Meaning of the Terms Ware-housing and Ware-house
Define the terms ware-housing and ware-house
Warehousing is the institutional arrangement for the storage of goods i.e. receiving, storing and dispatching the goods to the uses. It is a very important aids to trade and through it trade can be operated efficiently.
A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities, towns and villages. A warehouse is an establishment for the storage or accumulation of goods. The people who require goods may be secondary producers, distributors or ultimate consumers.
associated with agriculture, manufacturing and production. In Indian
English a warehouse may be referred to as a go down.
global warehousing concept has gained popularity over the last decade
as stock pre-positioning becomes one of the strategies for ensuring a
timely response to emergencies. They are usually purpose built or
purpose designed facilities operated by permanent staff that has been
trained in all the skills necessary to run an efficient facility or
utilising third party logistics (3PL) staff and facilities. For such
operations, organisations use, information systems that are computer
based, with sophisticated software to help in the planning and
management of the warehouse. The operating situation is relatively
stable and management attention is focused on the efficient and cost
effective running of the warehouse operation. Numerous organizations
have centralized pre-positioning units strategically located globally.
Some of these offer extended services to other humanitarian
organizations on a cost plus operating charges basis.
storage an issue for your business? Many companies reach a point where
the housing of their products creates an impediment in their forward
progress. Are you worried about competing with others in your industry?
Would you like to produce more products but are in need of a warehouse?
smaller to mid-sized companies do not have the immediate funds to
invest in warehousing facilities. What options do they have? They can
wait and hope their business eventually makes enough money in order to
buy or rent a warehouse. This could take a while and cause anxiety in
regards to keeping abreast in the industry.
option is to outsource for public warehousing. Outsourcing for business
services solves the problem of attempting to remedy situations
in-house. Smaller businesses do not have to worry about accumulating the
immediate funds; contract warehousing is available to them. Consider
the following advantages of outsourcing for storage services.
- Storage services provide opportunity to expand;A
business’ products may be selling well, but the buying cycle could
possibly be stymied by lack of room for mass production. Expansion is
inhibited and revenue cannot reach full potential due to lack of
warehousing. Outsourcing solves this problem.A popular product could be
produced in full force and stored in public warehousing. Your supply can
now meet the demand of your customers.
- Warehousing distribution gives you a chance to focus on your business;Businesses
need other services. This fact leads the company to make a decision to
either build an extension in-house or to outsource for their desired
service. Larger companies have the advantage of building in-house more
easily; they often have the human resources and the money readily
available. It is not so easy for smaller businesses.If smaller companies
start to turn their focus to peripheral subjects, they begin to lose
focus on their core business matters. Distractions can impede the growth
of a smaller business and give their competitors time to surpass
them.Outsourcing for warehouse services (as with other services) affords
the smaller business time to remain focused on their main objectives.
- Storage services can save you money on shipping;Public
warehousing vendors are located all over the country. It may be easiest
to choose a warehouse located around your largest customer base. Many
businesses select a contract warehouse in the middle of the country.
This saves money on shipping coast to coast and from southern and
northern poles of the country.
- Public warehousing does a lot more than store your goods;Warehouses
conduct a variety of tasks. They address ancillary tasks such as
picking, packing, shipping etc. You can devote less concern about the
particularities of your business. Imagine a warehouse receiving your
goods, taking your orders, packing it for shipment, and then shipping it
out to the customer! The sundry details of your business will be
handled by professionals with experience.
The cost benefits of warehousing can be determined by looking at a
couple of different factors. The first is what does it cost to warehouse
boxes of your printed materials? In some cases you’ll find that a print
company will take on your warehousing costs as a value add for printing
in bulk or at very low rates per square metre. The second factor, If
you have multiple locations globally or across the nation then having
central warehousing locations for distribution can save you a lot of
money on shipping. You’ll need to consider how many printed pieces you
intend to use for different campaigns and which ones can be printed in
bulk and warehoused
- Environmental Considerations
When you run any print job there is large quantity of stock (generally
500+ sheets per run) that is required as make ready. This make ready run
is required to set the presses to ensure you print job comes up looking
just right and that those colours pop off the page. When you consider
printing in bulk there are less make runs required, which saves paper
and reduces energy consumption. When you consider a warehousing option
by printing in bulk you’re helping the environment.
