Pamela Kelley sees spiraling postage and advertising costs threatening her $3.5-million French lace mail-order company. Her solution? Form a cooperative.

Long an option for farmers and franchisees, the power of cooperation is widening its circle, attracting companies from lumber to day care. For Kelley this means teaming her company with other direct mailers, none of which compete directly. Called Affinity, the group trades common customer profiles and customer lists. If all goes well, Affinity plans on sharing the costs of printing and mailing.

-- Elizabeth Conlin