The answer to the question, “How can I start a buying club?”, is as simple as answering a few questions.
- Why should I start a buying club?
- What are the different models of organization?
- Who else, besides me, wants to be in the buying club?
- What type of product (food, seeds, vitamins) do we want to buy?
- Who can we buy these types of products from?
- How do we collect member orders?
- How often do we place an order?
- Where do we receive deliveries and split bulk items?
Once these questions are answered, we get into the realm of “How do I run a buying club?” This isn’t quite as simple, however, we’ll cover the basics below.
It’s important to note here that there are an infinite amount of ways to handle all the scenarios below. The techniques below are what have worked for one buying club, but may not pertain to your group. That is to say, feel free to alter, edit, omit or mix-up anything that follows.
- Collecting and Compiling Member Orders
- Submitting the Order
- Receiving the Goods
- Splitting the Goods
- Managing Pickup and Checkout
- Reconciling the Order
Why should I start a buying club?
There are many different reasons why one would decide to start a buying club. The motives range from controlling food sources to saving money by buying in bulk. Others include wanting to help local farmers, minimizing a product’s carbon foot print or simply yearning to get closer to the food system. This is just a small list, and the reasons vary for each buying club. We’ll see how the answer to this question impacts decisions below.
What are the different models of organization?
While the concepts behind most buying clubs are similar, their structure can vary greatly. Some models include:
- Owner Run – In this instance, a single owner would operate the buying club as a business. Any price markup or member fees would be profit for the owner. While there could be a few part time employees, more often than not this model is a one person show.
- Member Only Club – This type of club is generally more exclusive, sometimes even imposing a member limit. The members would be the owner, and may choose to hire employees to run the group. Member fees and markup help cover the business overhead, but the goal is maximize savings for the members.
- Worker Co-op – Like most worker co-ops, this buying club would be comprised of a group of members, each required to volunteer a set number of hours per month. Since no one is paid, the price markups and membership fees can be kept very low and while the group enjoys bulk discounts.
- Farm Owned – Occasionally a farm will decide to sponsor a buying club. Some sell only their products while others will also place orders with other distributors. This type of club is great if you’re looking to establish a relationship with your local producers.
There are infinite variations on the above models, but these are the basic type of buying clubs currently operating. That is one of the best things about starting your own buying club, you can feel free to pick and choose elements from each model and create something that works best for your group.
Who else, besides me, wants to be in the buying club?
Depending on where you live, this could either be an easy or difficult task. In some communities, uttering the words ‘raw milk’ could set off a three hour discussion about micro-flora and the FDA. Conversely, some towns might require an equally long discussion to explain why we would want to buy directly from farmers versus supermarkets.
Either way, below are a few ways to gauge interest in your local area:
- Farmer’s Market – At a local farmer’s market you’re bound to be surrounded by people who take food pretty seriously. From the farmers to the patrons, strike up a conversation with a few people and see how they react. Also, depending on the rules at your local market, you might even be able to set up a stand. Bring a sign, some quarter-sheet handouts and a have a notebook ready to collect e-mail addresses.
- Local Produce Markets – People who frequent or work at a smaller produce market might have some interesting insight into the local food scene. At the very least, you might be able to get some information on potential distributors.
- Internet – The ‘Community’ section of Craigslist.com could prove to be useful. Publish a post explaining your plans and ask people to send along emails if they’re interested. Another site that could be useful is Meetup.com. Start a meetup group surrounding food and see if anyone’s interesting. Even if you don’t have an actual meetup, the site’s discussion tools are pretty useful.
- Cooperative Extension – No matter how successful the prior avenues are, a phone call or meeting with your local cooperative extension would most likely prove fruitful. These people deal in the agriculture and community on a daily basis, and are always a wealth of knowledge.
What type of product (food, seeds, vitamins) do we want to buy?
Most people assume a buying club would be associated with products normally found at a supermarket, but that’s not always the case. At the very least, it can be just the beginning of a buying club’s scope. For instance, in one buying club members got together and ordered a palate of glass gallon jars. These jars were great for storing the bulk items ordered through the club. In another instance, the same group bought several dozen fermentation crocks at wholesale price. Nothing prompts the purchase of ten pounds of cabbage like a three gallon crock.