- Inventory Control
Having your products warehoused and ready for distribution provides you
with the advantages of always having products in stock and ready to
distribute out to the market. When you warehouse your print products you
can control your inventory and distribute your products when and where
you need them. If an unexpected campaign pops up and you have inventory,
then you can meet that demand immediately, almost on the day if need
be. Alternatively going back to the printing press can really delay your
campaign and ultimately the loss of sales opportunities. Having
inventory will allow you to control your needs in more streamlined
on the size of your business you simply might not have the space to
store your print products. The initial advantage is that when you print
in bulk you take advantage of the cost savings achievable. You may also
require conditioned space for some printed products, so that over time
your products aren’t affected by air and worse humidity. By warehousing
your products you take advantage of having your products store with a
professional warehousing provide and ready to ship on demand, which
saves you the space at your office.
you distribute products around the country or even globally then having
centrally located warehousing solutions can really help you with your
inventory controls, reverse logistics and the time it takes to deliver a
product to market. When you warehouse your print products along with
the products you sell you take advantage of economies of scale to
distribute your products efficiently to the markets you serve.
any of your printed products are likely to be returned with the order,
then having a warehousing solution can really help you to manage your
return orders. When a product needs to be returned you’ll be in a
position to have the returned products sent back to your warehouse. This
saves you both time and money by centralising your warehousing
you warehouse your print materials you’ll always have items in stock
ready to ship. Either printed materials that are sent directly with your
products or print products that are used to continue to market your
promotions to your customers. You can then match your projected orders
with your stock to best manage your inventory control.
warehousing solution is a key component in reducing the overall costs
for your print materials. Its commonly known that when you print in bulk
you reduce the cost per item to print. When you print in bulk you
generally need the benefit or a warehousing solution to store your print
products. A good print management company can offer you a warehousing
and distribution program that will allow you to pocket the savings on
printing your orders in bulk.
growing trend in the warehousing solutions market is to provide
distribution services which includes packaging, labelling and the
shipping of your products. When you consider warehousing your products
ask if your warehousing partner offers distribution services as well.
You may be able to centralise your warehousing solutions so that you can
send products out on demand cost effectively to meet your customers
products have longer lead times than others and may need to sit on the
shelf for an extended period of time before they go out to market. Have a
warehousing partner can allow you to cost effectively manage and store
your products over extended periods of time, so when your marketing
campaigns kick in your products will be waiting and ready to deliver.
you considered warehousing your print and packaging requirements? Let
us know how we can help you evaluate a warehousing and distribution
This is the basic function of warehousing. Surplus commodities which
are not needed immediately can be stored in warehouses. They can be
supplied as and when needed by the customers.
- Price Stabilization:
Warehouses play an important role in the process of price
stabilization. It is achieved by the creation of time utility by
warehousing. Fall in the prices of goods when their supply is in
abundance and rise in their prices during the slack season are avoided.
- Risk bearing:
When the goods are stored in warehouses they are exposed to many risks
in the form of theft, deterioration, exploration, fire etc. Warehouses
are constructed in such a way as to minimise these risks. Contract of
bailment operates when the goods are stored in wave-houses. The person
keeping the goods in warehouses acts as boiler and warehouse keeper acts
as boiler. A warehouse keeper has to take the reasonable care of the
goods and safeguard them against various risks. For any loss or damage
sustained by goods, warehouse keeper shall be liable to the owner of the
- Financing: Loans can be raised from the
warehouse keeper against the goods stored by the owner. Goods act as
security for the warehouse keeper. Similarly, banks and other financial
institutions also advance loans against warehouse receipts. In this
manner, warehousing acts as a source of finance for the businessmen for
meeting business operations.
- Grading and Packing:
Warehouses nowadays provide the facilities of packing, processing and
grading of goods. Goods can be packed in convenient sizes as per the
instructions of the owner.
type of warehouse is owned and operated by channel suppliers and
resellers and used in their own distribution activity. For instance, a
major retail chain may have several regional warehouses supplying their
stores or a wholesaler will operate a warehouse at which it receives and
warehousing offers better monitoring systems over the handling and
storageof products as required by the management from time to time which
would enhancethe performance of the warehouse.
- There is less
likelihood or error in the case of private warehousing since
thecompany’s products are handled by its own employees who are able to
identify theproducts of their own company.
- If there is
sufficient volume of goods to be warehoused, the cost of private
warehousing comparatively less than that of public warehousing. The cost
of private warehousing per unit may be actually higher if the private
warehouse is packed to the brim.
- Private warehousing is the best
choice for some of the locations and the products handled because of
the non-availability of the public warehousing.
warehousing has the opportunity to specially design its facilities for
automatic material handling equipment where as public warehousing may
have the same.
- Enabling the end user to increase their efficiency by means of better design and structured lay-out.
