DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : A. Srinivas Kumar
Designation : Senior lecturer
Branch : Commercial and computer Practice
Institution : Government Polytechnic
for women, Nandigama.
Year/ semestar : 1st year
Subject code : CCP -104
Topic : Distribution network
Duration : 50 Mts.
Sub topic : Advantages & disadvantages of
consumers’ co operative stores

CCP104.94 1
Objectives

After completion of period, you would be able

to

 Explain the Advantages of Consumers’ Co-

operative Stores

 Explain the Disadvantages of Consumers’ Co-

operative Stores

CCP104.94 2
Recap:
We know that :
A consumer cooperative society is :
 An Association formed by member consumers

 To eliminate Middlemen

 For mutual benefit of members

 Minimum profit motive

CCP104.94 3
Advantages of Consumers’ Co-
operative Stores
 Purchases the good directly from the
manufacturers in bulk quantities
 Enjoys the benefits of large scale buying such as
trade discount, cash discount etc.
 The stores protects its members from the
exploitation and malpractices of traders and
middlemen
 Supplies goods to its members at low prices due to
economical buying
 Elimination of middlemen
 No expenses of advertising
 Low operating expenses etc.

CCP104.94 4
Advantages of Consumers’ Co-operative
Stores
 Cash sales eliminates bad debts
 Honorary management by members
 Simple organisation managed by members only
 Help in reducing the operating costs
 Exempted from the payment of taxes
 Enjoys the assistance provided by the
government
 Encourages thrift and savings among its
members increases their economic security
 The members can get the goods at a
reasonable price

CCP104.94 5
Advantages of Consumers’ Co-operative
Stores 
Principle of ‘one member one vote’
 Prevents the small group from securing
control of the organization and changing it
into profit making institution
 It is a training centre in self government
and democratic functioning
 It contributes to the social and cultural
advancement of its members
 Helps in controlling the prices since the
middlemen are avoided
 Purchases are made in bulk

CCP104.94 6
Disadvantages of Consumers’ Co-
operative Stores

 The existing consumers’ Co-operative stores

are too small to operate economically
 The membership is also limited
 The stores are suffering from the shortage of
funds
 The poor economic position of the members
restricting the expansion and growth of stores
owing to its insufficiency of capital

CCP104.94 7
Disadvantages of Consumers’ Co-
operative Stores
 The members incharge of the stores
lack business ability, training and
experience
resulting in inefficient management of
stores
ultimately running in losses
 The members do not get a wide choice in
making purchases as in the case of
departmental stores

CCP104.94 8
Disadvantages of Consumers’ Co-
operative Stores
 Only few and important essential
commodities are made available at
stores
 It depends on the loyalty of its members
 Stores are often the victims of
manipulations and frauds by the office
bearers with the result they are running
in losses

CCP104.94 9
Disadvantages of Consumers’ Co-
operative Stores
 Difficult to get efficient staff because of low
salary
 The paid staff of the stores lack initiative and
incentive with the result the performance is
quite discouraging
 There is no direct incentive to bring down
expenses and increase sales
 Allows the withdrawal of the capital
 Leads to serious difficulty because large
number of members may withdraw their
shares in times of depression or other crises

CCP104.94 10
Disadvantages of Consumers’ Co-
operative Stores
 Does not provide any services to the
consumers like after sales service,
recreation, door delivery of goods, return
of goods etc.,
 The number of customers are limited as
this store depends mostly on its members
 Non-member customers are very few,
with the result expansion of the business
is unimaginable

CCP104.94 11
Summary

 Advantages of Consumers’ Co-operative

Stores are: a) economical buying b)
consumers’ protection c) fair prices d) low
operating costs e) eliminates middlemen f)
controlling prices

 Disadvantages of Consumers’ Co-

operative Stores are: a) shortage of funds
b) inefficient management c) lack of wide
choice d) lack of incentive e) limited
customers

CCP104.94 12
Frequently Asked Questions

1. What are the advantages of Consumers’

Co-operative Stores

3. What are the disadvantages of

Consumers’ Co-operative Stores?

5. Give any six advantages and six

disadvantages of Consumers’ Co-
operative Stores?

CCP104.94 13
Quiz
1. Advantage of consumer cooperative
is:
b) Economical buying
c) Consumer protection
d) Both
e) None

7. Disadvantages of consumer
cooperative is:
h) Shortage of fund
i) Inefficient management
j) Both
k) None

CCP104.94 14
Assignment

1. List the Advantage of consumers

cooperatives
2. List the disadvantages of consumers
cooperatives

CCP104.94 15