Importance of Warehousing In the Development of Trade and Commerce

1. Importance of Warehousing In the Development of Trade and Commerce Before highlighting the importance of warehousing in the development of trade and commerce, one has to bear in mind what warehousing is all about. Warehousing refers to the storage and preserving of goods until they are ready for distribution to the consumers. This is usually a very common practice that is associated with production. Produced goods are often required to be stored in a warehouse in order to make it readily available for consumers whenever they put forward demand for it. The importance of warehousing is also well felt during the process of marketing a product. This is because by having your goods properly preserved and in good condition it gives your marketing a major boost. With warehousing in place, companies can comfortably carry out mass production of a product in anticipation of its demand in future. Warehousing is also very important in the production of seasonal goods i.e goods that are produced only in a particular season but whose demand is all year round. In addition, warehousing is also ideal for goods that can be produced at any season of the year and whose demand is for a particular season. The following are the importance of warehousing in the development of trade and commerce; 1. Storage: Storage is the basic function of a warehouse. Products that are surplus to the immediate market demand are usually stored in the warehouse until when the demand for it by customers arises. 2. Price Stabilization: Warehouses are major instruments in the pricing of commodities in the market. This is achieved via the creation of time utility. That is, a manufacturer can choose to store up products in the warehouse when the product is much in circulation and releases it when the product is limited in the market thus stabilizing the price of the product. 3. Risk-bearing: With warehousing, your goods are safe from certain storage risk such as theft, deterioration, exploration, fire etc. This is because these warehouses are built in a very formidable way thus reducing to a bearable minimum the risk of theft and storage related damages to goods. In addition, too, the warehouse personnel are usually held responsible for any damage that might occur during the entire duration of storage.

2. 4. Financing: Another amazing benefit of warehousing is that once your goods are in the warehouse you can bank on this opportunity to get loans from the warehouse keeper. In this case, your goods under the warehouse keeper's watch act as a valid security for the loan. In addition, when seeking loans from banks, warehouse receipt is most times demanded as part of the required documents to process the loan. 5. Grading and Packing: At most warehouses grading and packing services are made available for customers who are in need of these services. In conclusion, with warehousing, a manufacturing company can embark on a massive all year production of a product without any fear of losing the goods to damages. Articles Source : http://www.changemagazine.net/2018/05/19/importance-of-warehousing-in- the-development-of-trade-and-commerce/