Cooperatives are categorized in two ways: by type and sector. Cooperative “types” are based on their ownership structure and function. The two main types are consumption and production, and each of these can be organized among individuals or organizations.
Consumer co-ops may be formed by individuals or businesses, and in the latter case they are often referred to as “purchasing” or “shared service” co-ops. On the other hand, producer co-ops include both those formed by businesses – often called “marketing” co-ops – and “worker” co-ops whose members are individuals. Some co-ops are hybrids, combining elements of more than one type of co-op.
Each type of co-op has many subcategories and some co-ops contain elements of both types. For example, an electric cooperative falls into the consumer type because the consumers in the service area of that electric co-op own it. Of course, many businesses are also members of electric co-ops. However, in some cases electric co-ops and other utilities form purchasing co-ops to generate or purchase the power they distribute to their members. This is sometimes called a second-level co-op, federated co-op or federation.
The chart below shows the ecomonic impact for each type of cooperative.