What is a Co-op?

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The United States Department of Agriculture has an online report that describes what a co-op is and how to start one.


  Source: Answers.com/topic/cooperative
  
  A cooperative (also referred to as a co-op)is a form of business 
  ownership that consists of a group of people who have joined together 
  to perform a business function more efficiently than each individual 
  could do alone. The purpose of a cooperative is not to make a profit 
  for itself, but to improve each member's situation. However, members of 
  certain types of cooperatives do make a profit by selling their product 
  and/or service to customers who are not co-op members.
  
  Cooperatives can take many forms. For example, a group of single 
  parents may decide to band together to provide a child-care facility so 
  they will have reliable day care for their children. Each parent 
  contributes a certain amount of money and/or time, and in exchange they 
  all have a safe place to leave their children. A credit union is also a 
  type of cooperative. The purpose of a credit union is not to make a 
  profit for itself, but to help each member be more financially secure. 
  By creating their own financial institution, members can receive a 
  higher interest rate on the money they have placed in savings and 
  receive a lower interest rate on loans. Retailers have also started 
  establishing co-ops. Ace Hardware, for example, is a co-op of 
  independent hardware store owners. By banding together, the hardware 
  owners can share advertising costs and receive discounts for bulk 
  ordering of materials and supplies. Sharing costs and discounts allows 
  small hardware stores to compete with large chain hardware stores.
  
  While cooperatives can be found in many different areas of the economy, 
  they are most commonly found in the agricultural area. A group of 
  farmers may band together to allow themselves to be more competitive 
  and to achieve more economic power. Agricultural cooperatives allow 
  members to save money on materials needed to produce and market their 
  product, which means a larger profit margin for all members. Ocean 
  Spray Cranberries, Inc., for example, is a cooperative of several 
  hundred cranberry and citrus growers from all over the country. Other 
  well known cooperatives include Blue Diamond, Sunkist, IGA (Independent 
  Grocers Association), and Land-O-Lakes.
  
  Bibliography
  
  Boone, Louis E., and Kurtz, David L. (1999). Contemporary Business, 9th 
  ed. Orlando, FL: Harcourt Brace College Publishers.
  
  Bounds, Gregory M., and Lamb, Charles W., Jr. (1998). Business. 
  Cincinnati, OH: South-Western College Publishing.
  
  Madura, Jeff. (1998). Introduction to Business. Cincinnati, OH: South-
  Western College Publishing.
  
  National Cooperative Business Association. 
  http://www.ncba.org/index.cfm. 1999.
  
  Nickels, William G., McHugh, James M., and McHugh, Susan M. (1999). 
  Understanding Business, 5th ed. Boston Irwin-McGraw-Hill.
  
  Pride, William M., Hughes, Robert J., and Kapoor Jack R. (1999). 
  Business, 6th ed. New York: Houghton Mifflin.
  
  [Article by: MARCY SATTERWHITE]

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