Features of Retail Co-operative society, Advantages, Disadvantages

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Table Of Contents

1. Meaning of retail co-operative society.
2. Features of retail co-operative society
3. Advantages of retail co-operative society.
4. Disadvantages of retail co-operative society.
5. Revision Questions.

RETAIL CO-OPERATIVE SOCIETY

Meaning: Retail co-operative society is a form of co-operative in which many small independent retailers pool their resources together to enable them make bulk purchases and then sell the goods at lower prices to their members.

The major purpose of cooperative society is to make profit. The profits made are shared in proportion to the amount of purchase made by each member.

The co-operative society are formed basically to:

• Arrest high cost of commodities.
• Arrest the activities of middlemen
• Protect inexperienced buyers from skillful salesmen.

For a retail co-operative society, capital is provided by members who pay a membership fee and also buy at least, one share.

Features of Retail Co-operative Society

1. Stock variety of goods: Retail Co-operative society is known to stock wide variety of goods for their members.
2. Owned by members: The retail co-operative society is owned by the entire members who register and buy their shares.
3. Patronage by members: The retail co-operative society is basically patronized by members.
4. Management by selected members: The retail co-operative society is usually managed by elected officers who formed the management committee.
5. Democratic control: Most cooperative society do achieve their objectives by democratic control because all their decisions are taken through election and the view of the majority is obeyed.
6. Lower prices: Retailers cooperative society do enjoy low prices of goods because they purchase their goods in bulk.

Advantages of Retail Co-operative Society

1. High turnover: Since members are paid dividends based on their purchases, the turnover is high because members always purchase from the cooperative society.
2. Sales on Cash and Carry basis: Sales are strictly on cash therefore, there is nothing like bad debts.
3. Low prices: Members pay low prices for goods purchase from the cooperative society.
4. Economics of large-scale operation: Retail cooperative societies do enjoy economics of large-scale operation as a result of the availability of huge capital which enables bulk purchases and resulting in low price of goods to customers.
5. Democratic management and control: Retail cooperative society is usually managed and control by elected management committee and members have equal rights, i.e, one man, one votes.
6. No need for advertisement: There is no need to spend money on advertisement since most members are customers of the society.
7. Payment of dividends: Retail cooperative society do pay dividends to their members on the basis of patronage at the end of the year.
8. Membership is open to anybody: Membership of the retail cooperative society is open to anybody who can pay a membership fee and buy, at least, one share.
9. No exploitation: There is no expectation because any surplus reverts to members according to their purchases from the cooperative.

Disadvantages of Retail Co-operative

1. Too much democracy: There is too much democracy in retail cooperative society to the extent that management depends on vote of members in order to hold a position.
2. Incompetent management: Most of the elected members that manage the cooperative society may be illiterate and incompetent to run the business.
3. Illiteracy of members: Most members in retail cooperative lack the knowledge of modern trends in business.
4. Narrow range of goods: Retail cooperative society deals on very few range of goods. They may have only two to five range of products available to members.
5. No room for credit facilities: There is no room for credit facilities as goods are purchased on Cash and Carry basis.
6. Lack of capital: Most co-operative societies lack capital to finance their projects.

Revision Questions

1. What is Retail Co-operative Society?
2. List Three aims of retail co-operative society
3. State six features of Retail Co-operative Society.
4. State five advantages of retail co-operative society.
5. State five Disadvantages of retail co-operative society.

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