Types of Cooperatives

There are five types of cooperative businesses and they serve many different needs. In fact, the are 30,000 cooperative business in the United States with more than 100,000 million members! And they all operate under the same basic principles—the Seven Cooperative Principles.

You can get more detailed information on how cooperatives are organized by type and sector on the NCBA website in addition to the information below.

Five Types of Cooperatives

Cooperatives can be formed for individuals, businesses or communities and are there five types of cooperative businesses:

• Consumer
• Producer
• Worker
• Purchasing/Shared Services
• Hybrid

Consumer-Owned Cooperatives

Consumer cooperatives are owned by the people who buy the goods or use the services of the cooperative. Consumer co-ops include credit unions, child care cooperatives, electric and telecommunications cooperatives, food co-ops, health care co-ops, housing cooperatives, and many more.

It is the most common form of co-op and is organized by individuals who seek to purchase goods and services. By organizing a cooperative, consumers are able to achieve prices and quality not available from for-profit businesses. Get more details and examples of consumer-owned cooperatives.

Producer-Owned Cooperatives

Producer cooperatives are owned by producers of farm commodities or crafts that band together to process and/or market their products. Purchasing or shared services cooperatives are cooperatives whose members are businesses that join to improve their performance and competitiveness. This form of co-op is most common in agriculture, where farmers often must band together to survive in an industry that is increasingly industrial and centralized. Before cooperatives were organized, farmers were often trapped in a situation in which processors could dictate the prices paid for crops. Get more details and examples of producer-owned cooperatives.

Worker-Owned Cooperatives

Worker cooperatives are owned and democratically governed by their employees. They operate in numerous industries, including childcare, commercial and residential cleaning, food service, healthcare, technology, consumer retail and services, manufacturing, wholesaling and many others. Some 300 worker co-ops throughout the U.S. provide their employees with both jobs and ownership—allowing them to directly benefit from the financial success of the business. Get more details and examples of worker-owned cooperatives.

Purchasing/Share Services Cooperatives

Purchasing and Shared Services cooperatives are owned by small, independent businesses, municipalities or other like organizations that band together to enhance their purchasing power. Members of these cooperatives have found that they can adapt quickly to changing economic conditions rather than become victims of them-they can lower their operating costs by pooling purchasing power for goods and services. Get more details and examples of purchasing cooperatives.

Hybrid Cooperatives

Co-ops are generally made up of people with a common interest, but that hasn’t stopped some innovators from developing multi-stakeholder hybrids, which seek to balance the sometimes conflicting needs—for example, between consumers’ desire for affordable products and producers’ desire for higher prices for their goods. In many cases, this is tied to members’ dual roles as producers and consumers, most often in agricultural co-ops, but not always. Get more details and examples of hybrid cooperatives.