Warehousing

Warehousing

A warehouse is known as a building used for commercial purposes such as storage of goods. It is usually a paid location where the goods and products are stored. The sole intention behind storing these products is to sell or redistribute them later. Unlike large organisations, small businesses usually don’t pay for warehousing since, they use their basement, garage or spare rooms to store the goods. On the other hand, large business rents a warehouse for storage purposes.

Although there have been situations where the owner distributed goods and products from the warehouse but it doesn’t double up as both distributor centre and warehouse. A warehouse only offers storage solutions to the owner whereas distributor centres are different.

Different types of Warehousing:

Majorly there are 3 types of warehousing and these mentioned below:

1.  Private Warehouses:

This property is used for warehousing purposes although it is privately owned by an individual manufacturer or producer. The reason behind owning a private warehouse is to store its products and goods, for example, cold storage for vegetables and fruits.

There are 3 types of private warehouses. These houses are -Type C, premises-based; type D, premises-based where a trader consumes the authority to release products for free circulation based on the Local Clearance Procedure (LCP); and type E where authorisation for release is stricter than types C and D.

2. Public Warehouses:

Public warehouses are usually operated by a warehouse keeper, for storing goods under the regulations and instructions of customs warehouse procedure by other traders, who are also known as depositors.

2. Bonded Warehouse:

Public warehouses are usually operated by a warehouse keeper, for storing goods under the regulations and instructions of customs warehouse procedure by other traders, who are also known as depositors.

Benefits of Warehousing:

1. Opportunity to Expand : Finding a warehouse that would take care of the products and saves them for a longer period would stifle productivity. Warehouses aim to get rid of manufactured products, creating enough space and conducive environment.
2. Production Support : On national occasions and festivals are the biggest windows for sales. More sales would require more stock, which eventually means more space. If we merge all of them then increased sale will need production support which is granted by warehouses, they can significantly reduce production lead times.
3. Product packaging and processing : Product packaging and processing are also offered by efficient warehouses.
4. Price control : The market is all about consumer culture and the supply-demand model. But for a business person, it is essential to maintain their books for future references and shortcoming, and warehouse offers the space and business opportunities with the motive to affect the demand-supply model.
5. Financing : Trade finance? The stored goods and products can be also used as a collateral to a lender, this solution is offered by the warehouse.
6. Reduce business risk : The whole point of global trading is to secure the procedure and mitigate the risks involved in trading. Therefore, the goods stored in warehouses are insured against the warehouse owner’s risk. Hence, the client doesn’t have to worry about the inventory fire break out, theft and damage. The client will be compensated for eventually.

Accessing warehouses

Finding a warehouse based on the required domain would allow the clients to use the full potential of the warehouse. Although there are several factors attached to it, some of them are mentioned below:

• Location: Cheaper locations are not the best, the client needs to consider the transportation cost. Warehouse supposed to be accessed on both national or regional basis.
• Type of building: People usually consider new buildings as the catch but it won’t be satisfactory. New or old building, but it should have sufficient power, adequate resources, temperature control and many more factors that assist in the selection of the type of building required for storage.
• Gross rent: Landlords passes on operation expenses to the depositor which adds up to the final rent. Additional expenses such as real estate taxes, maintenance and repair charges and management costs should be well stipulated.
• Dedicated facility: More offering by the warehouse would add to expenses but the depositor should not compromise with security, safety or quality of warehouse.
• Opportunity for unanticipated value-added services: Warehouse can also value-added services but on a chargeable basis.
• Only pay for service used: The depositor will ensure the services are undertaken. For example, labour is an expense in the ware, therefore, the depositor will decide whether he wants trained staff or labour based on requirements.