A wholesale co-op is an cooperative
arrangement between members to
act together for the betterment
of each other.
You might be familiar with co-op apartments,
which are basically buildings owned
by the apartment owners.
There are co-ops in the food business,
in the farming business, in the produce
business, in the garment business,
and in many other industries.
Some of these cooperative arrangements
are informal, but they all seek to
accomplish the same goal.
The idea behind a co-op is to benefit from
the leverage that is created when individual
members come together.
Just like an army benefits from the
cumulative efforts of its individual soldiers,
a co-op benefits from the cumulative
efforts and resources of its participants.
Without realizing it you might already
be purchasing or selling products
to people and business that are
part of a cooperative entity.
A wholesale co-op is an organization that would
consist of either wholesale buyers or sellers,
or even a combination of both wholesalers
and wholesale buyers.
The goal would be for the co-op organization
to enable wholesalers to reach more
customers through the collective marketing
power of a co-op, or to help buyers
obtain lower wholesale price through the
collective buying power of the co-op.
By being part of a co-op a member can
also benefit by being perceived in a more
Imagine if a small boutique located
in a small town approached
a top designer to set up a
a wholesale account with her.
The designer might not be
willing to supply a small boutique
since she only wants to deal with
large retailers who can buy
a lot more of her fashions
than a small retailer can.
But if the same boutique
is part of a retailer co-op
the designer might pay a lot
more attention to it.
The reason is because the designer
will realize that if she starts supplying
that small boutique, then many members
of the retail co-op might also
start buying from her.
Or perhaps the retail co-op itself
will purchase her wholesale fashions
on behalf of all of the retailers
in its database.
Wholesalers can also benefit from
being part of cooperatives because
they will have the opportunity to
reach more stores
than they could on their own.
If you are a wholesaler with a small
marketing budget you might only
be able to attract a hundred
customers a month.
As an individual wholesaler
you might only have the budget to
place a small advertisement in
a wholesale directory.
But if you join forces with other wholesalers,
the combined marketing budget that you will
all have now can bring you many more
Since every wholesaler in the co-op
is contributing to the marketing budget of
the organization, the cooperative
can place larger advertisements
in more wholesale directories.
The wholesale co-op can use its
marketing budget to attract thousands
of prospective customers to one
central website. Thar central website
would then display the closeout
products that its members have
A shopping mall is a great example of a
retail co-op. Each tenant is charged rent,
and part of that rent is used by the mall's management
to attract shoppers to the shopping mall.
The total advertising budget available to
the shopping mall is exponentially higher
than that of the budget of the smaller individual
Retailers rent spaces in shopping malls
because they want to benefit
from all of the shoppers that will
Yes, the retailers will be faced with more
competition, but they will also
have the opportunity to make more sales
than if they rented a commercial space
in an area with less foot traffic.
A wholesale co-op can pool the marketing budgets
of all the wholesale members and do substantially more
advertising than each wholesaler could do on its own.
The same concept can apply to a co-op for wholesale
The aim of the co-op would be to obtain lower
wholesale prices by placing much larger
orders from wholesalers for its members
than each wholesale buyer could on his own.
For example, let's say that a boutique in
Trinidad can purchase 50 brand name
dresses a month from my closeout business.
Based on that quantity I would give the
boutique owner a wholesale price of
19.99 per dress.
But if 10 boutiques placed an order together,
and they purchased a total of
500 dresses, I would sell the
dresses at a much lower
In other words, wholesale buyers
can benefit from their collective
bargaining power when they
set up an organization that does
all of their buying on their behalf.
So how do you form
a wholesale co-op?
You can start contacting local wholesalers
and retailers in your area. You will
want to contact retailers
that are in the same type of
business that you are in.
The retailers don't have to
buy the same exact styles
that you do, but they should be
looking for the same products.
For instance, if your boutique
purchases designer ball gown dresses,
you can form a group consisting of
retailers that sell brand name party
dresses and fashion office dresses.
By focusing on businesses
that are looking to purchase
similar types of products
you can benefit from aggregating orders.
You would use the same approach
if you are looking to set up a co-op
for wholesale suppliers.
The only difference is that
you can focus on wholesalers
that either sell the same or different
types of products.
The reason why you can have suppliers
of different types of products is because
wholesale buyers might be looking
for a wide range of different types
In other words a retail store
might be looking to purchase
unrelated items such as
shoes, handbags, and scarves.
You would want your supplier cooperative
to have as many different types
of products as possible so that you
can attract a wide range of retailers.
Also the more products that you offer,
the better of a chance that you have in
attracting stores to the website of the group.
When you set up your co-op
you can charge a membership fee,
or simply focus on the benefits
that come from being part of
Instead of forming your own
wholesale co-op you can
also join an already existing
group. Just make sure
that it offers the type of
benefits that you are looking for.