The Dairy Trader scheme, set up in February by transport provider Oakland International and supply chain consultant Dairy Trader, has recruited 30 members and says new businesses are signing up every week. It has turned over £1.3m since its launch and aims to reach £2.2m by the end of its first year of trading.
Oakland MD Dean Attwell said the business had cornered a niche in the market by making small drops to businesses that were too small to deal directly with suppliers, and which would otherwise rely on wholesalers that took a bigger margin.
"It's a collective buying arrangement," he said. "We have not got the overheads of a central office. We have a very low and transparent margin of about 1% so we are relying on volume. The marketplace is big enough to warrant its own supply chain solution. We spotted it and no-one else did. Members don't pay to join; we ask them to support us by buying from us on a weekly basis."
Dairy Trader relies on Oakland's contacts in the logistics industry to put products, which can be as little as a single pallet, on to lorries that are already delivering in the area.
Oakland owns no trucks and instead pays third-party logistics providers to deliver the products from its Redditch warehouse. It plans to attain Carbon Trust accreditation for its business and become the first carbon-neutral transport provider by 2013.