Joseph Lofthouse wrote:
Could you describe the Direct charge grocery co-op model? What does it purport to do? How does it operate, etc...
Sure, sorry... I don't know if they always work exactly like this, but the legendary Nanaimo one apparently charged its members wholesale cost for everything, i.e. they sold everything for exactly what the supplier had charged them. So prices were very low. The overhead costs (rent, utilities, labo(u)r...) were charged directly to the members.
The economic logic is great. So, you're already paying $30/mo. let's say as your share of the overhead. And the place has rock-bottom prices. Why would you shop anywhere else? You want to recoup those $30, and everywhere else is more expensive to buy anything, because everyone else charges a markup on things and your co-op doesn't. So loyalty is built in.
The monthly charge is a marketing problem though, I guess. As cool as this plan seems to me, most people don't want to pay a monthly fee for anything. "Safeway doesn't charge me a monthly fee!" All the time being blind to the higher prices, 20 cents more on this, 55 cents more on that, etc, etc, ... it doesn't seem like money, even though it usually adds up to a lot more than your monthly fee at the co-op. It's the same reason people buy 10 pairs of cheap boots over time for $40 each, rather than one good pair for $150... "$150 is expensive, I can't afford that" ignoring the fact that they're actually spending $400 on the "cheap" ones. I think we're wired to think this way, and we have to train ourselves pretty hard to see things more rationally.
Anyway, the model has this PR problem, or maybe it's a human perception problem, and as a result is not very popular, but I keep hoping that some day people will come around and it will take off. Or maybe it has, and there are some people doing it successfully. That's why I asked. I'd love to hear about any cases people know of.