Warehouse: Functions, Advantages & Disadvantages of Warehouse

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A warehouse may be defined as a building used for storing goods. They are constructed by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc to store goods. They are big plain buildings in industrial parks on the outskirts of cities, towns, or villages. It possesses loading docks to load and unload goods from trucks.

Sometimes they are prepared for the loading and unloading of goods directly from railways, airports, or seaports. They usually have cranes and forklifts for moving goods, which are majorly placed on ISO-standard pallets and then loaded into pallet racks.

Stored goods can contain any raw materials, packing materials, spare parts, components, or finished goods related to agriculture, manufacturing, and production. In India and Hong Kong, it may be referred to as a “godown”.





  1. Functions Of Warehouse  

The function of the warehouse are as follows:

1 Long-term storage

The essential role of warehousing is the storage of goods. Extra goods which are not required instantly can be kept in the warehouse for future use. These extra products can be consumed or supplied as per the customer’s necessity.

2. Price stabilization

The warehouse recreates an essential role in the process of price stabilization. It is achieved by the innovation of time utility by warehousing. It permits us to bypass the risk of a fall in the price of goods when their supply is in mass and a rise in the price of goods during the derelict season.

3. Risk bearing 

When the goods are kept in warehouses, they are open to various risks in the form of theft, damage, exploration, fire, etc. Warehouses are built in such a way as to undervalue these risks.

Contract of bailment operates when the goods are kept in wave- houses. Thus, a warehouse keeper has to accept reasonable care of the goods and safeguard them against different risks. For any loss or damage sustained by goods, the warehouse keeper shall be responsible to the owner of the goods.

4. Financing

Warehousing operates as a source of finance for the businessman for meeting business operations. The loans can be raised from the warehouse keeper against the goods kept by the owner. Goods operate as security for the warehouse keeper. Similarly, banks and other financial institutions also offer loans against warehouse receipts.

5. Grading and Packing 

With modern technologies, warehouse facilities also contain packaging, processing, and grading of goods. Goods can be loaded in suitable sizes as per the instructions of the owner.






  2. Advantages of Warehouse  

The advantages of Warehouse are as follows:

a. Warehousing Helps Meet Urgent Demand.

b. Warehousing Helps Keep Goods Safe.

c. Warehousing Paves Way for Other Services.

d. Warehousing Helps Keep Your Food from Going Bad.

e. Warehousing Saves a Business a Great Deal of Money.


Advantages of Warehouse



  3. Disadvantages of Warehouse  

The disadvantages of Warehouse are as follows:

a. Expensive to construct

b. Location

c. Low Flexibility

d. Administrative Problems

e. Lack of Space in Public Warehousing


Disadvantages of Warehouse




Read Also: Types of Buildings



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