Power in numbers !

[1shotwade]

I just gott'a throw this out there.The longer I am on this site the more people from this area I see here on HT. That's a good thing.I'm thinking with so many people on HT we could surely find a way to make major purchases of commonly used items at a great discount and find a way to distribute them to different areas.
I couldn't count the threads I have seen about where to get the best prices on canning supplies and equipment.And this isn't a hit or miss kind of thing.It's not a seasonal kind of thing.Seems no matter what season or time of year,someone is looking for where to buy this stuff 'cause it's just too expensive to begin with.

A few years back my brother and I raised sorghum and made molasses. At that time he had a neighbor that canned jams and jellies and bought pint jars by the semi load. He sold us pint jars with lids at his cost including shipping for $2.50 per dozen.Now I don't remember what they were going for locally but do remember that was well under half price.He has since moved out of the area so we have lost access to such a great deal.
I'm not knowledgeable in things like this but I have never asked a question on here that didn't get an answer. I know some of you out there know how to do this. Please respond to this to at least voice your opinion on the subject.The feasibility of doing something like this, Pros-cons etc. Anything you might want to add.

Thanks

Wade

[||Downhome||]

Lot of options on Food with co-ops and Amish warehouses.
Though most Companies that sell other wares wholesale want a Tax number and letter head.
Reason is they do not want to hold the bag on sales tax or undermine merchants sale base.

[1shotwade]

Establishing a business here in Indiana doesn't take that much. I did it back in 96 for $25,maybe it has changed by now. I would think a person could start something like a "buyers Club" without a lot of expense and/or red tape. Don't know but that's what I hope this thread will reveal. There is such a vast range of knowledge on this site I an convinced it could be done.

Wade

[painterswife]

A buyers club, would be a business .

Sales tax reports, shipping, irs reports. Someone ends up doing the work and paying the cost.

[1shotwade]

This is true,but does not have to be a major undertaking. The sales tax is reported monthly and the income to the IRS is quarterly.For anyone that has kept business records previously and only handing one item would take less than 8 hours a year. I was working with wild rabbits for beagle clubs and had to have a permit to enclose wildlife and the whole paperwork thing took about 8 hours a year.Of course that also included recording all expenses and sales in journal form.It really involves the same amount of time we all should be doing in our normal homesteading lives.

Wade

[Dixie Bee Acres]

When I ran a shop, my business license was $25, that got my retail tax id number and EID.
This was from 2003-2009. My business was small enough and a sole proprietor, owner/operator type business so I only had to file once a year.
It can be as simple as keep track of all sales, keep track of all expendetures, and collect sales tax on all taxable items, then pay that tax to the state by the end of January each year.
You can over complicate it by taking deductions for office space in the house, storage space in the barn, etc.
I would think, this is just my opinion, but to start something as you are suggesting, would be to license it as a private, members only, non profit. If that's possible.
Meaning you have to be a member to buy. Then don't keep inventory. Put together orders of one or two items at a time, all the members put in their orders and once the orders hit the size required, place the order, everyone picks up their items, then move on to the next item to be ordered.

[wally]

Interesting concept. Perhaps out there somewhere there is a members who could do something like this as a compensated position on their home stead. Like a drop and ship to who ordered.members

[1shotwade]

DBA- We must be drinking from the same well. That is exactly what I was thinking!I know it could be done on a much bigger scale ai. nationwide , but I was thinking say someone who is centrally located that could receive a shipment. You would know in advance and notify everyone that they should be there at 11am on thursday to" pick up their goods".The person would have to have room to store some for people that couldn't get there at that time but if paid for in advance,they would eventually show so you wouldn't get hurt but no pay- no shows. I think it would work. I know I'd drive to Indy for a good deal on canning jars and we all communicate together here on the form now so it wouldn't be a big deal contacting others with that interest.

Wade

[Marilyn]

Count me in, Wade. Would we absolutely have to make it a business? It would be so much simpler if we could keep it similar to a neighbor simply selling his excess to another neighbor...

[1shotwade]

Originally Posted by Marilyn

Count me in, Wade. Would we absolutely have to make it a business? It would be so much simpler if we could keep it similar to a neighbor simply selling his excess to another neighbor...

I agree! Hopefully this thread will "tickle" someone's ears here on HT 'cause I know someone here already knows the answer to this. It's just a matter of the right person reading this and being interested in pursuing it further.

How about it y'all?

Wade

[Ziptie]

The only thing I would be real thoughtful on is how to collect money and getting people to pick up their stuff.

People really like the stuff and want to order it,they sign up, but when it is time to collect the money well...Did I did up for that???
Then you finally get the money from them and the stuff comes in. You are waiting weeks on end for them to come get.

Also, have had people want to go together to get stuff at the produce auction. Ask at the beginning of the auction what they want. Oh, well I am interested in this and that but no tomatoes. Ok, fine I bid on a lot of tomatoes that I know I would use all of them. Then I get a good deal on them they come back and say..yah I think I will take several cases of those tomatoes.

As you can tell I have had not a lot of luck working with people.

[Muleman]

I am going to be the bad guy in this conversation, the devils advocate if you will, but I will tell you what I have seen in things like this. Some one says, buying retail is too expensive, lets get together and purchase directly and "share" the rewards of buying at a better price. Sounds great, and can be done.

