What Is Warehousing? Definition, Functions and Advantages
What is Warehousing?
- A warehousing is a large commercial storage space or building where a company keeps many things in an organized manner to improve its distribution. A place where goods are stored until they are shipped to retailers, distributors, or customers.
- Businesses can benefit from warehousing in many ways, including keeping inventory more secure, managing it efficiently, and streamlining the shipping process. These warehouses have become an important part of global supply chains over the years.
Why is warehousing important?
- It helps to store, ship, and distribute goods in one place. This makes it easier to track and manage inventory effectively and reduces transportation costs.
- Having a central location for your products gives you control over your products and helps ensure customers receive their orders on time.
- The entire process is insured, which means that the product owner is compensated if the products are damaged or stolen. And keeping products in a temperature-controlled warehouse prevents unwanted changes.
Types Of Warehouses
There are different types of warehouses. Each is designed to meet specific storage and distribution needs. Let’s look at some of them:
1. Public Warehouse
A public warehouse is a warehouse owned by a government agency that is available to private sector companies. These warehouses are rented out for commercial or personal use. It is an attractive option for business owners. New or growing businesses typically use these warehouses. A public warehouse is also commonly known as a bonded warehouse.
- Accessible to the public
- An inexpensive option for new businesses
- Suitable for seasonal traders
- Suitable for short-term storage
2. Private Warehouse
Private warehousing is when private companies own or rent warehouses to store their goods. Due to the high cost of construction and maintenance of these warehouses, the number of warehouses is limited. These types of warehouses can only be purchased by large companies.
- Increased control over building facilities
- It is ideal for companies requiring a marked long-term presence. Provides a highly specialized space for business activities.