In 1938, a young man named Lloyd Anderson wanted to buy just one ice axe in Seattle. It was a simple metal tool for mountain expeditions. But local stores either had nothing suitable or charged prices that made the purchase seem nearly impossible. So Lloyd, together with his wife, Mary, and several mountaineering friends, came up with more than just a way to buy equipment cheaply—they devised an entirely new way to own a store together. That idea eventually became REI, one of America’s largest cooperatives.
The Problem of a Single Ice Axe
In the late 1930s, Seattle was surrounded by mountains—the Cascade Range, the Olympic Mountains, and Mount Rainier, whose volcanic peak could be seen from nearly every window on the city’s eastern side. It was no surprise that many people there enjoyed hiking and climbing. But the equipment was mostly made in Europe, especially in Austria, and importing it to the United States was extremely expensive.
Lloyd Anderson, an engineer by profession and a passionate mountaineer at heart, calculated that buying ice axes one at a time through a store was not cost-effective. What if he bought an entire shipment at once—for all his friends? He wrote directly to an Austrian company and ordered several ice axes. The price turned out to be almost half as much.
It was similar to an entire class pooling its money to buy a box of pencils wholesale from a stationery store—it is much cheaper than having each student buy a single pencil separately.
From One Purchase to an Entire Store
The friends liked the idea of buying together so much that they decided not to stop with one order. In 1938, they officially registered Recreational Equipment Inc.—but organized the company in an unusual way. Instead of allowing one person to own the business and collect all the profits, they created a system in which anyone could pay a small fee—just one dollar at the time—and become not merely a customer, but a co-owner of the store.
This is called a cooperative. The word may sound complicated, but the meaning is simple: instead of one owner, there are thousands of small owners, and each of them has a say in how the store operates.
Here is how it works:
| Ordinary Store | REI Cooperative |
|---|---|
| There is one owner, who keeps the profits | There are thousands of owners—everyone who buys a membership |
| Profits go to the owner | Part of the profits is returned to customers every year |
| One person makes the decisions | Co-owners can vote on important decisions |
| The goal is to earn as much as possible | The goal is to provide people with good equipment at a fair price |
Every year, REI calculates how much money the store has earned and returns part of that amount to its co-owners in the form of what is known as a “patronage dividend.” It is as if a school stationery store said at the end of the year: “Thank you for shopping with us—here is some money back because you helped us operate.”
An Idea That Survived Eight Decades
The most remarkable thing is that this model did not remain a quirky experiment among a group of mountaineering friends. It grew into a huge company with hundreds of stores across the country, while its basic principle remained the same as it was in 1938. Today, REI has millions of member-owners across America—ordinary people who enjoy hiking, cycling, and camping, and simply want to buy good equipment fairly.
Mary Anderson, the founder’s wife, once recalled how difficult it was to convince people that a store owned by its own customers could actually work. But time proved that it could—and very successfully.
There is something warm and deeply human about this story. Lloyd was not trying to get rich on his own. He simply wanted his friends to have good ice axes and came up with a way to make that possible while keeping things fair for everyone. I think that is exactly why the idea took hold—it was not about one person’s money, but about an entire group of people trusting one another.
A Small Idea, a Big Achievement
The story of REI did not begin with a grand business plan, but with one person who could not find the ice axe he needed. Instead of simply complaining about it, he and his friends created a system in which every customer became a little bit of an owner. Nearly a century later, that idea is still working—and reminds us that sometimes the simplest and fairest solutions turn out to be the most enduring.
