September 1999 saw the birth of NEMEON. The new company is a purchasing cooperative in the roofing distribution industry. It was formed to provide pooled buying power and management support for Independent Roofing & Siding Distributors (IRSD). This business is styled after cooperatives serving other wholesale distribution channels such as plumbing, electrical, and gypsum.
Purchasing cooperatives are independent businesses coming together to combine purchasing power, in order to provide profit enhancement to its members.
Buying groups have been around for years. For centuries, groups have banded together to increase buying power and leverage. The cooperative model is reviving this age-old concept, giving small and mid-sized businesses a way to level the purchasing playing field. According to recent surveys, there are approximately 7.3 million small to medium-sized businesses in the United States. In order to compete in our new economy, these businesses need to utilize all available resources and technologies to gain every competitive advantage possible. The need to maximize purchasing power and reduce overall costs is critical in this era of consolidation and large-scale national chains.
It may be hard to imagine small to medium sized operations having the same purchasing clout as a Home Depot, but cooperatives have the ability to do exactly that. How? Aggregation of purchasing power. When a small business joins a co-op with other businesses that purchase the same goods, every one of them gets in on the preferred vendor agreements negotiated on behalf of the entire group, no matter how little they purchase. Members share in the net profits of their cooperative in proportion to their participation in the co-op.
Clearly, cooperatives help small businesses stay competitive by giving tools that will enable them to entice customers back from the giants. In fact, many believe that aggregation of buying power will help change the balance of power to a more level playing field between huge chains and independents.
For more information about NEMEON, contact us via phone, email, or regular mail today:
6043 Hudson Rd. Suite 350
Woodbury, MN 55125
Phone: (651) 788-7810
Fax: (651) 788-7807