we might even get our
share of the groceries for free, if the club is
large enough to absorb that cost. ) At another
co-op, there is a monthly obligation of four hours
of work for all of the adults even if they don't
order food each week.
The markup for a particular product. If our
wholesaler sells tomatoes to us at only 10 percent
below the store price, it's not fair to sell those
tomatoes to nonmembers at our standard 25 percent
The size of the bulk. When we get more members, we
can buy a bigger quantity of food each week. This
might give us a larger bulk discount, which can be
passed along to the members.
small markup can be included to cover any shortages,
losses, spoiled food, unexpected price increases,
and other problems.
We will find a supplier. We can get
the goods from various sources:
Wholesalers. In a phone book, the companies might be
listed under a category such as Poultry; Wholesale,
Grocers; Wholesale, Dairy Products Brokers; Food
Brokers; or Natural Foods. To find more wholesalers,
visit other co-ops, and schools, hotels, restaurants,
grocery stores, and other places which sell or serve
food, to ask for the names of the distributors who
provide their food.
Farmer's markets. These informal events allow farmers
and gardeners to sell their produce directly to
Some small farmers will allow us to buy produce directly
from them at their farm, or from their roadside stand.
We might contact other farmers by putting notices onto
bulletin boards, to indicate our interest in buying
produce for our club.
newspaper's classified ads. In a category such as
"Foods," we might find an ad like this one from a
big-city newspaper: "Potatoes. 50 lb. bags, $3. Will
deliver in tons and lots.... "
Individual gardeners. Perhaps a friend or acquaintance
has a large garden which can supply produce.
We will make an agreement with the
supplier. The agreement can cover these issues:
is the smallest bulk order which is required?
- Do the
orders have to be place in advance? How much time is
the orders be phoned in?
the orders be prepaid? Is a deposit required?
is the distributor's policy regarding the acceptance of
cash, checks, manufacturers' coupons, or food stamps?
the supplier deliver food? Is there a delivery charge?
are the days and hours when the supplier is open for
can we return damaged or poor-quality food? Will the
supplier give us a refund (or future credit) on that
food? Can we give those unusable goods to the delivery
will we know about any price changes and new items?
We will find a place where the food
can be distributed. In a small food-buying club, we might
distribute the goods from a member's garage or empty room;
in exchange for providing this space, the person will
receive an extra discount on food. The distribution point
should meet these conditions:
- It is
on ground level, so that we won't have to carry crates
up or down stairs.
- It has
a refrigerator, if we will have perishable items such as
milk and yogurt. (We can barter for the refrigerator.)
- It is
large enough for the boxes and for the sorting of food.
And it has extra space, in case our club expands.
- It is
sheltered, dry, and cool.
floor is easy to clean.
- It has
a baby scale, which is more accurate than a bathroom
We will distribute the goods. After
the food has been delivered to this distribution center, the
other members will break down the food into individual
orders; they weigh the food, bag it, do the record-keeping,
clean up, or help in some other way. (An alternative is to
leave the food in the wholesaler's crates and then let the
people take whatever they have ordered, if these people can
be trusted not to take more than they have ordered).
When there is a slight shortage (and a "50-pound" bag of
rice turns out to be only 48 pounds), or a slight surplus,
we might divide the difference among the members -- but a
larger discrepancy should be reported to the distributor.
There are business opportunities in
co-op buying. Although a co-op is generally a non-profit
venture, we can find ways to earn a profit. As long as our
members are receiving a fair discount, they might not mind
contributing a few hours of work -- even if we are using
their buying power as a leverage toward our personal profit.
We can consider these possibilities:
- We can
order more than our members need, and then sell (or
barter) the surplus to neighbors and to shoppers at a
Growers Market. Since we bought the goods at wholesale,
we might earn a profit.
- We can
increase the size of the order (and the discount) and
retain the profit. For example, if the members' total
bulk quantity entitles them to a 30 percent discount,
then perhaps our personal order will raise the quantity
to the level where we are eligible for a greater
discount -- maybe 40 percent. That extra 10 percent
discount is given on all food -- ours and the members'
food, so we can pass it on to them. Or we might consider
that they are satisfied with their original 30 percent,
so the extra 10 percent on all the orders is ours. One
way to increase the size of the group's order (and
therefore the size of the discount) is to combine our
order with that of a grocery store, restaurant, or other
Instead of distributing goods only to our members, we
might distribute them to non-members and to retail
outlets (such as grocery stores, restaurants, and other
co-ops). Then we become a wholesaler, and we move up the
distribution ladder to the next level, so that we can
get the same quantities and discounts which are being
given to our current suppliers.
co-op buying club can have other activities, which could
be fund-raisers for the group, or money-makers for us.
We can sponsor lectures on subjects like nutrition,
comparison shopping, bartering, and consumer guidance.
(We can barter for the lecturers' services.)
- We can
include other goods and services. The Cooperative League
of America has said that "many people are now using
co-ops to provide housing, health services, consumer
goods and services, farm marketing and supply
facilities, funeral and memorial planning, parents'
co-op preschools, credit, electric and telephone
service, insurance, worker-owned businesses -- and
others. Included among these are co-ops in such
activities as auto repair, home repair, travel,
recreation, crafts, legal services, babysitting, bicycle
repair, laundromats, optical services, data processing,
earthworms and catfish farming, and so on. [Members]
might choose, for example, to have the co-op pool their
purchases for one or more major appliances -- or get
special rates for group attendance at a play -- or lease
a lake cottage for subletting at a savings to members --
or buy prepared food in case lots -- or purchase power
tools for scheduled member use -- or subscribe to
several magazines for circulation among members -- or
arrange group health screening tests for members -- or
purchase snow tires at quantity prices -- or dozens of
other things, on and on and on."
- In a
larger sense, the idea of co-op buying is to get other
people to pay our way in exchange for coordinating the
activity. This concept can be used in many situations,
if we find enough people to join our venture. For
instance, we might charter a bus, and then get a "free"
ride as we oversee a trip to a place of interest with a
coachload of travelers. We can get free tuition in an
aerobics class in exchange for signing up 15 other
people. We can locate 10 buyers for parcels of a real
estate development, and get one for "free."
- We can
start a co-op food store. Instead of taking
weekly orders, we would keep an ongoing inventory of
goods, and so the project changes from a part-time club
to a full-time business.