Importance of warehousing to business/ways in which warehousing promotes trade in a country

This importance’s cut across the producers, traders and consumers.

  1. It ensures steady supply of goods into the market since they are stored in a warehouse and released when the market needs them.
  2. It ensures no surplus or shortage of goods. It enables surplus goods to be stored and supplies them when in shortage.
  3. It ensures protection of goods-It has storage facilities that protect the goods from physical damage and adverse weather conditions.
  4. It facilitates mass production-It enables producers to produce large quantities of their goods due to the presence of a storage facility.
  5. It enhances stability of prices in the market -This is achieved through regular supply of goods in the market throughout the year therefore no surplus or shortage.
  6. It ensures storage of goods produced far away from the markets -This is because every country requires goods produced in other parts of the world.
  7. It ensures storage of seasonally required goodg. umbrellas and gumboots-It enables manufacturers of such goods to produce these goods in advance and store them awaiting the season required.
  8. It ensures storage of raw materials-Manufacturers usually require large quantities of raw materials which are normally stored in a warehouse.
  9. It buffers stocks. The government is able to store foods e.g. grains which are then released into the market in case of a shortfall.
  10. Reduced costs – Availability of private warehouses enables manufacturers, importers and exporters to access warehousing services when the need arises without owing one.
  11. Preparation of goods –Most large scale retailer’s package, grade, blend and sort out their goods in warehouse awaiting sale.
  12. Breaking of bulk. Where goods are supplied in large quantities because of scale of manufacture, then the storehouse performs the activity of taking delivery of bulk consignment and issuing in smaller lots to customers or users.
  13. Creation of bulk. It may be the case that a good is produced in small quantities in a variety of locations and need to be brought together into large lots for economic shipment to the market or users.
  14. Financing: Warehouse provides a receipt to the owner of the goods for the goods kept in the warehouse. The owner can borrow money using this receipt.



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