Federation of Buying Clubs

[Simon V]

Hey all!

I’m wondering if anyone has any examples of buying clubs pooling resources together in an intentional way? Like maybe 5-10 buying clubs saving money by buying larger quantities than they could individually?

Thanks,
Simon

[Peter Dean]

Hi Simon,

Two groups who would likely know about examples are:

Cooperative Food Empowerment Directive (CoFED) which focuses on food co-ops and buying clubs led by BIPOC & LGBTQ+ communities.
Provides training and resources for cooperative food systems.
https://www.cofed.org

National Cooperative Grocers (NCG) which supports independent food co-ops across the U.S.
Helps with bulk purchasing, distribution, and advocacy.
https://www.ncg.coop

I hope that helps.

In cooperation,

Peter

Peter Dean (he/him)
Director, UHAB National

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[Mike Houston]

On the food side, I know more about this topic so I'll try to keep my comments short, but I'm always happy to follow up further on this topic.  

We're a member of NCG and get better pricing as a result.  However each individual drop-off location from the wholesaler's perspective, is still subject to their own purchasing agreement, and that end-cost is built almost entirely on volume.  The other factor is the ease of the delivery.  Basically how full can we fill the truck, and how many times to we need to stop it?

We would not get any advantage from "pooling" 10 different food co-ops in the area if the truck stopped at each location.  The stores with smaller orders would still be paying more.  If those 10 co-ops ordered to a central location, you could begin to see savings.  But then you have to take on a big logistics operation to get orders broken down and delivered (along with refrigerated and frozen storage capacity) to the individual stores, which would likely eat all of the wholesale savings.  Weaver's Way in Philly operates this way, they get orders for all 4 stores delivered to one facility and then delivers the orders to their individual stores.  But they spend almost all the cost savings on trucks and staffing to do so.  

There would also be the issue that in order for 10 stores to order from a wholesaler as one, one has to act as accounts payable and receive payment from the others, and be liable to the wholesaler.  That would logically be the largest store, which really wouldn't be getting much financial benefit from the purchasing arrangement compared to the smaller organizations, but would be taking on a lot more logistics and potential liability if someone in the group couldn't pay.  

So not impossible, but unfortunately not as simple or cost-effective as it might seem at first blush.  I'm leaving out a lot of detail, so happy to engage more if there's a specific ask or purchasing situation I can help solve.  

Mike Houston

General Manager

tpss.coop 

TPSS CO-OP 301-891-2667

Fax: (301)891-2695

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[Vic Goncalves]

The Community Purchasing Alliance does exactly that! 

https://www.cpa.coop

Vic Goncalves (They/Elle) Project Manager & Advocacy Specialist cell: 202-644-2290 web: micasa-inc.org

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[Alex Smith]

Vic, thank you for the shout out!

Yes, the Community Purchasing Alliance (CPA Co-op) pools buying power for many service/facilities contracts with the goal of saving institutions time/money while shifting spend to local, woman-owned, and BIPOC-owned businesses: 

• Accounting
• Electricity and Natural Gas
• Copiers
• School lunch / food service
• Commercial insurance
• HVAC
• Janitorial
• Security guards
• Rooftop solar
• Waste hauling, recycling, and composting

Alex

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al...@cpa.coop

(202) 599-3139

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Want to chat more? Here are some times that are good for me.

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“[CPA] Membership pays dividends both literally and figuratively.” 

—Enje Brown, Director of Operations at Maya Angelou Public Charter School

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