Hi,
I had an interesting discussion with someone who worked at a smaller distributor today. I had called in order to try and cultivate a business relationship for our local co-op, which is in desperate need of tools and consumable parts like bearings and cables. He mentioned that a lot more co-ops were inquiring about accounts.
He also told me the reasons why co-op/DIY shops were problematic from his end, and it's a reasonable criticism from that perspective. Individually, we simply dont do the volume of business necessary to be attractive to a business interest. The time necessary to administer and verify an account that does maybe a couple hundred dollars worth of business a month for the higher traffic shops kind of burns your profit margins, which are not large at that level. distributors count on reliable, volume business to stay afloat, and take a smaller cut of profit on the assumption that that's the type of business theyll be doing.
I've know that some of the longer running co-ops and collectives have relationships with distributors, but clearly many of the newer ones do not.
I'm curious about a couple of things.
- Does your collective have a relationship with a parts distributor?
- Regardless of the answer to #1, roughly how much does your shop
spend on tools/consumables/things-that-one-would-get-from-a-distributor?
It seems to me that in the first few years of a co-op/nonprofit/collective situation, lots or most of these organizations leverage either existing ties to, or the goodwill of LBSes.
My suspicion is that in some edge cases, where the bike or DIY culture isnt all that strong, this can be a fairly significant issue for a fledgling operation, in terms of both finances and social capital.
The idea that i'm trying to push here is that of a sort of buyers club. Disregarding for the moment the perfectly valid criticisms of the legal structure of 501(c)3s, if there was a nonprofit that could act as a go-between for a parts distributor and a number of regional shops, that would serve the needs of both the for-profit distributors AND the co-op shops. distributors wouldnt have to deal with as much volatility from taking on co-ops as charity cases, and co-ops banding together could drive the price of a lot of the most necessary consumables and parts down even further than their current distributor relationships can offer. in the ideal case, of course.
I would appreciate any input people have. I dont know if this has been suggested before (I suspect it has), but i didnt see anything in my archive of the last year or so. If I'm totally off base in my assumptions I'd like to know that too, where i went wrong, and what the real deal is.
cheers.