Advantages of the cooperative society

The advantageous factors of the cooperative type of organization are given below

Elimination of Middlemen

The management of the consumer cooperative society directly purchases the finished goods from the manufacturer and producer. Producer Cooperative society procures the raw material from the producer. Thus they try to free themselves from the grip of the middlemen and make the goods available to consumers at lower prices.

Saving in Management Expenses 

Cooperative society enjoys some economics in the field of management due to voluntary services performed by the members themselves. Thus, it is possible to minimize the expenses of management and supervision. 

Minimum Stock 

Society Purchases the same goods which are actually demanded by its members. Thus there is need to have minimum stock at hand due to constant and regular demands.

Economy in Distribution and Production Expenditure 

Society is saved from any distribution and production expenses. It has got its regular customers, therefore society has not to face any trouble for marketing its goods. Thus it has not to incur any expenditure for publicity and advertisement, I which is a big item in the budget of the capitalist producer.


Under this type of organization, complete integration between producers, wholesalers and retailers is always possible. This is thus a clear advantage over capitalist economy.

Employment Opportunities 

Thousands of people are engaged in different types of cooperative small scale and cottage industries. Thus it removes the problem of jobless persons in developing countries.

Reading: Factors before Business

Equal Distribution of Wealth 

With the growth of the cooperative society wealth has not been concentrated into a few hands. Thus this factor tends to equalize the distribution of wealth in the society.

Educative and Social Value 

Spirit of sacrifice, sense of mutual help and self help are developed among the members. They are able to adopt the principles of honesty and unity. It thus creates the economic and social aspects of human life among the members.

Financial services 

It renders financial services for its members for the purchase of seeds, manures, implements and house etc. It thus removes the financial problems of the member of the society.

Taxes Facilities 

Government provides certain concessions to this form of organization i.e. exemption from stamp duty, super tax, income tax and registration fees.

Improvement of Standard of Living 

Its main aim is to bring about greater benefit for its members. It supplied daily necessities of life to its members at the lowest prices. Thus it is helpful for the improvement and progress of standard of living.

Equal Status 

It is a democratic organization where at members enjoy equal voice in the management of the cooperative business. 
Reading: Partnership Disadvantages

Extensive Market 

As the goods are supplied to its members at cheaper rates, the general public is attracted to become the shareholders of the society.

Rural Development 

Cooperative organization renders public utility services such as village communications, sanitation, water supply, drainage, education and undertakes the supply of various implements to the farmers.

Encouragement of habit of Saving 

Cooperative society supply the goods to its members at cheaper prices. It thus creates the attraction in the general public for becoming shareholders of the society. This tendency encourages the habit of saving and investment.

Miscellaneous Advantages 

  • It helps to eliminate the evils of capitalism from the society. 
  • It increase the business and economic activities in the country. 
  • It promotes the welfare of the community.


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