How does a consumers cooperative society work?

Question

How does a consumers cooperative society work?

Answer 1

A consumers' cooperative is a cooperative business owned by its customers for their mutual benefit. It is a form of free enterprise that is oriented toward service rather than profit. The customers or consumers of the goods and/or services the business provides are often also the individuals who have provided the capital required to launch or purchase that enterprise.

There are many types of consumers' cooperative. There are health care, insurance, and housing cooperatives as well as credit unions, agricultural and utility cooperatives. The major difference between consumers' cooperatives and other forms of business is that the purpose of a consumers' cooperative association is to provide quality goods and services at the lowest cost to the consumer/owners rather than to sell goods and services at the highest price above cost that the consumer is willing to pay.

In practice consumers' cooperatives price goods and services at competitive market rates. The difference is that where a for-profit enterprise will treat the difference between cost (including labor, etc.) and selling price as financial gain for investors, the consumer owned enterprise may retain this to accumulate capital in common ownership, distribute it to meet the consumer's social objectives, or refund this sum to the consumer/owner as an over-payment.