What Is Warehousing ?
Warehousing means organized management and storage of physical goods (both raw materials and finished goods) before they are transported or distributed. It is a process of storing materials in proper manner before they are sold. 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. Important functions and roles of warehousing are discussed in this post.
The Role And Functions Of Warehousing In Modern Business
Some notable functions or roles of warehousing can be pointed out as follows:
1. Ensure 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.Facilitates 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.
3. Provides 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. Facilitates 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. Assists Financing
6. Assists 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.
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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.
