Limitations of a Consumers Co-operative Society

For all their value, consumers co-operative societies also suffer from real weaknesses, and an honest study must set these against their advantages. The main limitations are:

• Shortage of capital — Since members are ordinary consumers of small means, the funds they can contribute are limited. Many societies cannot buy in large enough quantities to get the best wholesale rates, and so cannot sell as cheaply as they should.
• Lack of business skill / untrained management — Committees are usually elected from among ordinary members who may lack the experience, buying skill and book-keeping ability that successful retailing demands. Poor stock selection and weak accounting often follow.
• Competition from private traders — Private shopkeepers offer credit, home delivery, longer hours and a wider variety, and can undercut a co-operative store for a time to drive it out. A cash-only society finds this competition hard to face.
• Sales limited mostly to members — Because its main custom comes from a limited membership, the society's turnover stays small; it cannot enjoy the economies of a large business and its buying power remains weak.
• Cash-only sales — To avoid bad debts most societies sell only for cash. This is prudent, but it drives away customers who are used to buying essentials on credit from the private shop.
• Lack of member interest and loyalty — Members often buy from the co-operative only when it happens to be cheaper and desert it otherwise, and take little part in running it or attending meetings. This weakens both its turnover and its democratic control.
• Overdependence on government help — Reliance on official assistance and control can weaken the self-help spirit and members' own initiative.