Building a Co-operative Economy
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Types of Co-ops

Co-operatives are unified by their democratic structure, but different co-ops may be set up for different purposes. For instance, a credit union is obviously not the same as a housing co-op. Similarly, a grocery co-op could be owned by the consumers, the farmers providing the produce, or both.

The first thing that distinguishes one co-op from another is who the members are. In this respect, co-operatives generally fall into one of the following categories.

Consumer
Producer
Worker
Multistakeholder

1.  Consumer co-op:

As implied by the name, a consumer co-op is entirely owned by its member-customers, and exists to provide products and services to them.

Consumer co-ops are the oldest form of the modern co-operative, operate in a variety of sectors, and are the most common type of co-op in Canada.

Unless they are set up as non-profit co-ops, some amount of surplus revenues are often re-distributed to the members based on how much each member purchased from the co-op that year.  These payments are called patronage, and are just one of the benefits of membership in a consumer co-operative.

Both credit unions and housing co-ops are consumer co-operatives, as are many retail co-ops, co-op grocery stores, and some health co-ops. 

2.  Producer co-op:

Producer co-ops are usually made up of otherwise independent farmers, entrepreneurs, artists or artisans. The purpose of individual producer co-ops vary, but they usually provide processing or marketing services to their members.

Examples of what producer co-ops could be used for include (but are not limited to):

  • Independent farmers jointly purchasing storage facilities, sharing equipment or hiring joint marketing support
  • Artists collectively purchasing and managing production or display space
  • Doctors, lawyers, or any other group of professionals sharing office space and support staff
  • Independent businesses owning and controlling a collective brand

3.  Worker co-op:

Worker co-operatives are businesses that are entirely owned and operated by the people who work for them.  In a general sense, the service worker co-ops provide their members is employment, and the worker co-op model can be applied to practically any sector in the economy.

Worker co-ops also run the gammut in terms of size, from very small with just a handful of employees around a kitchen table, to multi-billion dollar companies with thousands of employees.

To some extent, the organizational structure of a worker co-op is determined by its size.  Large co-ops may need a complex hierarchical structure with several levels of management, whereas a smaller co-op may opt for a flatter structure and make decisions by concensus.

Regardless of how they're organized, every member has equal say in the direction of their co-op, from junior employees to the highest levels of management.

In a worker co-op, capital serves the interests of labour.  In other types of business, particularly publicly traded corporations, labour serves the interests of capital.

4.  Multi-stakeholder co-op: 

Multi-stakeholder co-ops are usually a blend of some or all of the above categories.  Sometimes having more than one stakeholder group as members of a co-op can carry greater benefits for all than if only one stakeholder group is represented.  

For instance, a co-operative that provides health services may be more effective if owned and controlled by both health care providers and the people who use the services. While successful health co-ops can and have been organized as worker, producer, and consumer co-ops, incorporating the interests of both users and providers may provide opportunities to advance the interests of both more fully than may otherwise be the case.

However, balancing the interests of more than one stakeholder can be challenging, particularly when those interests are in conflict. The most successful multi-stakeholder co-ops acknowledge differing interests of their member groups, and take steps to minimize conflict before it begins.