IWDC Co-op Model


The goal of the IWDC is to create an environment that allows our membership either to compete on an equal playing field or to gain a competitive edge over the national chains, or majors.

We accomplish this goal by … 
  • establishing ongoing negotiations with vendors to secure National Account Agreements for best buys and better profits.
  • providing warehouse commodity items purchased at wholesale levels. This gives Members better control of inventories and improves cash flow as well as the development of profit pools for annualized patronage dividends.
  • providing “value added service” for annual events such as the “Sales & Purchasing Convention,” workshops, roundtable discussions, and other educational opportunities.
  • keeping the cost of operations low and providing service and expense control items attainable only by large group participation. Examples are: office supplies, leasing companies, shipping, tires, business services, etc.
  • providing centralized invoicing, through which the IWDC receives Members’ invoices and pays our Vendor Partners per negotiated terms. This allows our Members an open line of credit and ensures all Vendor Partners of being paid on time, which further enables cost savings. IWDC Members also benefit by having the ability to pay multiple invoices with one check. Besides that, the IWDC passes along the discounted payment terms to our Members, thus increasing their benefits. 

Patronage Dividends

Patronage dividends are the dollars accumulated by the IWDC as profit from operations, rebates, and miscellaneous incomes.

Patronage dividends are paid annually by check with letters of allocation. Under co-op law, all the net profits of the IWDC must go to Member distributors either in cash or equity. The total patronage dividend distribution is reflected on Federal Form 1099-PATR for U.S. Members and form 1042-S for foreign Members, both of which are sent annually. This action allows the cooperative to be a zero-profit corporation for tax purposes.

The board of directors, with input from the IWDC staff, annually establishes the formula for the actual allocation of patronage dividends. Factors influencing the formula are the cooperative’s cash flow needs for inventory, special projects, and whatever may be necessary to grow the organization. Legal requirements and tax ramifications are also considerations. Dividends payable in 2011, for example, results in an 80% cash return with 20% retained in an equity fund.

Each Member's share of total patronage dividends are determined by each Member's participation in the established programs.
A Member's equity is capped at 8% of that Member's previous-year purchases through the IWDC.  Each Member's equity fund becomes available for disbursement in a timely fashion upon termination of IWDC membership 
As one IWDC Member put it, “We are the strongest, most organized group of independently owned welding equipment and gas suppliers in North America – if not the world.”

For more proof of that, explore our website, then contact the IWDC.

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