As the current economic crisis worsens, many businesses in Perth are joining buying groups or co-operatives as a means to ensuring they are getting competitive prices.
THERE'S strength in numbers.
For that reason, and as the current economic crisis worsens, many businesses in Perth are joining buying groups or co-operatives as a means to ensuring they are getting competitive prices.
Burswood-based co-operative Capricorn Society, established in 1974 to assist the automotive repair and service businesses, added 1,000 new members in 2008 alone.
South Perth-based buying group Wesbuilders, which serves members operating in the residential housing market, has grown from 13 in 2004 to almost 100, adding 24 last year.
National buying group Leading Edge Group has become one of the largest retail entities in Australia and now has 1,300 retail shop fronts throughout Australia and New Zealand.
Capricorn chief executive Trent Bartlett said the group acts as an intermediary in the automotive value chain, facilitating strategic partnerships between its members and leading automotive suppliers.
The group has a share ownership structure where businesses must buy 500 $1 shares to join, allowing them to share in dividends and enjoy rebates for purchases.
"A lot of buying groups band together and they might get a discount off their invoice, but a lot don't work the same basis as Capricorn because most co-operatives I think pay a dividend, but they don't pay a dividend and a rebate," Mr Bartlett said.
"A lot of buying groups certainly wouldn't guarantee the debt of their members like we do to suppliers.
"That's part of the importance of the model, especially in these current economic times."
There are more than 12,000 automotive businesses, auto electricians, paint and panel shops, mechanical workshops, auto transmission workshops, and service stations using Capricorn, which buy $800 million in parts each year from 1,300 preferred suppliers.
Wesbuilders allows members access to a range of products and services, offering benefits based on the volume of buying them direct through the co-operative.
Wesbuilders has a conventional board of directors, where shareholder liability is limited and each member has equal voting rights.
Wesbuilders company secretary Peter Wells said the board's vision is to be the members' preferred supplier of materials and services, and the provider of a fully integrated business system that creates and delivers wealth to members.
"While we have had growth in past five years, it's been a managed process. We want active participation from members who are reputable and provide quality, we're not in it for just pure membership numbers," he said.
In 1987, Car Craft Panel & Paint Ltd was formed by five WA body repair business proprietors with a vision to establish a network of professional businesses to lift standards in the body repair industry and to set best practice benchmarks.
Car Craft general manager Noelle Simons said to be invited to join the tight-knit group of 28, businesses must meet certain standards, including meeting minimum equipment and customer service levels, as well as have professional business systems, a dispute resolution process and a safe working environment for staff.
"It's not just a buying group it's a group of repairers who are considered to be some of the best in the business," she said.
"Apart from the networking opportunities, and that's a big issue for a lot of our membership, they're part of a group of businesses that are willing to share their experiences, and there's a mentoring factor too.
"While members achieved buying power being part of the group, the objective of Car Craft is to raise the standards of motor body repair market."
Other successful buying groups include Buyers Independent Group Australia, which has grown to 80 members Australia-wide including 12 in WA, servicing the plumbing, bathroom and building supply sectors, and Gemcell, Australia's biggest independent electrical wholesalers group, which has 131 member outlets including 21 in WA.
