Role And Functions Of Warehousing

In marketing, warehousing has a great role. It brings regularity in production and supply of goods. It creates time utility of goods. Warehousing helps to protect goods and to maintain price stability. So, the important role of warehousing and its functions can be discussed as follows:

1. Regular Production

Warehousing helps in regular production of goods. Storing of raw materials helps to continue production process. On the other, some kinds of goods are produced to supply only certain seasonal demand. But their production can be continued through out the year. Such goods produced regularly even during off-season and are kept safe in store to supply when demanded.

2. Regular Supply

Storage or warehousing plays an important role in regular supply of goods. Paddy, rice, maize, wheat, potato, etc. are produced in certain season. But they are used round the year. So, such seasonally produced goods should be kept safe in store for their regular supply to the market when they are demanded.

                              Also Read: Types Of Warehouses

3. Protection From Risk

Warehouse protects goods from risks and can be kept safe from fire, theft, robbery, any loss or damage. So, the producers, businessmen, distributors etc. store their goods in warehouse. Warehouse is built with special way to keep goods safe. If an agreement is made with insurance company for goods kept in warehouse, the insurance company gives compensation for any loss to the concern businessman.

4. Price Stabilization

With the help of warehousing facility, goods can be regularly supplied to market. It prevents price fluctuation. If the goods are supplied more than demand, then price declines and if demand is higher than supply, then the price rise. Warehousing prevents such situation. It keeps proper balance between supply and demand. So, it plays important role to bring stability in price.

5. Preservation Of Quality

Proper warehousing preserves quality and even increases quality of goods. It preserves quality, taste, nutritive elements, flavor and utility of fruits, vegetables, drinks etc. It increases the quality of the goods such as tobacco, alcohol, sauce, pickle and so on, for which price also can be increased.

6. Financing

In some countries, warehouse authorities accept the goods as security and provide loans to the owners of the goods. If the warehouses is fully government permitted, banks and financial companies accept the warehouse-receipt as security and provide loans to owners of the goods. Hence, the warehousing helps to acquire necessary finance in marketing.

7. Better Price

Warehousing helps the producers to wait for better price. Goods are kept in warehouse until the price become better. When the prices of the goods increase, then the goods are taken out from store and sold out for higher profit.

8. Maximum Service

In fact, the warehouses located in different parts of the country are the distribution centers. They are involved in distribution services. They give emphasis to maximum customer services at reasonable cost.

In this way, warehousing provide different services and helps to business entrepreneurs and customers. Warehousing plays an important role in marketing especially in physical distribution.


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