The point being, you can start with local produce from a farmer in your area. You can buy seeds in bulk for your respective gardens in the winter. Or, you can even purchase an entire animal in the spring to be split among the club’s members. What ever product you decide to buy as a group, it will inform future choices, such as…
Who can we buy these types of products from?
There are several types of distribution to consider when forming a buying club. This decision will require the group to really focus on what it’s trying to accomplish. Cheaper food for members? Getting food closer to its source? Generating more profit for the producer? These points and many others all have pros and cons.
Once the goals of the group are determined, there are three tiers of producers:
- National Distributor – There are several national distributors that work with buying clubs. The benefits include lower prices, greater range of products, order credit plans and organization. Some of the drawbacks are non-local product sources and greater transportation distances. Also, some companies require commercial loading zones for delivery, which is something we’ll talk about more later.
- Local Distributor – The existence of a local distributor in your area isn’t guaranteed, but there is normally at least one handling fresh produce. The pros in this case are locally sourced product, generally smaller delivery vehicles and the possibility of forming a close relationship with the company. Downsides can include less formal delivery schedules, cash on delivery (COD) requirements and large inventory fluctuations.
- Direct from Producer – Buying the product directly from the producer is an excellent choice if possible. Not every farmer/producer is willing to deal in small quantities typical for buying clubs, but if an agreement can be reached this can lead to excellent business relationships. The plus to this arrangement is freshness of product, intimate knowledge of its source and the potential to even have a say in the product types available. Potential pitfalls range from a lack of delivery options, payment prior to delivery and inventory instability.
How do we collect member orders?
There are many ways in which clubs gather and organize member orders and they vastly range in technical requirement. Some groups get together in one place and compile the order together. Others telephone and/or email orders to one point person who then creates the order.
In more recent years, clubs have began embracing the use of Internet for this job. There are several software based options for on-line ordering and some groups even use the collaborative power of shared Google Spreadsheets. For more information on these options, please look in our Tools & Resources section.
How often do we place an order?
This can depend on needs of the buying club and the inventory of distributors. Some clubs order as often as once a week, while others order monthly or even quarterly. One scheduling detail that can be very important is being consistent on what day the order is final. It could be every Wednesday, or the first Tuesday of every month. Whatever it may be, members often find it helpful if a system is established and followed.
Where do we receive deliveries and split bulk items?
This ultimately depends on several factors, including how many people there are in your buying club, how large your orders are and who you’re ordering from. If your club is small and the distributor can deliver it to a members house, a residential living room or garage can suffice. If the club is a bit larger and/or a national distributor required a commercial loading zone you may have to consider a larger venue. Such spaces include churches, grange halls, community centers and even unused commercial spaces for lease.
Collecting and Compiling Member Orders
Depending on the size of your club, this will vary. If you’re five to ten people, simply emailing or calling in orders to a single order compiler would suffice. However, if your group is larger, you might want to consider an Internet based tool. On the simpler side of things, you could use a Google Spreadsheet and share it with all of the members. It can be useful to have a dedicated member watching this spreadsheet, in case product names, prices or orders are entered incorrectly.
If your group continues to grow, and the spreadsheet begins to hit its limits, there are several on-line software options to help manage member ordering and order compilation. Click here to see these tools under our Tools & Resources page.
Submitting the Order
This task depends on which distributor(s) you’ve decided to deal with. In some instances, faxing or calling in your order is an option, mainly with small vendors. However, a bulk of distributors will either prefer or require the order to be submitted electronically. In this realm, it’s usually either via email or an on-line form.
For example, Frontier accepts orders through an on-line ordering tool. This tool is extremely handy in that as your enter products, it will indicate if said product is in stock, back-ordered, or sold out entirely.
If you’re submitting your order by email, vendors usually prefer a spreadsheet format of some sort. Some will provide the format, others are just happy to be getting it electronically. Both the aforementioned spreadsheets and software option help take a lot of the busywork out of preparing the order for submission.
Receiving the Goods
Again, this section is dependent on the distributor. That said, you’ll almost always have to have someone meet the delivery. Be it the vendors own truck or UPS, it’s helpful to have a member available during the drop-off time window. Beyond ensuring the safety of your club’s food, you might also need to pay the delivery driver.
