The short answer: they’re usually trying to re-invent the wheel.
Very small presses have a hard time exposing readers to their books. We all know this. And inevitably, discussions of this issue cause someone to suggest a co-op as a solution. Such a co-op could try to sell directly to readers, or to bookstores, or to Ingram. It could even be a purely sales and marketing organization that never handles a single book. Let’s look at those:
Selling directly to readers: This has to be web-based, or it’ll be much too expensive. That wheel’s already been built. It’s called Amazon. It’s so easy to get a small presses’ books onto Amazon itself, that this seems pointless.
Selling to retailers: This wheel is known as a wholesaler, or possibly a distributor. The co-op will need to give the retailers reason to bother with its catalog, and it needs to make the ordering, payment and service as convenient, quick and inexpensive as they are with Ingram, NBN, etc. And building that capacity is expensive. Building the response time and consolidating shipments from all the different publishers requires a warehouse. So the practical version of this option is another small press distributor. That has huge economies of scale, so the chances that you can match the current distributors’ services and prices are slim. Still, another distributor isn’t a BAD idea. Necessarily. It’s just not a NEW one.
Sales and Marketing Only: One version would be to contract with a copywriter or a publicist, and create campaigns at a lower cost. In-house publicity is less expensive because the publicist is constantly working, and doesn’t need to spend time running a business or marketing her/his services. This would give the small presses the opportunity to share an in-house publicist. It could be useful. It could also be a disaster. It will work best if all members of the co-op have similar types of books, rather than a similar geographic location or other characteristic in common.
Of course, there are other types of marketing co-op, such as the mailings done by PMA, or Florida Academic Press, or several other organizations. That can work, although publishers report mixed results.
Or there could be a joint catalog, one that might have more interest for bookstores than any single publishers’. Or even a central ordering website and shopping cart. The problem would be in administering the payments, and in customer service, if the publishers shipped separately. And, of course, it would have to give better discounts to stores than the wholesalers do, since the shipments wouldn’t be consolidated and the convenience would be less.
And all of this requires that the books be of sufficient quality and have a significant appeal to the reading public. And there’s the rub. Many small presses are run by people with minimal experience in publishing. Their judgment may not be good enough to ensure that the books are packaged and tuned for their markets. And worst of all, the successful small presses in this mix will tend to grow out of the need for it, meaning that keeping it vibrant and appealing would be a constant problem.
In short, most versions of a co-op are a perfect illustration of the old saw: For every problem, there’s a solution that’s simple, obvious, appealing . . . and wrong.