Retailers' cooperative

A retailers' cooperative (known as a secondary or marketing cooperative in some countries) is an organization which employs economies of scale on behalf of its members to receive discounts from manufacturers and to pool marketing. It is common for locally owned grocery stores, hardware stores and pharmacies. In this case the members of the cooperative are businesses rather than individuals.[17] The Best Western international hotel chain is actually a retailers' cooperative, whose members are hotel operators, although it refers to itself as a "nonprofit membership association." It gave up on the "cooperative" label after some courts insisted on enforcing regulatory requirements for franchisors despite its member-controlled status. In microeconomics, economies of scale are the cost advantages that enterprises obtain due to size, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output. Often operational efficiency is also greater with increasing scale, leading to lower variable cost as well. Economies of scale apply to a variety of organizational and business situations and at various levels, such as a business or manufacturing unit, plant or an entire enterprise. For example, a large manufacturing facility would be expected to have a lower cost per unit of output than a smaller facility, all other factors being equal, while a company with many facilities should have a cost advantage over a competitor with fewer. Some economies of scale, such as capital cost of manufacturing facilities and friction loss of transportation an industrial equipment, have a physical or engineering basis. The economic concept dates back to Adam Smith and the idea of obtaining larger production returns through the use of division of labor.[1] Diseconomies of scale is the opposite. Economies of scale often have limits, such as passing the optimum design point where costs per additional unit begin to increase. Common lim ts include exceeding the nearby raw material supply, such as wood in the lumber and pulp and paper industry. A common limit for low cost per unit weight commodities is saturating the regional market, thus having to ship product uneconomical distances. Other limits include using energy less efficiently or having a higher defect rate. Large producers are usually efficient at long runs of a product grade (a commodity) and find it costly to switch grades frequently. They will therefore avoid specialty grades even though they have higher margins. Often smaller (usually older) manufacturing facilities remain viable by changing from commodity grade production to specialty products.Best Western International, Inc., operator of the Best Western Hotel brand, is the world's largest hotel chain, with over 4,195 hotels in over 100 countries.[2] The chain, with its corporate headquarters in Phoenix, Arizona,[3] operates more than 2,000 hotels in North America alone. Best Western has a marketing program involving placement of free Wi-Fi access hotspots in its hotels. Since 2002, Best Western International has begun creating an upscale brand for some properties located in Europe and Asia: Best Western Premier. By 2011 the chain's branding was modified; the basic Best Western name is now complemented by Best Western Plus and Best Western Premier properties offering progressively improved dining, recreation, and room guarantees.[4] The hotel descriptor categories are now used by Best Western hotels around the world. Unlike other chains, which are often a mix of company-owned and franchised units, each Best Western hotel is an independently owned and operated franchise. Best Western does not offer franchises in the traditional sense (where both franchisee and franchisor are operating for-profit), however. Instead, Best Western operates as a nonprofit membership association, with each franchisee acting and voting as a member of the association in the manner of a marketing co-operative.