Warehousing

Warehouse is a large building in which goods, raw materials, or commodities are stored.

Importance of Warehouses

1. Protection of goods against climatic conditions.
2. Protection from theft.
3. Producers can store raw material for future production.
4. Surplus created can be stored before being finally sold.
5. Shortages in the market can be avoided.
6. Price fluctuations can be minimized.
7. International trade is not possible without warehousing.
8. Traders can keep their cargos in bonded warehouses, before they pay the duty.
9. Plays important role when demand for products or the time of production is seasonal.
10. Provides place for display of goods.

Types of Warehouses

Retailers Warehouse/Depots

• To store bulk purchases for wholesaler or producer.
• Goods are packed and branded in warehouses.
• Retailers can purchase goods when they are cheap and can stock excess purchase.
• So that goods are always available to fill the space on shelves.

Wholesalers Warehouse

• Use warehouses for blending, grading, packing and branding.
• Store goods from variety of manufacturers.

Cash and Cary Warehouses

• Retailers can buy in small quantities.
• Cheap because of bulk purchases, no credit facility and no delivery.

Cold Storages

• Special warehouse with refrigerating plants.
• Perishable items can be stored.
• Temperature can be set at will.
• Insulation is done.

Regional Distribution Centers

• Owned and maintained by large scale retailers and wholesalers.
• Located close to a good road network.
• Supermarkets/multiple chains/variety chains/franchise/chain of department stores/hypermarkets mainly use regional distribution centers.

Manufacturers Warehouse

• Used to keep stock of finished goods and raw materials.
• Help producer to carry on production when there is shortage of raw material.
• Can help producer keep on production when there is less demand.
• Produced can get benefit of trade discount be purchasing raw material in bulk.
• Located in manufacturers production houses.

Public Warehouses

• These are owned by public sector (government).
• Different government agencies can stock their material.
• Also available on rent to private sector.

Bonded Warehouses

• Are owned by government and are under the control of custom authorities.
• Dutiable goods are stored, on which duty is not yet paid.
• Normally located on ports.
• Traders have to pay the rent.
• Grading, blending, packing, branding and sub-assembly can be done.
• Trader can also sell the cargo and the new owner has to pay the duties.
• Nothing can be taken out of warehouse without paying duty.
• Trader can pay some of the duty can get proportional amount of cargo released.
• Exporting can also be done without paying duty.
• It enables government to collect custom duties.
• Government gets information about the types of goods imported.

Difference between Bonded and Ordinary Warehouses

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