Making the Business Case for Cooperative Membership
When it comes to cooperative ownership, we’re asking everyone to take a bet on a collective vision and make an investment in a shared future. Even with a minimum contribution of $10USD, we recognize this is NOT a small ask. That’s why in this post we’re going to make the business case for Artisans Cooperative.
Why Artisans Cooperative Needs Money
Artisans Cooperative needs money now for startup costs, as detailed in our Funding Plan. The main costs are:
- Technology: software services, website developers, and maintenance fees
- Marketing: to create a critical mass of artisans and shoppers
- Operations: legal, accounting, insurance, and someday soon: staff to run day-to-day operations (who will have the option to be worker-owners!)
The give and take of collective work is really interesting. For example, right now Artisans Cooperative has a set of startup costs needed to build the platform. But our maintenance costs are much lower. It takes a lot more energy to get the plane off the ground than to keep it in the air.
Raising these funds from our members instead of outside investors matters, just like it matters who the trillionaire is that’s in control at Big Tech companies. When members are the owners, members keep control: they get to set the fees and decide what’s on the agenda, democratically.
We offer payment plans and non-cash “points” options so that anyone can join, and when members contribute their hours, that reduces our overhead, lowering our costs. We value all contributions equally in our Points & Tiers system. But the reason we’re asking for 1000 points ($1000USD) for artisans, and 100 points ($100USD) for supporters – with an option for additional investments – is that we need that critical mass of funds to lift us off the ground.
What Members Get For Their Money
The reason cooperatives exist is because the members value the business or service highly – so highly that they don’t want to sell it out and risk losing it. For example, food co-ops had a renaissance in the 1960’s because their members wanted access to hard-to-find natural foods that simply weren’t being stocked at the big chain groceries. Those big chain groceries would have bought the competitors and closed them, but the members wanted food choice more than they wanted a return on their investment: this is choosing quality of life and people over profit.
Artisans Cooperative still offers a compelling business case for those that value its service: an authentic handmade marketplace to sell and shop on.
For artisans, the most compelling financial reason to become a member is lower sales commissions. Founding Artisan Members get the same commission that Etsy currently offers for its transaction fee (6.5%), but Etsy charges way more fees on top of that. With Artisans Cooperative, we have a simple fee structure: sales commission + payment processing fees, nothing more. Most importantly, as a cooperative, we intend to lower the sales commission after we’ve gotten on our feet: a move that no stockholders would ever decide to do, but our members get to decide for themselves.
To help you figure out when the sales commission pays off, we created a “Breakeven Calculator” for artisans. This calculator helps you estimate how many sales you’d need to make to “break even” on the membership buy-in (even though the buy-in is an investment, not a donation, which is eligible for return).
In other words, the Breakeven Calculator tells you, “We estimate that you’ll pay for the membership with ~## sales.” Make a copy of this Google Sheet and input your expected sales to see what works best for you:
Artisans also get additional marketing benefits and visibility on the marketplace as an engaged part of the community:
- Priority access to handmade verification: be “Verified” on our launch day
- Special marketing promotions with a search filter label and top billing for our launch, timed for the holiday shopping imperative
All members also get:
- The opportunity to be involved in the design, testing, and beta launch of the marketplace
- Behind-the-scenes access and a direct communications channel to the General Circle and interim Board of Directors through a dedicated Discord channel
- The knowledge that they are proactively creating a social good that puts more money into artisans’ pockets, and a highly-valued service that they want and need
Why Members Should Invest Now for the Future
If you highly value the service we’re building, Artisans Cooperative is offering a compelling vision that nobody else is offering: for both artisans and supporters. We’re putting everything we’ve got into this, and if we don’t succeed, then this kind of momentum is unlikely to occur again anytime soon.
Ultimately you need to run the numbers for yourself, but if you are on the fence about whether to join now, or wait and see, we’re hoping there are a few things that will help convince you:
- You can leave at any time. As long asArtisans Cooperative does not fail or go bankrupt, you can leave the Co-op and get your money back. Shares are bought back by the Co-op. If you’re on a payment plan, you can simply stop paying.
- For artisans weighing this against their own website as an alternative to Etsy: membership is more affordable on our payment plan than a Shopify subscription and a lot less work. (For example, if you pay for Shopify annually, their cheapest plan is $29/month, and would go on forever; whereas Artisans Co-op’s lowest payment plan for Artisan buy-in is $20.83/month, and would end in 48 months….and can be shortened by earning points through member activities.) Plus, we’re bringing customers to you, whereas on your own website, you do all the marketing/advertisement work to bring in customers.
- The hidden costs of Etsy and other Big Tech alternatives are getting worse. We don’t bring this up to throw shade, but instead to state a reality. Selling on Artisans Cooperative will already be more affordable than on Etsy. Etsy’s costs are rising and its practices are getting more and more opaque for sellers. These aren’t the values that the company started with, and they aren’t the values that Artisans Cooperative will ever subscribe to.
Sociologist Joyce Rothschild calls organizations like ours “collectivist organizations”—members run their operations using democratic practices while pursuing goals beyond profit.
That’s our goal at Artisans Cooperative as well. We are different from all the other handmade marketplace start-ups out there. For one: we won’t sell out to Etsy like Depop, Elo7, and DaWanda did – unless our members vote to! For two: we’re the only platform offering:
- Profit sharing
- An inclusive community
The Future is Cooperative: Join Us Today!
About Artisans Cooperative
We are growing an online handmade marketplace for an inclusive network of creatives: a co-op alternative to Etsy.
Shop the marketplace!