What is a CO-OP
What is a CO-OP
What is a Cooperative
A cooperative is a form of business designed to provide economic benefits to member owners as opposed to investors. They are owned and controlled by the members who use their services. Cooperative's differ from commercially owned business's in three ways:
- Member Owner Control
- Focus on Member Owner Needs
- Profits Shared with Member Owners
Member Owner Control
The people who use the cooperative own the cooperative. These are the people who profit from the business's earnings. They also elect a board of directors to oversee the cooperatives operations.
Focus on Member Owner Needs
The cooperative strives to meet custermer needs while providing economic benefit to member owners and generating profits to sustain long term development and growth. By pooling the buying power of the member owners the cooperative is able to purchase products in bulk to sell to custermers at a reduced cost.
Profits shared with Member Owners
Farm supply cooperatives share profits through patronage payments. In profitable years the cooperative pays patronage in a combination of cash and equity in the cooperative.
