# CO-OP



## Lively Bee's (Dec 9, 2004)

Sounds like it could work out. But more detail is needed.


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## Sundance (Sep 9, 2004)

I think it's a good idea. As a group we
kinda do a bit of it on packages and the
such.

I know when I ordered from Shastina it would
have been nice and a savings to have more
volume.

Not sure how it would work though?? Was the
mechanics of it bounced around??


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## Barry Digman (May 21, 2003)

There are lots of ways to go with co-ops. The simplest would be a structure that simply provides a member with an ID that would be presented when purchasing from a supplier who agreed to offer a discount for the member. 

I think there are probably a lot of beesource members who are either familiar with or part of co-ops, from rural electric to their local agricultural co-op. For outdoors types, you know who REI is and how they operate. I don't envision retail stores and such, but I could see a point where a woodshop manufactured thousands of hives a year for a co-op at a pretty sweet price. 

To start with, I'd simply put out a call for an item or two that most beekeepers plan on buying. Tally up the confirmed orders, then shop them around for the best price. I would think that if a supplier got a call to bid on a relatively large quantity of something that they'd work with you. Again, it has to be structured so that both supplier and member benefit. I'm not interested in the Wal-Mart model of brutalizing suppliers. 

Maybe Rob Mountain has some input on how we could proceed.


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## Robert166 (Mar 12, 2005)

I think its a great idea!


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## KSbee (Feb 18, 2005)

I've considered starting a co-op before and think it's a great idea. Obvisouly the first thing that comes to mind is bulk pricing on supplies, but a co-op could also act as an agent to bring hobbiest and sideliners together as a united group capable of providing pollentation services, bulk honey sales, marketing, etc.

Sue Bee Honey started as a co-op and seems to have done well... http://www.suebee.com/history.asp

Other agricultural co-ops I've seen (mostly grain elevators) have failed over the long term. Don't know why but it's something to be aware of when setting one up.

I'd be willing to get involved should there be enough interest.


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## Joel (Mar 3, 2005)

{Maybe Rob Mountain has some input on how we could proceed.}

In recent discussion with Rob regarding the convention he expressed he expressed he is very interested in introducing beesource members to His 12,000 square foot Dadant Facility. Of course on most items Dadant has a built in quantity discount. This may be a good thing to look at topically at the convention.

Why not support one of ours!

[ January 24, 2007, 08:03 AM: Message edited by: Joel ]


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## KYMBK2KW (Jan 18, 2007)

I work within a co-op of sorts, but it is more a labor co-op than one stictly for buying...although we do take advantage of volume discounts. There are six of us in our group, most would fall into the hobbyist category and would never be able to take advantage of quantity discounts without sharing the order. We each have tasks that we do for the group as a whole, feeding, moving bees, raising queens, building equipment, extracting/bottling, marketing, etc. I have given presentations to other beekeeping clubs on how we arrived at the point we are at now. The main pricple that keeps us operating as we are, is that each member approaches the co-op with the attitude that we are determined to give more than our share of labor and time. The compensation for the hobbyist is in having a "free" supply of queens, getting a pollination check for a few of their hives, getting relatively cheap syrup, having supers ready for pickup when needed...and on and on. The compensation for the sideliners is in not having to take the time to feed hives and build, or paint, equipment, but being able to concentrate on managing bees. By operating "cooperatively" we are also able to fill larger pollination contracts, and keep a consistent product, both in supply and quality, on the shelf. It works for us, but the type co-op being discussed here would be much more a "buyers" co-op intead of a labor-sharing one, where the inividual personalities and attitudes would not necessarily come into play. It is an idea that will work, given there are a few people dedicated to the managing end.

kw from ky


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## Sundance (Sep 9, 2004)

Joel has a good point. At what point does
the co-op concept cut in or damage the 
viability of our limited number of suppliers??

The idea of a discount for members would be
nice.

As most us know, when you buy in quantity 
the price drops. 

As Coyote said earlier we don't want the
Wal-Mart model brutalizing our suppliers.


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## NW IN Beekeeper (Jun 29, 2005)

[Other agricultural co-ops I've seen (mostly grain elevators) have failed over the long term. Don't know why but it's something to be aware of when setting one up.]

The short answer is it because of bad management. 
The long answer its because of more complex economics. 

Many grain elevators failed because of conglomerate corporations monopolized the market and caused grain purchase prices to bottom out. And once they did they folded our would bought out. 
1. Not buying local grains, 
2. Paying too low a buying price, 
3. Keeping silo overstocked, 
4. Charging too high a price on seed stocks

I applaud this idea because it is a very good example. 

Let's apply the grain elevator senario to bee equipment. 

1. Not buying local grains.
What if it was in the best interest to buy woodenware in bulk from China? 
We'd have the power to wreck a lot of US businesses and worsen a trade deficit. 
We could also beef up one supplier while the others starve. 

The real bottom line to us however is product + shipping. 
So unless we plan to co-op to multiple sources some people are going to a lot of shipping. 
If we do co-op to multiple places we loose our collective buying power. 
I dont know how a constructive balance could be struck here? 
Wed have to work with someone nationwide that would be willing to drop ship a split shipment. Nationwide alone alienates a great number of suppliers. 

