Q."A consumers co-operative society eliminates the middleman." Explain this statement.

The elimination of the middleman is the single idea that gives a consumers society its power to sell cheaply.

The statement is true, and it explains the very heart of how a consumers co-operative society works.

The ordinary chain of trade. Normally a good travels from the producer to a wholesaler, then to a distributor, then to a retailer, and finally to the consumer. At every stage the trader adds his own profit and expenses, so the price the consumer finally pays is much higher than the producer's price. These intermediate traders are the middlemen.

How the society eliminates them. A consumers co-operative society buys goods in bulk directly from the producer or a wholesaler and sells them straight to its own members through its store. In doing so it removes most of the intermediate links in the chain. The profit that each of those middlemen would have taken is now saved.

The result for the member. Because these layers of profit are cut out, the society can sell goods at fair and reasonable prices — lower than, or no higher than, the ordinary market. Whatever surplus the society itself earns is not lost to an outside trader but returned to the members as a patronage bonus, in proportion to their purchases. …

Explain the chain of middlemen and how the society shortens it, rather than merely repeating that 'it removes the middleman'. Marks come …