This is a very interesting question. Actually, we have mooted this
idea for some time now.
The rationale for cooperatives is as follows:
The stone prices are decided by mining conglomerates such as De
Beers. Thus, there is a limit to which discounts can be offered.
Prices depend on regularity of the orders and quantities play a
Small buyers can never hope to buy at the same prices that large
buyers manage. However, if many small buyers unite, they CAN wield
considerable clout, can't they? Therefore, we have said that buyer
alliances are the need of the hour.
Besides, buyer alliances are being favored all over the world by
small and medium enterprises. The buyers get better prices and the
manufacturers get higher volumes which is a pre-requisite for
efficient production and buying of raw materials. This creates a
win-win situation for both, the buyers and the manufacturer.
Else, the only solution for a small enterprise would be to buy from
a large manufacturer who MAY do them a favor by quoting good prices.
However, the latter are usually reluctant to deal with small buyers
due to production inefficiencies and also due to the fact that they
are guaranteed large volumes by the bulk buyers. Thus, there is a
very real reason why buyer alliances are being favored by small and
medium enterprises all over the world.
Next, please check out the links,
hese links talk about the way in which impoverished and illiterate
dairy farmers in some of the most backward regions of India came
together to form one of the largest cooperative movements in the
world. As a result, the farmers got more control that, till then, was
in the hands of the traders and middlemen.
Also, buyer/supplier alliances are gradually becoming popular all
over the world. Please search for 'buyer alliances' on Google and you
will see a lot of links that mention the benefits of such a strategy.
These articles mention the importance of buyer/supplier alliances for
better pricing, supply management, logistics' support and many other
Just my 2 cents.