Increased clout in the marketplace. Marketing on a cooperative basis, like maintaining ownership of the product as it goes through further processing and like purchasing supplies and services, permits members to combine their strength and gain more income for the members while maintaining their status as independent business people. They can lower distribution costs, conduct joint product promotion, and develop the ability to deliver their products in the amounts and types that will attract better offers from purchasers. Share in the earnings. This isn't totally accurate.
Most cooperatives generate earnings.
They differ from non-cooperative firms in how they allocate and distribute their earnings. Typically, Ms. Jones would receive her allocation, called a patronage refund, partly in cash and the remainder as an addition to her equity account in the cooperative. Permitting their cooperative to accumulate retained patronage refunds is a relatively easy and painless way for members to help finance activities and growth. Also, if certain rules in the Internal Revenue Code are followed, the cooperative may deduct both the cash payouts and the retained patronage refunds from its taxable income. This makes cooperative earnings particularly valuable.