Exercises · Q10
Q."Consumers co-operative societies suffer from certain limitations." Discuss any four such limitations.
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Start your 14-day free trial to unlock the full solution →Although consumers co-operative societies are valuable, they suffer from several limitations. Four important ones are:
- Shortage of capital — Because members are ordinary consumers of small means, the funds they 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 elected from among ordinary members who may lack the buying experience, stock-selection judgement and book-keeping skill that successful retailing demands, which leads to poor decisions and losses.
- Competition from private traders — Private shopkeepers offer credit, home delivery, longer hours and 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. …
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