Increasing Your Profits Through Buying Groups - Strength In Numbers

What’s Their Financial Structure?
Buying groups often use their manufacturer rebates to pay their operating expenses, and divide the remainder among themselves. Since the rebates are found money — money the members wouldn’t have anyway — no one misses them or minds using them to cover business overhead. They also charge a fee to join and participate in their benefits, as well as membership dues.

Most buying groups just break even on their investment — their purpose is saving money, not making it. Whether or not you expect to make money is one of the primary factors in deciding how to structure your group. A C-Corp and an LLC (limited liability company) are the most common legal structures for a buying group and generally the most practical. If you’re starting a new group, make sure you talk with your attorney about which one is right for you.