Importance of Warehousing

1.Seasonal Production:

Some products like agricultural goods are produced only in a particular son but they are required for consumption throughout the year. Warehousing of rage is necessary for such commodities, so that they can be made available throughout the year to its consumers.

2.Seasonal Demand:

Are required only in a particular season eg, umbrella, raincoats, warm

clothing etc. this type of commodity is produced throughout the year but is kept in store till the arrival of season.

3. Raw Material:

For the development of large scale industry in modern area, it is necessary to store the raw material. This can help in the continuity of large scale production.

4. Efficient Marketing:

To market the goods efficiently, adequate storing facilities should be available.

5. Protection of Goods:

Sufficient space, proper location, adequate equipments of a warehouse give protection to the goods against cold, heat, moisture, fire and thieves etc.

6. Surplus Production:

Mostly surplus goods are manufactured in anticipation of demand. So they have to be stored safely in warehouses till its demand. Thus manufacturers store them for wholesalers and wholesalers store them for retailers until they aredemanded by consumers.

7. Processing:

Some goods require curing and processing before their final sales like coffee,

seeds and fruits etc. hence storing is necessary for these types of product.

8. Stability in Prices:

To create equilibrium in demand and supply, it is necessary to keep surplus stock and release the same at the time of scarcity. This can help in maintaining the

stability in prices

9. More Sales:

Warehouses assist in maintaining continuous sales through regular supply of the goods. This avoids ‘out of stock’ conditions and increases the sales volume. 10. Employment: Warehousing is just like a big specialized industry, which provides

employment to a large number of persons.

11. More Prices/Value:

If the products like rice and tobacco etc. are properly kept for a long time in their prices may in crease de to their antiquated.

12.Re-export Trade:

The goods imported for the purpose of re-export can be kept in bonded

warehouses till these are re-exported. The warehouse keepers save the time and

money of the import agents. They collect and reship the goods without payment of

import duty

13. Loan Facility:

When goods are kept in a bonded or public warehouse, a receipt for the same is issued and loan can be obtained from banks against these receipts.

14. Insurance Business:

The owners contribute their money in order Dfa Ho to cover their own and clients risk. Thus warehouse owners contribute their share for the development of insurance business,

15. Revenue:

The warehouse-keepers pay income tax to the government their own business income. The custom and excise duties are also collected through them.