If possible, having multiple members at drop-off will be best. These people can help cross check the delivered items with the invoice and quickly discover any damaged or sub par items. After the delivery is complete, this small team can help organize the order and move any perishables into refrigerators or freezers.
In some clubs, these members can also begin splitting or weighing some of the items. Over time, you’ll be able to determine which products are best to do right after delivery, such as meats and/or cheeses. This may drastically help the next step of the process.
Splitting the Goods
An important part of splitting the order is giving yourself the right amount of time. This will take a couple of tries to figure out the optimal time, and is also dependent on how large the order is. For the sake of this explanation, let’s say it will take two hours to split the order.
Before you do a split, its also important to have the proper tools for the job. If there are items like flour or vegetables, you’ll need glove, scoops, bags and scales. You’ll also need a good amount of pens and markers.
Beyond the tools, you’ll also have to prepare several copies of the ‘split sheets’. These sheets list out, by product, which members purchased said product and in what quantity. Again, the on-line software tools are extremely helpful in this task. Also, if you’re using a Google spreadsheet to order, there may be scripts available for you to create split sheets.
With tools and split sheets in hand, have your splitting team meet two hours and fifteen minutes before the club pickup time. Initially, set up one or two areas with scales for weighing items, if needed. Another task is to set up a box or bag for each member’s order. Often times these can be place on chairs to avoid constant bending over. Each of these boxes should also have either the member’s name on it or their receipt, or both. This will help avoid confusion once the distribution of items begins.
In most orders there are items that need to be weighed and bagged, while others can simply be placed in the member’s box (dry beans vs. dozen of eggs). Split the group into several teams, with some weighing and bagging and the others distributing the rest of the product. As the items are placed in their proper box, it can help to check that item off of the member’s receipt. Once all of the product has been split and distributed, it is a good idea to double check everyone’s box, making sure that all items on the receipt (that were delivered) are in the box. Now you’re ready for pickup.
Managing Pickup and Checkout
Member pickup can be an extremely social, fun time. That said, it’s also important that the process is organized as multiple business transactions will occur. The longevity of your buying club may depend on financial accuracy, especially in the beginning.
If you’ve opted to place each member’s order in a box, clearly marked with their name, the member shouldn’t have any issue finding their order. It can also help to put said boxes in alphabetical order. It is important to remind everyone that they should double check their order box with their receipt. This will help prevent any issue after they leave.
For checking out, you can have one or many people taking money. Sometimes it can help to have someone triaging the line, reminding people the payment options, who to make checks out to and fielding questions. This way, once a member reaches a checkout station, they are as prepared as possible.
As mentioned before, it depends on the size of your club and your preference, but generally its a good idea to have an organized means of tracking who’s paid what? This will be invaluable in the reconciliation step, instead of trying to remember who paid with cash or a check hours or days after the fact.
Some things to keep track of are member name, amount paid, if that amount is paying for other items such as past orders or another members order. Keeping track of cash, check or credit is also helpful. If you are collecting checks, be sure to note the check number.
Once all orders have been picked up and each member checked out one final and important part is left, cleanup. Regardless of if you’re renting, borrowing or own your space, its imperative that there be people tasked with cleaning the space after pickup and checkout. If possible, its good to have these cleaners be someone other than splitters or checkout people, as those people are normally fairly tired by this point.
Reconciling the Order
This less communal step is very important to the fiscal health of your buying club. Here, you want to make sure that the amount of money that came in from your members roughly equals the amount you have paid, or will be paying the distributor. Some things to consider are products that weren’t delivered, broken or spoiled products and any price changes in products after the order was placed. There are a whole slew of other possible hang ups in the reconciliation process, but if the checkout process was organized and well recorded, it shouldn’t be anything insurmountable.
If there are any discrepancies, you’ll possibly have to contact the distributor and determine a solution and/or alter credits or debits on a member’s account. Like any business, you’ll have to determine your own threshold when dealing with losses.
Hopefully this introduction to starting and running a buying club has been helpful. If you have any questions, please feel free to contact us.