Co-ops 101 (aka Co-ops for noobs)
by, 03-26-2014 at 08:10 PM (296 Views)
What is a Co-op:
A Co-op is where a group of people collectively combine their money to make a large purchase.
Why do people do Co-ops:
By combining funds, a large purchase can be made at wholesale prices. These wholesale orders usually have MOQ (minimum order quantity) requirements to qualify for the wholesale price. Co-ops are also used where a given product may simply not be available at the Retail level in the small quantities that an individual would reasonably require.
What is a "Host"?
- Every Co-op must be "Hosted" (i.e. coordinated) by a single person who will be responsible for it. Hosts are the individuals who volunteer to:
- Research a source
- Take the Orders
- Collect the money
- Place the order
- Receives the goods
- Distribute the goods
- And a variety of other tasks along the way.
- ECF has certain Rules governing who is allowed to host, and how large of a Co-op ($$ wise) they are allowed to do. I am not going to quote the Rules as they are subject to change, you can find these Rules here: CO-OP Rules - Updated Often & Without Notice
How does the process work?
While every Host does things a little differently, this is generally the process that is observed on ECF:
- An "Interest Thread" is started.
- This is where a product is discussed in the CoOp Planning and Discussion Forum to see if there is enough support to pursue a large wholesale purchase. ECF governs what types of products can be offered. Most things are allowed but there are some restrictions. For the current rules see: CO-OP Rules - Updated Often & Without Notice
- The thread might be started by a Host who wants see if there is enough support for his co-op idea, or it might be started by an ECF member who is trying to see if a Host would be willing to take it on.
- Interest (support) can be expressed by ECF members differently depending on the thread. Members might be asked to voice their support via a "Me too!" post, or by adding their name to a running list within the thread, or by signing up for an "Interest List" hosted on Google.
- Members will either express enough interest for the Co-op to move forward, i.e. enough support to reach MOQ, or after a while the Interest Thread gets closed and the Co-op doesnt happen.
- A "Co-op" is Submitted.
- Once a Host has committed to running a coop, and is confident that there is enough interest, the Host will do all of the homework to determine the final pricing. This includes the cost of the product(s), cost to get it shipped to the host, cost for the Host to ship it to the participant etc. Often there is a small "incidental" charge added to cover packaging materials etc.
- The Host will then "Submit" a Co-op request for approval by the ECF Mods. This request will include a requested "Go-Live" time for the Co-op to actually start.
- The Mods will double-check all of the math and make sure the product(s) meets the ECF Co-op standards. They will then either approve or decline the Co-op.
- A Special Circumstance: Currently, ECF rules do not allow a Host to start taking orders (or hold anyone's place in line) until the Co-op has been approved by ECF and opened in the Active CoOps Forum. A problem often encountered is that some Co-ops fill up VERY quickly. The MOQ is reached or the Host's $$ limit is reached within hours or minutes. The Co-op went "Live" but sells out before the people who expressed the initial interest have a chance to sign up. The end result being that some of the people who encouraged the Host by committing to participate are left out in the cold.
- A method that some Hosts are using to give Interest Participants a fighting chance is called "Advance Notice". They keep the Co-op start time/date a secret from the ECF public, but send the information via a private PM to those who participated in the Interest Thread. This allows those who helped get the Co-op kick-started to be able to be "Johnny on the spot" when the Co-op goes live.
- The Co-op "Goes-Live".
- If the Co-op is approved it will then "Go-Live" at the time/date requested by the Host. This means it will appear as a thread in the Active CoOps Forum.
- "Verified" ECF Members are then welcome to sign up to participate in the Co-op.
- Participants should:
- Read the Opening Post thoroughly! It will detail any available options, pricing, terms & conditions, etc.
- There will be a Form or Spreadsheet linked in the Opening Post for you to fill out with your desired order.
- Wait for MOQ to be met. In other words wait for enough people to sign up to satisfy the MOQ established by the Supplier.
- Once MOQ has been reached, the Host will likely accept a few more participants as "Backups" in case any of the other participants cannot pay. At this point the Host will close the Co-op to any new participants.
- The Host will then Invoice the participants.
- The Invoice will give you instructions on how to pay. You do not need to pay anything until you receive an invoice!
- Once all participants have paid, the Host will place the order with the Supplier. If anyone doesnt pay a "Backup" will be offered their slot.
- Now you wait (the hard part). The Host will keep the participants updated as to the status of the order, and any changes of status. Often banter will occur in the Co-op thread to keep everybody entertained while they wait.
- The Supplier will ship the goods to the Host.
- The Host will repackage the goods and ship them to the participants.
- Co-op Etiquette:
- Remember that the "Host" is donating his time and labor. Hosts are not allowed to make any profit in an ECF Co-op for the service they are providing you.
- It is very inconsiderate to sign up for a Co-op and then back out once you receive the Invoice. The Host was counting on your order to meet the MOQ and must now scramble to replace you.
- Consider your Order carefully BEFORE you place it. Asking for changes to your order after the fact puts additional work on the Host.
- The Host establishes and maintains the "tone" of the thread, respect that.
- Try to avoid PMs to the host during the opening hours of a Co-op. The Host is quite busy during this period. It is better to post your question in the Co-op thread. Someone else might be able to answer it, or someone else might have the same question and appreciate seeing your answer - saving them from having to ask.
- Respect for the Host, and for the other participants is expected. Foul language, insulting remarks, trolling, etc. are taboo.
- Off topic posting, unless encouraged by the Host, is frowned upon.
- Any mention of buying/selling, particularly of the Co-op items, is taboo.
- Linking to the Co-op outside of the ECF Co-op Forums is forbidden. There are many Vendors who dont like Co-ops as they feel it takes business away from them. These Vendors love to identify Co-ops and pressure the Suppliers into cancelling the order.
- Leave "Feedback" for your Host after you have received your goods and are satisified. Remember that the Host did a lot of work for free so that you could get a good deal on something, the least you can do is thank him/her.
- Co-op Risks:
- There are risks inherent in participating in a Co-op. By participating you are accepting those risks.
- Be aware that many Co-op items can have long delays in delivery time. New and hot items are often backed up in manufacturing. Also shipping can be delayed by the postal system, a very common occurrence during Chinese or big International holidays. In either case this is not the Hosts fault, is just an unfortunate part of Co-op logistics.
- The shipment, particularly if from overseas, could be stopped and held by US Customs. In extreme cases the goods might be confiscated.
- The goods might not be manufactured as expected, or the information given to the Host by a Supplier might have been misrepresented. For example, the product might be brass instead of SS, or green instead aqua. Legitimate language barriers and misunderstandings come into play here as well.
- Your item might be a DOA, or manufacturing defect. Sometimes a Host will order "extra" items to cover any DOAs that might occur. Pay attention to the Opening Post to see if extras were ordered. If extras weren't ordered, or if there were more DOAs than extras, there is no guarantee you will get a replacement nor will you get your money back.
- The Host might skip town. (This has happened)
- Paypal is under political pressure not to support the US Ecig market. Someone might have mentioned ecigs when paying. Paypal then freezes the account of the Host, and all of the funds in it. This can take days or even months to straighten out.
- If any of the above happens there is no guarantee that you will get your money back. ECF does not guarantee anything, and the Host does not guarantee anything out of his/her control. There are no guarantees.