Why are consumer cooperative stores considered to be less expensive? What are its relative advantages over other large scale retailers?
Consumer cooperative stores are considered less expensive primarily due to the elimination of middlemen. These stores purchase goods directly from manufacturers or wholesalers and sell them to members and others. This eliminates intermediaries who increase costs at each stage, resulting in lower prices for consumer goods. Additionally, these stores normally sell on cash basis, which reduces the requirement for working capital and eliminates the problem of bad debts.
The relative advantages of consumer cooperative stores over other large scale retailers include ease in formation. Any ten people can come together to form a voluntary association and get themselves registered with the Registrar of Cooperative Societies by completing certain formalities.
Another significant advantage is limited liability of members. The liability of members is limited to the extent of capital contributed by them. They are not personally liable to pay for the debts of society beyond their contribution.
These stores follow democratic management through management committees elected by members. Each member has one vote irrespective of the number of shares held, ensuring equal participation in decision-making.
Additionally, consumer cooperative stores are located at convenient locations where members can easily buy products. The profits earned are utilised for declaring bonus to members and strengthening reserves, directly benefiting members.
Explanation
The answer addresses both parts of the question. For why they are less expensive, the context clearly states that elimination of middlemen and cash sales reduce costs. For advantages, the context lists ease in formation, limited liability, democratic management, lower prices, cash sales, and convenient location as key advantages. The answer stays within the word limit and uses only information from the provided textbook context.