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 gain a competitive edge over the national chains or majors.

We accomplish this goal by:

  • Establishing ongoing negotiations with Vendors to secure Volume Agreements for best buys, group rebates, better terms, and better profits.
  • Providing regional distribution centers commodity items purchased at wholesale levels. This gives Members better control of inventories and improves cash flow and 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 ensures all Vendor Partners are paid on time, further enabling 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 in 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 sent annually. This action allows the cooperative to be a zero-profit corporation for tax purposes.

With input from the IWDC staff, the board of directors annually establishes the formula for the actual allocation of patronage dividends. There are a few 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 2021, for example, results in a 90% cash return with 10% retained in an equity fund.

Each Member's share of total patronage dividends is 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, and then you can also contact the IWDC.

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IWDC Celebrates 30th Anniversary - Continues to Evolve as an Organization!

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