The Advantages and Disadvantages of Co-Operative Stores.
The consumers co-operative store offers the following advantages its members:
i. The purchases of the store are made in large quantities which ensures more trade discounts in purchase. The presence of more trade discounts facilitate purchase at a lower price.
ii. It can supply goods to the consumers at lower price because it has effected economical purchase by availing more trade discounts.
iii. It incurs less expenditure on advertisement and thereby helps in the reduction of selling price of the product.
iv. The consumers are protected against unfair trade because the stores purchase quality products directly from the producers.
v. The formation of co-operative stores develops the spirit of co-operation and self-help. By this, it has a high social and education value.
vi. It develops managerial ability of the members because they are given a chance in the management.
Co-operative stores are not free from disadvantages. The disadvantages of a co-operative store are:
i. The stores are established to cater the needs of small medium income group people.
ii. Most of the stores are uneconomical size because of inadequate finance raised from its members.
iii. The stores do not exercise efficiency in management because these are managed by amateurs who are not professional managers.
iv. The inadequate finance of the store does not allow to go for large quantity purchase.
v. It lacks loyalty of all the members and as such these are managed by few members. The progress of the store is hampered when all the members are not loyal to the operation of the store.
vi. It lacks proper sales promotion drives by the salesman.