Coupon Accepted Successfully!


Consumer Cooperative Store

A consumer cooperative stores are organizations which are owned, handled and managed by consumers themselves. The objective of consumer cooperative stores is to lessen the number of middlemen who increase the cost of production, and hence present service to the members. These stores normally purchase in a large scale, directly from producers or wholesalers and sell them to the consumers at reasonable prices. Because the middleman are eliminated or reduced, the members get good quality goods at cheaper prices. The profits earned by these stores during a year are used for declaring bonus to members according to purchases they make and for strengthening the general reserves and general welfare funds or similar funds for social and educational benefits of the members. To start a such a store, a minimum of ten people should come together and form a voluntary association and get it registered under the Cooperative Societies Act. The management of the store is democratic and entrusted to an elected managing committee where one man one vote is the rule but the liability of the members of a cooperative store is normally bounded to the amount of the capital contributed by them. To have a fair management of funds the accounts of the stores are audited by the Registrar of Cooperative Societies or some person authorized by them.


  1. Ease Information: It is easy to start and organize a such type of a store. Any ten persons can get together to begin a voluntary association and get themselves registered with the Registrar of Cooperative Societies by completing the required formalities.
  2. Limited Liability: The liability of the members in a this store is bounded to the extent of the capital invested by them. More than that capital, they are not liable personally to pay for the debts of society, in case the liabilities are more than its assets.
  3. Democratic Management: These societies are democratically managed with the help of management committees which are selected by its members. And each member has to give only one vote irrespective of the shares held by him/her.
  4. Lower Prices: Such a store buys products directly from the producers or wholesalers and sells them to members and others. Reduction of middlemen results in cheaper rates for the consumer products to the members.
  5. Cash Sales: The consumer cooperative stores normally sell goods on cash basis. As a result, the requirement for working capital is reduced.
  6. Convenient Location: These stores are normally opened at convenient public locations where the members and others can easily buy the products as per their needs.


  1. Lack of Initiative: As these stores are handled by persons who work on honorary basis there is a lack of required initiative and motivation amongst them to work more effectively.
  2. Shortage of Funds: The main source of capital for such a store is the money raised from members by issue of shares. The stores normally face shortage of funds as membership is limited and this comes in the way of development and expansion of these stores.
  3. Lack of Patronage: The members of these stores normally do not patronize them regularly and because of this stores are not able to operate successfully.
  4. Lack of Business Training: The people who undertake the responsibility of the management of cooperative stores lack expertise as they are not trained in running the stores efficiently.

Test Your Skills Now!
Take a Quiz now
Reviewer Name