Cohousing-L Mailing List: Re: Communal buying...

[Sharon Villines (sharon]

On Wednesday, March 19, 2003, at 12:16  PM, Rob Sandelin wrote:

>  I am always
> astonished when I go into the local coop and see how much they have 
> marked
> things up compared to what we, and they, actually pay for them. The 
> Markup
> at the local supermarket is sometimes staggering. The Wednesday before 
> the
> delivery we turn in order sheets from the large catalog, then the 
> order is
> called in Thursday and delivered friday. One month, just for fun, I 
> took our
> filled order sheet to the coop in town and did a savings tally. That
> particular month we saved 1/3 the cost of our food and other household
> products.

The standard mark up in all retail industries is 100% (double the 
wholesale cost). This covers labor, rent, utilities, theft, insurance, 
etc. If a product cannot be sold with a 100% markup, it will not be 
sold. On some items like fancy hats or gift items the markup is 2-400% 
of wholesale cost because the items are often not sold or sold at 
discount. The people who pay full price are paying for the losses on 
the unsold items.

A coop would mark up 1/3 because they ostensibly have lower labor costs 
and less theft. A less fancy storefront, less advertising, and less 
wastage since they only carry what they know they can sell. No sales or 
discounted purchases (or all are discounted).

If you considered the costs of the time of the team who distributes the 
food and the costs of the commonhouse for the time the food is being 
divided and distributed and stored there, the prices would be much 
higher. The lesser cost is partially a case of incomplete accounting.

(I know this from working with people on business plans for a wide 
variety of small businesses.)

Sharon
-----
Sharon Villines, Washington DC
Where all roads lead to Casablanca

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