Getting Started
Obtaining food and health products is one of the most common goals around which buying clubs are organized. The following information will give you some tips on how to start your own group.
1) What is a buying club?
A buying club is a group of people who purchase items directly from wholesale distributors, consolidating orders and payments, and then divide the items into individual orders. An essential part of this process is cooperation, which is needed to share the responsibilities and work involved.
2) Why form such a group?
A buying club offers its members savings by purchasing in bulk and eliminating some steps in the distribution process. It gives them more control over the source, variety and quality of food and natural products purchased, and an opportunity to educate themselves as consumers. It gives the group the chance to buy local products, encouraging the survival of regional agriculture and supporting local economies. Finally, a buying club gives its members a chance to meet new people and to feel a sense of community by working together.
3) How does the group work?
Four basic steps are involved: Individual members place orders with the group; the group consolidates the orders and buys the products from suppliers; the order is picked up or received by shipment; and the products are distributed to the individual members. Different systems can be developed for each step at the group’s discretion. The intricacy of the systems will depend upon the number of people involved; what and how much is purchased; and the frequency of orders.
Decisions to Make, Tasks to Share
1) What are our group expectations of a buying club?
It is very important that your group discusses its motives for forming. Ask yourselves key questions. Why are we doing this? How much time are we willing to contribute? What skills do we have to offer? How many members do we want? What size order can we place? The answers to these questions are vital to the organization process.
2) How will we divide and share the initial research?
You could form a group, dividing the work between families to research wholesalers, bookkeeping, necessary equipment and other requirements. Plan another meeting to share information gathered.
3) Will we designate a group organizer?
Often a person will assume this position if there is no designation. It is better to make this official and rotate the responsibility to avoid resentments and burnout. Your chosen organizer will be our designated contact for correspondence and will be responsible for distributing catalogues and information to your buying club members. This role can be rotated if you keep us up-to-date on the name and contact information of the individual. We need to be able to reach someone regarding matters such as shipping and invoicing during business hours.
4) What will we name ourselves?
We recommend naming your group and opening a bank account in that name to share the financial liability of a buying group. This is the name by which you will be known to us.
5) What kind of products do we want to buy?
Members should peruse our catalogues and list frequently used items to determine if some products can be purchased in case lots or bulk sizes. Note: Shipping costs and conditions may be a consideration for chill and frozen items.
6) How often will we want to buy?
Determine a buying schedule based on need, expenditures and season. Some buying clubs order every month while others order only once a year. Some buying clubs order seasonal items. Larger, infrequent orders will require that members pay larger sums all at once rather than spread expenditures over time. Larger orders cost less per pound to ship but will require a larger vehicle for pickup.
7) How will we get the order to the distribution depot?
Many buying clubs pick up their orders at our warehouse. This manner is the least expensive for those nearby groups with the time and vehicle required. Arriving prepared to transport any frozen and cooler items that members have ordered is important. We calculate the freight charges to the nearest urban centre for those groups whose orders we must ship, if the order meets the minimum for subsidized freight. We will bill additional freight charges for orders sent beyond these areas directly to the buying club. Freight is charged by the pound with higher charges for cooler and freezer items. For more information regarding our freight policies, see Pages 2 and 3 of our Buying Club Catalogue. The manner in which truckloads are batched may result in orders taking several days to arrive at remote locations. When arranging for setting up the depot and providing people to receive the order, please consider that often drivers cannot be pinned down to specific delivery times. Picture ID is required for depot pickups.
8) Where and when will we divide and distribute the order?
Many small groups use a member’s home. Others use a church kitchen or community centre. If you utilize a space other than a retail store to receive orders, most trucking firms charge a home delivery fee to compensate for the extra unloading time.
9) What equipment will we need?
An accurate scale is vital if you are purchasing items in bulk (i.e. grains, flour). Grocery stores that are closing or changing systems may be a source for larger scales. Other necessities may include felt pens, a calculator, bags, scoops, reusable bags, tape, knives and possibly a refrigerator/freezer. Members and other friends could pool their resources to provide these items.
10) Will we charge a membership fee?
Membership fees are useful for buying equipment and demonstrating commitment to the group. You could charge a fee per household (e.g. $5.00–$25.00 depending on order size) or per order. Another option is to charge a mark up on products to cover the cost of supplies. The weight of each member’s order can be calculated from our invoice, and the freight divided proportionally to disperse shipping costs. Many clubs find it easier and almost as accurate to divide freight by dollar value of each member’s order.
11) How will we divide the work? How will we handle ordering procedures?
How will we pay? What bookkeeping system will we use? How will we organize the break down and distribution of the orders? Any group faces the danger that a few people will assume all the responsibility and burn out as a result. The group may cease to function if these people are not present. If groups clearly define, organize and share work responsibilities, operations should run smoothly. A small stipend or other recognition of the additional work of your club’s main organizer is something to consider.
12) Is it working?
After placing a few orders, meet to discuss how your systems are working. Set up a WhatsApp group or Teams/Zoom meetings to stay in touch. Many clubs start enthusiastically but fade away within a year because a few people are doing too much or a problem in the organizational details makes the work too complex. Assess whether the club is meeting people’s expectations. Is it working? A professional, kind, uncomplicated approach to organizing your club will greatly improve your chances for long-term success.
Systems
1) Payment Handling Systems
Pre-order/Prepayment
Members order and pay for purchases before the group orders from the wholesaler. Adjustments for price changes or out-of-stocks are made at the time of pick up. This is achieved by paying/refunding the difference or by crediting/debiting the member’s account for the next order. Although the administrative work is a bit more involved, prepayment ensures that the members will pick up food for which they have already paid.
Pre-order/Payment at Pick-up
Members pay for their orders at distribution. This system requires that the group have the initial funds to purchase the food from wholesalers. This fund usually comes from refundable membership fees or shares. When your group is well-established, you can submit a credit application so that we can arrange payment terms of 7–15 days from receipt of an order.
2) Ordering Systems
Horizon Grocery + Wellness publishes two hard copy catalogues each year and distributes updates monthly via email by request. Use an Excel catalogue as a master order form or develop a form that each household can utilize. Be sure that each member has a copy of their order and keep copies for the bookkeeper as well. Occasionally, we will make a mistake for which an adjustment is required. The main ordering person should keep track of any corrections so that they can be handled in one email or call, instead of having several members contact us.
3) Distribution Systems
When receiving or picking up a shipment, please check and count the order. For freight claims, you must note any discrepancy (eg. missing pieces, damaged goods, spoiled frozen products) on the bill of lading and have the driver acknowledge it with a signature. Neither Horizon nor the shipping company can accept a freight claim for freight-related problems which have been accepted as delivered without notation. Requests for freight claims, credits or refunds must be reported to our office within two working days of receipt of goods. Members should familiarize themselves with the entire text of our freight, credit and payment policies as stated on Pages 2 and 3 of the Horizon catalogues. Keep a record of the total goods received by each member and a copy of the member’s original order for bookkeeping purposes.
Team System
A break-down team breaks down cases, weighs and bags items and fills orders for all the members in advance, labelling boxes and bags with their names. Members pick up their orders at specified times.
More information can be found on our Buying Club Information PDF.