Several people get together and decide to "go in partners". Here is where the problems start to arise. "Hey I found a good price on XX", ok great, "Hey can you use your truck to go get it, I don't have one, I will pitch in for the gas" so far so good. Then you need new tires on your truck? everyone has been paying for the gas and sharing the immediate expenses, but no one is going to buy new tires for your truck. That is just one example of issues this type of arrangement creates.

Maybe one person is using their CC to make the purchase, who pays the interest, who pays the late fee when a member or two is late with reimbursement? Who gets all the reward points? These issues create conflict.

Ok, the financial side is all figured out, we just need a drop off point, a storage area. You have a big barn and trucks can get in, lets leave it all at your place. No problem. You use your barn as storage. Eventually you get tired of hearing how everyone else is turning their extra storage space into a shop, or a new chicken coop, etc. Meanwhile you can not use yours because it is full of everybody's stuff.

I am not saying this can not be done. I am just saying there are many things to work out ahead of time, it is not as simple as, there is something cheap, lets all buy it and split it up and save money. Normally somebody has to administer the deal, that means they are doing more than the others.

This is the reason businesses in the supply business charge more than what they give for something. No one expects to work for free. Setting up and running a co-op, which is exactly what everyone is talking about here, is a lot of work and takes an ongoing effort. The person doing this work will expect payment and rightfully so. I am not saying a co-op will not work, they do, but it takes a lot of time and effort to actually set one up and get one off the ground, for that effort a person should rightfully expect a reward, because they are also taking a lot of risk.

Would a HT co-op be something I was interested in, absolutely. Do I have the time to set one up? No. If someone here does, that would be great. However, for it to work the person needs to look at it as a business. They need to be willing to take on some financial risk setting it up and also plan to put in a lot of time and effort to get all the info. and documentation needed to make it work. The members would need to understand it is not a share and share alike deal. The person running the co-op would be making money from it, the members would be getting some benefit, but not without a cost. Not without paying the administrator a decent wage for all the work they do. In the end this is what every place you are buying from now is doing. A supply company takes the risk of building inventory, makes some money for their time and effort and supplies you with the product you want at a markup to cover those cost and expenses and make a profit.

Also understand in a co-op, unlike how you are making purchase now, the members have a responsibility to make a certain amount of purchases. The co-op administrator has no interest in building inventory and filling a warehouse. In order to be cost effective, if there is 100,000 jars in a truckload shipment, that load has to be divided and distributed among the members, and whether you need your share of 100,000 jars or not, you will be obligated to do your part and pay your share, otherwise it is not a true co-op, you are just buying what you want when you want from a store.

[Muleman]

Sorry, I think my above post did not actually lay out a successful plan. Or a possible successful plan, to be more accurate.


Here is how this could work. Someone here on HT who has the time and financial resources to start a HT co-op. That is the first Criteria. Are you interested in starting a new business (this would be a full time business, if successful) Do you have the financial resources for such a venture. I do not think a meaningful co-op could get off the ground for less than several thousand dollars at the very least, if you already have storage and distribution facilities already at your disposal.

Ok fine, one of you has the time and money and inclination to start a co-op. Now you will need to get all of the legal matters taken care of. There is lots of information on the net about starting co-ops. The "Farm to consumer legal defense fund" will be of great help, visit their site. You will need to have contracts drawn up for members. You will need to have a distribution system set up. You will need to decide if this is a one size fits all, or will there be different membership levels. You will need to set up a website. Printed info is expensive, much better to communicate with members through a website, and a good one, which will run $500+.

Ok now you are ready, start calling around to manufacturers and suppliers with your business license and tax ID number in hand and see what is the best prices you can get, buying in bulk at wholesale prices. This is going to take a while.

Alright, you are probably several months into the process by now, you set up a place to keep stuff, you set up a way to package and distribute stuff, you have some temp. help hired to do the actual lifting and moving. You have your sources secured, you have your cost figured, so you know just what you can offer the products to the customers for and still make enough to cover expenses, you have your website up, so people can read all the needed info., you have your contracts made for members. You still have some capital left to keep things moving forward until the members start signing up. Ok, You are ready to make the big announcement.

HT co-op is open for business and ready to sign up new members?

Let me know when you get to this point and if you have come up with some good products at prices better than I am getting locally I might join.

This is the reality of a co-op, for better or worse.

[claytonpiano]

I have been a part of a co-op like you are suggesting twice. Both times it was great. One person does the ordering and takes the drop off. All parties are responsible to meet at a certain time to help sort. The smaller the co-op the easier it is to sort and you might not need lots of help. All participants must pay before the order is placed to avoid someone stuck with all the materials and no money.

The value was that we paid wholesale prices for only a small amount of work. The order is placed every 3 months or so and is normally drop shipped to someone's garage where it is easy for the truck to turn around. Otherwise you have to arrange for another drop off point.

[claytonpiano]

As for the legal matters, that was mega simple. It was a small fee and a tax ID. You did have to file quarterly, but that is a simple piece of paper and a check. It really was not a problem here in NC.

[Muleman]

There you have it, so who is going to start it, and let us know what is going to be in the first order and how much it will be? BTW, Clayton, I am not driving to NC, can you ship mine, or drop it off on your way out west on vacation or something?

[Marilyn]

Did I misunderstand, or was Wade talking about a simpler, more local version?

[Muleman]

Maybe I misunderstood? A local co-op would certainly be simpler between maybe 4 or 5 people. Kind of the "Economics of scale" issue though, as the more people, the more buying power, thus the more discount.