Warehouse - Advantages of Warehousing And Kinds of Warehouses

Warehouse - Advantages of Warehousing And Kinds of Warehouses
The function of storage is performed through housing or storing the products properly. The place where the goods are stored in known as a ‘warehouse’. The term ‘ware’ means ‘article’ or merchandise collectively and warehouse is a building or room for storing goods. Thus storage is one of the physical distribution functions of marketing and warehouse is the tool with which this function is performed. Storage is marketing activity whereas warehousing embraces storage and helps other marketing functions such as assembling, grading and transportation. In common parlance warehouse mean god owns.

Advantages of Warehousing:

They serve to safeguard the stocks of the merchant who has only very limited space at his trading place; They make provision for the unloading of incoming articles in bulk the warehouses afford a resting place for these goods until they are moved to shops in small lots. Hence, warehouses reduce distribution costs; If the traders have a warehouse in closing proximity to the selling area, customers are served most economically and at lower expense. Some kinds of warehouse indirectly offer even financial assistance, e.g., bonded warehouse; Warehousing offers judicious movement of goods which will stabilize prices; The warehousing facilities help in determining the channel of distribution. A manufacturer, for example, will prefer to have wholesaler or retailer who has his own warehouse; Warehouses assist in maintaining continues sales. This avoids “out of stock” conditions, and there by increases the sales volume.

Kinds of warehouses: Broadly, the different kinds of warehouses can be divided into three groups on the basis of place of necessity, ownership, and special provisions. Generally, there are three classes of warehouse: 
1- Bonded warehouses; 
2- Public warehouses; 
3- Private warehouses,

Bonded Warehouses:
These warehouses are located near ports. They enable the unloading of commodities from a ship safety into a place until the owner of the goods takes delivery of them. Such warehouses are also necessary for outward transportation, since a manufacture cannot wait until a ship reaches a port of loading. In such cases the commodities are handed over to the warehouse authorities who will keep them until the ship arrives at the port. The services of a bonded warehouse are utilized preferably by exporters and importers. The goods deposited with a warehouse are said to be in bond

Private warehouses:
A firm or a manufacturer or a trader who operates a warehouse exclusively for his own purpose is called a private warehouse. In plant warehouses and field warehouses in most cases are private warehouses. These warehouses are profitable only when the volume of stock to be stored is high. Otherwise it will increases the prices of products since the managements of warehouses involves huge expenditure.

Public Warehouses.
The best known and the most widely accepted services are offered by public warehouses. Products can be stock piled in appropriate physical condition and in strategic locations under the seller wishes to distribute them to consumers. Public warehouses offer storage and handling facilities to any interested individual or company. The bonded warehouse in that sense is a public warehouse. The users will, however, have to pay rental charges calculated on the basis of area occupied, period used, special nature; of the commodity, etc. Because of this, these warehouses are also known as duty paid warehouses.