For as long as I can remember, my mother was involved in a grocery club, locally referred to as “round” in Zimbabwe and “stokvel” in South Africa. These clubs are, are essentially groups of people, usually women, contributing money every month for a period of six months to a year either to
- Buy bulk groceries to share at the end of an agreed period, i.e every six months or a year; or
- Form an informal credit union that lends money to its members other people for an interest. At the end of the year the principal and interest earned is shared amongst all club members; or
- Give the monthly contribution, from all members, to one member every month to use as they please on rotation.
These clubs have been in existence for as long as I can remember and they are successful. Growing up, these clubs provided for my family in terms of groceries. My mother was able to buy big-ticket items and even helped finance for her second home. In a sense it is like getting an interest free loan; imagine that you have a group of twenty people contributing $1000 each every month, on your rotation you get $19000 and for the next nineteen months you pay it back without paying interest!
Most people contribute small amounts like $20 which over time adds up and allows them to buy basics in bulk at a better price than buying at retail prices.
That is easy to understand and administer but you could be wondering how to get started. I have some tips here that could help you:-
#1 Start a club with people you know
Start or join a club with people who you know in real life and trust. Family can work too but that can be tricky. I would be very careful about starting a club with people you meet online because you can never know their motives- there are scammers out there. Also make sure everyone in the club has a reliable source of income!
Having clear guidelines concerning the responsibilities of members and the ability to communicate these to all members is essential for a healthy functioning grocery club.
- Who is eligible for membership?
- What are their responsibilities?
- Are non-working members allowed? And if so, what is the impact on other members?
- Should a limit be set on membership?
- What if a member asked to leave the club?
- Are there any reasons that may cause a member to be asked to leave the club?
- Who should have the responsibility or authority to ask a member to leave?
#2 Share the work equally
The easy part is collecting the money. Grocery shopping takes time and it is hard work especially when buying in bulk. Do not let one person do all the work. Take turns to go shopping and everyone should be there to help share the groceries. Consider having tasks for the club members like these ones:
Coordinator – primary responsibility is to communicate and update members on any development and relevant information as appropriate, main contact person for distributors and general problem solving.
Membership Coordinator – keeps handbook up-to-date and orientation for new members.
Tasks Coordinator – makes sure tasks are filled, keeps track of members’ working hours, and assigns new members tasks.
Bookkeeper – collects payments and manages the group’s bank account.
Treasurer – works with the bookkeeper on group’s finances.
Distribution Coordinator – organizes distribution of groceries.
#3 Write down your goals
As I have mentioned earlier you can use the money saved for whatever you agree upon. Write down what you would like to achieve as a group and make sure everyone is on the same level.
For grocery clubs, agree on the brands that you are going to purchase. Since you are buying in bulk, you do not want to have lots of par-boiled rice when you would rather have basmati. Also remember to agree on the quantities.
#4 Who makes the decisions
Having a clear understanding concerning how decisions are to be made is very important to keep the club running smoothly and allows members to feel confident about the process. How will decisions be made?
- Who will participate in the major decision-making?
- Who will direct the group during the decision-making process?
- When or will the group be able to re-visit their decisions or renew their agreements?
- What happens if some members strongly feel the wrong decision has been made?
#5 For grocery clubs watch out for sales
For your money to go even further try to buy as much as you can when the product is on sale. Set a reminder for yearly sales like Black Friday or when OK has their Grand Challenge Promotion.
Make sure to check best-by dates and buy things that are perishable towards sharing time.
#6 Agree on any interest charged
If lending the money out to other people everyone should agree on the interest charged and how it is calculated. Members of the club can also get a loan.
#7 Obey the law!
In Zimbabwe these clubs are not regulated, but you may need to check the laws in your resident country. This is especially true if you decide to give out loans with interest payments, in some ways your club can become a small bank.
#8 Open a bank account
For large sums of money, I suggest opening a bank account with more than one signatory. I think in Zimbabwe there used to be cooperative accounts.
#9 Agree on a date to share the groceries or money
Choose a date when everyone will be available to share the groceries.
#10 Have fun
Throughout the year you will have to meet with the other club members for different purposes, use that opportunity to have fun with other members. Have a small party with your club members on the day that you share your groceries, celebrating your achievement.
To make all this easy, I have put together a free grocery club planner that you can you can use to record your information. It also has pages that you can use to make price comparisons from different shops as well as any loans that you may make out.