- Efficient use of human resources in warehouse operation improves end users’ overall performance.
- Intangible benefits in the form of cost reduction in all the warehouse operations.
- Lack of flexibility: The
major drawback is it is too costly, because of its fixed size and
costs. This means that in the short run, the private facility cannot
expand or contract to meet increases or decreases in demand. Thus, when
demand is low, the firm still assumed the fixed costs as well as the
lower productivity linked to unused warehouse space. However, the
disadvantages can be minimized if the firm is able to rent out part of
its space. Moreover, it loses flexibility in its strategic location
options. They can’t change quickly to rapid changes in market size,
location and preferences, and this may mean that they will lose an
excellent business opportunity.
- High opportunity cost (high risk)ROI
on other investments may be greater if funds are channeled into other
profit-generating opportunities. Besides, there is also a potential
probability of not being able to sell the w/h in the later period due to
its customized design.
- Low Rate of return: Since
the rate of return is about the same as the firm’s other investments,
most companies find it advantageous to use a combination of public and
private warehousing. It is best to use private warehousing to handle the
basic inventory levels required for the least cost logistics in markets
where the volume justifies ownership. On the other hand, any extra
volume can be stored in the public warehouse during peak periods where
private warehouse is full.
- High start-up cost:Firms
have to generate enough capital to build or buy a warehouse. A
warehouse is often a long, risky investment. Moreover, there is cost of
hiring and training of employees, and the purchase of material handling
equipment. The high cost involved may force the company to seriously
consider public warehousing as a better option.
are warehouse which are owned by private individuals or companies or
government but they are open to any member of public in return for a
storage fee or charge.
- It is in general less expensive and more efficient and effective to achieve more customer service level.
- Public warehouses are usually strategically positioned and easily available.
warehousing is adequately flexible to meet most space requirements, for
several plans are available to suit the requirements of different users
costs of a warehouse are distributed among many users. Therefore, the
overall cost of warehousing per unit works out to a lower figure.
- Public warehousing facilities can be given up as soon as necessary without any additional liability on the part of the user.
- The costs of public warehousing can be easily and exactly ascertained, and the userpays only for the space and services he uses.
- Conservation of capital is more in public warehousing
- It has got enough space to handle peak requirements
- Public warehousing has reduced risk in their operations.
- Public warehousing has got good economies of scale
- It would give Tax advantages for end users
- Knowledge of exact storage and handling costs are available to end users.
- It is insulated from labour disputes
problem: There is a potential problem of incompatible computer
terminals and systems. They may not have another terminal just to suit
the needs of just one customer. Thus, the lack of standardization in
contractual agreements makes communication regarding contractual
- Lack of specialized services: Spaces or
specialized services needed may not always be available in a specific
location. Most public warehouse facilities provide local services which
may not be useful for the big MNC who requires more specialized
- Space may not be available: Public warehousing space
may not be available when ans where a firm wants it. Shortage of space
can happen in some places especially during peak season, and this may
affect the firm adversely
public warehouse is essentially space that can be leased to solve
short-term distribution needs. Retailers that operate their own private
warehouses may occasionally seek additional storage space if their
facilities have reached capacity or if they are making a special, large
purchase of products. For example, retailers may order extra merchandise
to prepare for in-store sales or order a large volume of a product that
is offered at a low promotional price by a supplier.
warehouses are used for imported goods which are not granted clearance
on account of non-payment of custom duty by the importer of these goods.
Such warehouses are situated near the ports. Goods can’t be removed
from these warehouses until the custom duties are paid.
warehouses may be run by the government or private agencies (when
granted licenses to operate such warehouses). In both the cases there is
a strict control and supervision imposed by custom authorities on their
operation and functioning.
of the goods has some control over his goods and he can inspect and
check the goods as and when he wants. After making part payment of the
custom duty, goods can be proportionately withdrawn from these
kept in these warehouses can be branded, packed, graded, labeled and
canned in the warehouse itself. Bank loans can be raised with the help
of receipt issued by these warehouses by giving that receipt as
is a least possibility of goods being exposed to any risk of theft,
damage and deterioration. The entrepot trade i.e., re-export of imported
goods is greatly facilitated as the importer can have the delivery of
goods without paying any custom duty.
- No Duty Payment Required
As mentioned, importers and proprietors do not have to pay any type of
import duty on products traded or purchased internationally. This can
save the importer money and give him or her more control over his
- Storage is often Long-Term In some
countries, storage time is unlimited. In the United States, imported
goods may be stored for up to five years. This means that the importer
can sit on a product until there is an increase in demand. Because duty
is required when the goods are exported or removed from the warehouse
for consumption, this also helps the importer manage his or her money,
because an increase in demand usually equals an increase in revenue.
