A warehouse is a commercial building which is basically meant for storage of goods. It's an establishment for safe custody of goods. It enables a businessman to carry out production all year long by storing raw supplies and inventory. It enables them to sell their products when there's adequate demand. By serving the basic purpose of storage, a warehouse helps in performing varied functions beneficial to a business.
Benefits of a warehouse to a business:
1. Regulates production
Raw materials will be stored in a warehouse which ensures continuity of production. A business can perform uninterrupted mass production if it has the facility for storage.
2. Helps in catering to future calls for
Warehouses are also used to store goods with the intention to cater to future demands. Typically when goods are produced there will not be adequate demand for them. It helps to store them and provide them at the time of future demands.
3. Enables Time Utility
Storage of goods in a warehouse enables the producer of products to provide goods within the market as and when required by the market. This is beneficial for items which can be seasonal in demand. It also helps when sure products are required in many areas but are produced only in specific regions.
4. Helps in price stabilization
Costs of products fall when their supply exceeds their demand. Having a storage facility enables the producer to manage the prices by releasing goods so that the availability meets the demand. This ensures supply of goods to the market in line with the demand. This, in turn, helps in stabilizing prices.
5. Provides a safe storage for goods
Perishable products might be preserved in a cold storage in a warehouse. Items stored in a warehouse are safe from risks of theft, fire or any kind of damage. Goods are additionally insured.
6. Packing and grading facilities provided
Warehouses provide facilities for packing, processing, mixing, and so on within the warehouse. This enables the manufacturer to present items in a form that is ready for purchase. Prospective buyers can even visit the warehouse to check such products.
There are three types of warehouses:
These are owned and operated by big business houses.
It's owned by a businessman or a co-operative society. It is rented out to the general public who require storage space.
These are licensed warehouses, where, imported goods are stored till custom duty is paid. They're typically positioned near ports. They're operated by Government or work under the control of customs authorities.
Storage in a warehouse helps a enterprise in manufacture and maintenance of goods. Therefore, it is price saving and beneficial to a enterprise in the lengthy run.
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