Vending Co-Ops

[s.weir]

"A cooperative (also co-operative; often referred to as a co-op or coop) is a business organization owned and operated by a group of individuals for their mutual benefit"-Wikipedia

So this was brought up in another post and I found it interesting.  Since this forum is about independent vendors and we constantly are competing against large corporations, would regional vending cooperatives help us?  Certainly it would allow us to order in bulk and would give us the cost benefits that large companies receive, but with these advantages come disadvantages such as possible dishonesty between vendors.

What does everyone think?    

[mission vending]

I don't know about at a regional level, I have and am doing this on a local level.

Back when I was too small to order from Vistar and be able to move the product before it went out of date I realized I had to do something to get the product I needed to offer better variety to my customers. I started by talking with some of the folks that I saw at Sam's every week and asking them what they thought of co-op'ing on some orders to get better deals. It took several monther but I came up with about 10 vendors that SAID they were interested. I then spent another couple of months talking with these guys on occassion and getting them copied of an order book and following up later to see if there was still interest.

By this time I had eliminated a couple just because I didn't feel good about them living up to their end.

Next I approached the remaining potential members with the following offer:

1. I will coordinate and place the order, receive it and pay for it up front (to get the 2% cash discount) I made no secret about the 2% or the fact that I would keep it for my trouble but the others would only pay the invoice price and there would be no other markup.

2. They could meet me at my storage unit to pick up their portion of the order or we could meet at Sam's and payment would be on delivery.

3. A bounced check will only happen once, after that CASH only.

4. No additional order until previous order is paid for.

We had/have a gentleman's agreement to not target each others accounts, but if we ran into one we agreed to give the other an opportunity to save it before taking it. For the most part it has worked remarkably well.

I started with 5 others, one is still in business and has his own warehouse, at least one other is still in the business, but I don't know what his situation is and the rest I don't know about. As they drifted away I kept on recruiting "new" vendors at Sam's in order to make meeting minimum order requirements easier on ME.

Make no mistake, putting this together can be a pain in the butt and I did get burned a few times with stuff that was never picked up that I had to put out in my machines with short dates in order to get something out of it. On the other hand I also got access to product variety that I would not have gotten otherwise and that helped me to grow

Currently I don't really need to do this anymore but I am doing this for 2 small vendors anyway. Why you ask? Well for one, we all know what the attrition rate is with new vendors, so when they do decide to get out who do you think they will talk to first? 

[s.weir]

Currently I don't really need to do this anymore but I am doing this for 2 small vendors anyway. Why you ask? Well for one, we all know what the attrition rate is with new vendors, so when they do decide to get out who do you think they will talk to first? 

First off Mission, you are a true genius of vending my friend.  Your my idol in this industry for many reasons, but the above quote I found funny and true.

As per the co-op thanks for sharing your experiences.  Jmac and I have talked about combining orders on things in order to save on shipping because we both live in relatively the same geographical location.  We will see how it goes, I think it will go well.