- Save Haven for Restricted Goods
If you import goods that are subject to restriction, finding something
to do with them before you get the restrictions straightened out can be a
hassle. With a bonded warehouse, you can store restricted items until
you are able to move them elsewhere or get permission to bring them into
the country. Bonded Service has been serving the state or Georgia since
1931. With locations in both Savannah and Atlanta and easy access to
one of the biggest airports in the world and one of the busiest ports
along the Atlantic Ocean, we can store your imports in our warehouses or
transport goods to anywhere in the world.
Customs and Excise Warehouse, commonly known as a Bonded Warehouse, has
been located at our premises where customers utilizing the clearing
services of the company, are able to store dutiable products without the
payment of the customs duty. The maximum storage time allowed is two
years. The duty is payable when the goods are required to be withdrawn
main disadvantage would be the risk of duty on a certain products being
increased while the goods are in the warehouse.
duty rate applicable at the time of withdrawal (UNLESS BEING EXPORTED
FROM THE WAREHOUSE) is the rate in force at that time and not the rate
that was applicable at the time of warehousing. In other words if the
duty is increased by Government during the time the goods are warehoused
then the increase will apply. By the same token, if the duty is
reduced, the lower rate will apply.
- Only dutiable goods may be
warehoused however both duty and VAT is then deferred while in the
warehouse. Goods on which VAT only is payable may not be placed in a
- If, while in the warehouse, duty is totally
removed by Government from a certain product, then the goods must be
removed immediately from the warehouse and the VAT applicable must be
- All goods must be removed and duty paid after the two year period is expired.
- No goods may be removed from the bonded warehouse WITHOUT PROPER CLEARANCE AND PAYMENT OF DUTIES AND VAT HAVING TAKEN PLACE.
some instances, especially with large importers, it may be viable for
the importer to establish his own bonded warehouse on his own premises.
We provide a service to do this for the importer, if this interests you
please visit our consultancy page.
- Special Commodity Warehouses.
- Cold Storages or Refrigerated Warehouses.
- Institutional Warehouses.
- Special Commodity Warehouses:
These warehouses are constituted for storing a particular type of
commodity, e.g., tobacco, cotton, wheat etc. Mature of commodity is
important in selecting the type of warehouse. For storing petrol,
storage tanks are needed and for storing agricultural products, god
downs are needed.
- Cold Storage or Refrigerated Warehouses:
These are the warehouses which are used for storing perishable
commodities like eggs, butter, fruits, vegetables, fish, fresh meat etc.
Goods stored in cold storages can be held for longer time. In fact,
cold storages have made possible the regular supply of certain
commodities throughout the year. For example, fruits and vegetables of
all types can be made available to the people throughout the year.
Refrigerated warehouses have greatly improved the modern way of life.
- Institutional Warehouses:
Different institutions and bodies have their own warehouses on account
of the nature of their operations. For example, Banks, Railways, Food
Corporation of India etc. has their own warehouses for conducting their
activities. Banks keep the stock of the parties in these warehouses as
security against the loans advanced. Railways maintain warehouses to
store large quantity of goods. Goods to be dispatched to different parts
of the country are kept in warehouses before they are sent. Similarly,
goods received for the purpose of delivery are kept till they are
disbursed to the claimant. Various transport agencies also maintain
warehouses for storing the goods which are to be dispatched and
received. Food Corporation of India has built many big warehouses
throughout the country for storing agricultural products.
of trade operation: nature of trade and operation can affect for site
for warehouse. Example, importers and exporters may locate their
warehouse near terminals such as airport and so on, and manufacturer may
locate their warehouse near their factories and so on.
of customers and pattern of demand for the goods: the warehouse must be
located near customer for easy distribution of goods. Also if the
customers buy in small quantities in order to reduce carriage cost the
warehouse must be located near them.
- Cost of land: the cost of land on which a warehouse a warehouse is built must be reasonable.
of labour-there is some labourers to work in warehouse. This includes
the availability of skilled or trained and non skilled labour.
space for loading and offloading: there must be enough to allow loading
and offloading to take place easily which saves times. For example
enough space for trucks to deliver goods. Availability of transport
facilities: there must be easy access to transport facilities for easy
transportation of goods from the warehouse to the customer.
policy: decision about the site for a goods warehouse is also affected
by the government on utilization of space for business purpose.
- Discuss the importance of warehousing in commerce.
- Discuss various types of warehouses.
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