2. Paying too low a buying price.
If we buy exclusively from one source considerably under market price, the others may not have motivation to stay in business. Keep in mind you are funneling business towards one source. Now you can be a wise guy and say thats how a capitalistic market works, but lets be real here, no supplier, no supplies, no beekeeping. Lets continue to be real and ask how many new beekeeping supply businesses are likely to open for every one that fold? I dont think too many. 

Some businesses survive on diversity. Profits on woodenware may balance the lower margins on say candle supplies. If you take all their woodenware business away, they may fold and we'd loose a candle supplier, maybe one with unique products. If you narrow the available product market, you will reduce the quality of the beekeeping craft.

3. Keeping silo overstocked.
Collective buying could cause other sellers to have excessive inventories. If only one seller gets all the wire mesh business, the others will have rolls lying around gathering taxes and storage fees. 

You have to understand that there is pipeline effect on the supply chain. Companies benefit from us buying extra nucs, it puts one on our shelves, two on the store shelves, two in transit to the store and two more being manufacured (where juan and jose are kept happily employed). And keep in mind this happens for the dozen suppliers country wide. 

If you buy from one source, the 11 others have 66 unsellable nucs and 22 people unemployed. 


4. Charging too high a price on seed stocks.
Once you wash out the competition and only a few nationwide suppliers exist, they can monopolize the market and reset the product price. 


Other Thoughts: 
-Who will research the product prices for the items we want? 
-How often would this be updated?
-How/Who would we determine when to buy what items?
-Would the co-op only apply to select bulk items? Who selects them? 
-How would shipping costs be figured?

As we buy in bulk it cheapens the product to us, but it also drives the manufacture to make a cheaper product for the sell to resale. Thats not good in end product quality. But as a Co-Op, we can shop around for better quality products and that power keeps product quality up. Simple economics. 

Collective buying can be powerful and beneficial, just so long as we don't smash the suppliers in the process. 

I honestly think if a system like www.pricewatch.com or another system where the seller posts the item price (remove our responsibility and labor to research prices) wed be much better off shopping in each or our own little micro-economic area getting exactly the item we need. Then even the small outlets could compete. This may also motivate suppliers to be more pro-active in their vicinities. 

-Jeff


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## BULLSEYE BILL (Oct 2, 2002)

Great post Jeff!

Question, Isn't the idea to negotiate with the manufacturers, not necessarily the distributors?

Perhaps it should be called a Buyers Club instead?


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## KSbee (Feb 18, 2005)

Purchasing direct from the manufaturer makes the most sense to me. 

Something in terms of the pricewatch site wouldn't be too difficult to implement for someone with knowledge of web development, or for that matter the club could hire a firm to develope the website and keep it updated and going. Preferrably a web development company that's involved in beekeeping or keeps other ag related sites... I like the term "Electronic CO-OP"...

I put together a spreadsheet a couple years ago that was set up to compare materials prices from various suppliers. It was interesting to see how it all added up. For example if we were only considering hive bodies, Vendor #1 may be least expensive. When considering foundation, Vendor #2 may be the most reasonable. However, when both are purchased together and you include shipping it may be the least expensive from Vendor #3 although they were higher when comparing the individual items.

Here are some thoughts that come to mind when thinking of a website-
- If I were a Vendor I would definitely consider supporting it in exchange for ad space.

- Also I would gladly provide pricing information, no matter where I fall in comparison to others. It's all available on the web or from catalogs anyway, this just makes it easier for potential buyers to access.

-Shipping would have to be centered around geographic areas and members of the co-op within that area (let's assume these areas are called Divisions). That way members from one Division for example, NE Kansas, could identify their needs for the year and group that order in with the remainder of the Divisions. Lowest overall price for each Division including shipping to that Division wins and the order would be shipped to a pre-defined place within the Division where members would collect their goods.

-To achieve the best volume members could plan their orders ahead of time and submit for a quarterly order cycle or some other interval. Individual needs that arise in between orders could be placed as normal and shipped directly to the members location, but they would have the advantage of knowing all the pricing options from the website.

-Personally I would also like to see some way for members to pool honey for those that wish to sell in bulk, or pool hives for pollination.

Lastly, I doubt we're the first to think of this. There's probably other website organizations out there doing the same thing for their industry. Finding them for use a model would help us be one step ahead.


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## Barry Digman (May 21, 2003)

"Perhaps it should be called a Buyers Club instead?"

That would really be the initial goal. Set up a simple structure with each member having an ID card. Present the card when ordering from participating suppliers and get a discount. I think the beeks here are too widespread for the club to function like a true local coop. I suppose the members in a local area could benefit from pooling into one large order shipped to a single location, but I would think that they're probably already doing that through their local bee club or association.


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## Craig W. (Feb 26, 2006)

This is a great idea. A Co-Op would help each and every one of us.

I helped form an "Angel Fish" organization once, ours was not a CO-op, but we had people designated to do certain things. Mine was handling the money, LOL. Another had the website and so on. We had meetings in a chat room, one person was the secretary. We went from there to the point of establishing definitions for species of fish.

Maybe we could start along these lines?


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