Like regular businesses, there are many different types of cooperatives. But co-ops are unique because they exist to serve the needs of their members first. This means that a coop’s purpose directly informs the way it operates and the way it’s structured. Let’s take a look at some of the most common types of co-ops.
Worker Cooperatives
Worker-owned cooperatives deliver goods or services to the public as one member-owned entity. There are many different forms of worker-owned coops, which are generally based on the services or goods the worker-owners offer. Some industries, like the ones below, are especially suited to worker cooperatives.
Social Cooperatives
Social co-ops essentially provide a space for informal sharing of good and services to its own members rather than the public or non-members
Marketing Cooperatives
Marketing cooperatives are comprised of individual goods or service providers who collaborate to collectively market and sell their products, all while maintaining their independent ownership and operations. This collaborative approach allows members producing similar or identical products to join forces in marketing and selling, thereby avoiding individual competition that could potentially devalue their businesses if pursued independently.
Consumer Coops
Consumer co-ops allow members to pool their buying power to purchase goods or services as one entity. This often gives them more power to negotiate stronger terms and pricing. Consumer co-ops are often grouped by the type of goods or services they purchase.
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The 7 Cooperative Principles
There are seven core principles that cooperatives around the world generally subscribe to. These principles were developed by the International Cooperative Alliance to create consistency and unity among the world’s many co-ops In addition to ownership, control, and patronage-based profit sharing, most cooperatives adhere to the seven internationally-recognized cooperative principles: Voluntary membership – coops are voluntary organizations
How Cooperatives Are Structured
Cooperatives are member-owned and democratically controlled businesses that distribute profits based on an equitable patronage system. Cooperatives are structured by type of cooperative, the tax status and the legal entity that is chosen by its members. The decision depends on the mission and needs of the co-op. Difference between Co-op Type, Legal Entity and Tax
How Money Flows Through a Cooperative
The way money moves from clients to the cooperative, to the worker owners and shareholders is based on the value of community wealth building. The system that keeps any value generated by individuals (such as profit, labor, etc.) within the co-op and distributed back to those individuals is called patronage. Sometimes, members are even called
