A warehouse is a commercial building which is basically meant for storage of goods. It is an establishment for safe custody of goods. It enables a businessman to carry out production throughout the year by storing raw materials and inventory. It enables them to sell their products when there is adequate demand. By serving the basic purpose of storage, a warehouse helps in performing various functions beneficial to a business.

Benefits of a warehouse to a business:

1. Regulates production

Raw materials can be stored in a warehouse which ensures continuity of production. A business can carry out uninterrupted mass production if it has the facility for storage.

2. Helps in catering to future demands

Warehouses are also used to store goods in order to cater to future demands. Sometimes when goods are produced there may not be adequate demand for them. It helps to store them and supply them at the time of future demands.

3. Enables Time Utility

Storage of goods in a warehouse enables the producer of goods to provide goods in the market as and when required by the market. This is useful for goods that are seasonal in demand. It also helps when certain products are required in many areas but are produced only in specific regions.

4. Helps in price stabilization

Prices of goods fall when their supply exceeds their demand. Having a storage facility enables the producer to manage the prices by releasing goods so that the supply meets the demand. This ensures supply of goods to the market according to the demand. This, in turn, helps in stabilizing prices.

5. Provides a safe storage for goods

Perishable products can be preserved in a cold storage in a warehouse. Goods stored in a warehouse are safe from risks of theft, fire or any kind of damage. Goods are also insured.

6. Packing and grading facilities provided

Warehouses provide facilities for packing, processing, blending, etc in the warehouse. This enables the manufacturer to present goods 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:

    • Private:

These are owned and operated by big business houses.

    • Public:

It is owned by a businessman or a co-operative society. It is rented out to the public who require storage space.

  • Bonded:

These are licensed warehouses, where, imported goods are stored till custom duty is paid. They are generally located near ports. They are operated by Government or work under the control of customs authorities.

Storage in a warehouse helps a business in manufacture and maintenance of goods. Hence, it is cost saving and beneficial to a business in the long run.

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