To counter competition from big box retailers, independent lighting stores are banding together in a cooperative called Lighting One. The coop enables members to reduce costs through joint purchasing and gain access to services and expertise that otherwise would be unaffordable.
“Lighting One puts us on a level playing field with the big boxes,” says Marilyn Shulman, second generation owner of Bayshore Lighting, a 60-year-old lighting store in Long Island, New York.
The coop was founded under the name Ilucio in 1999 by Jeff Carmichael, former owner of a lighting showroom in Chattanooga, Tennessee. Ilucio grew steadily but slowly at first, struggling with the chicken-and-egg problem of needing a critical mass of members to offer the price reductions and other benefits necessary to attract members.
Then in 2001, Ilucio linked up with CCA Global Partners, the parent organization of Carpet One, a very successful coop of more than 1,000 independent flooring stores. The partnership allows Ilucio, renamed Lighting One, to tap into Carpet One’s sizable resources, staff, and expertise.
With expanded services, Lighting One grew rapidly and now include 75 stores and expects to top 100 stores before its convention in June. The coop screens new members, allowing only established stores and generally limiting membership to one store in any given market area. Members put up $15,000 in initial capital to join (payable over three years), plus $299 per month. They receive stock in the coop and a percentage of any returns. As co-owners of the venture, members each have one vote and direct the governance and operation of the coop.
The membership investment has paid off many times over, according to Shulman. “Before this, things were getting really tight.” Lighting One has negotiated better terms and prices from suppliers, as well as lower rates from American Express. Bayshore Lighting’s rate dropped from 3.15 to 2.65 percent. Through its partnership with CCA Global, Lighting One also offers members reduced rates on insurance, including a health insurance plan for store employees.
The coop provides extensive, on-going training programs in sales and management for both owners and employees, and has also hired top consultants to advise members on merchandising, store design, and marketing. Other services include a private label credit card, which allows members stores to offer customers the zero percent financing now common at many chains, and print and television ads that can be customized for local markets.
Lighting One will soon unveil a line of private label products—unique lighting fixtures that will be available only at member stores. “That’s a big advantage in our industry,” says Shulman, noting that it’s hard to compete with megastores selling identical products. Independents, she believes, should be able to gain an edge by staying ahead of new consumer tastes and trends.