“Goods sit in the warehouse until they are marketed”

“Goods sit in the warehouse until they are marketed”

The important function of storing products is properly performed through warehousing. The place where goods are stored is known as a warehouse. The term ‘ware’ or ‘merchandise’ and collectively warehouse is considered as a building or room for storing goods. In common practice, warehouse mean godowns. Warehousing is a significant function of marketing. It creates time utility and accumulates goods for a certain period to make equal distribution of the same goods throughout the year. It includes holding of goods in proper condition from its production until consumers need it. It protects goods from deterioration and help in carrying over the surplus goods to the place of consumption. Warehouses help businessmen to keep their surplus during slack season to sell them at the time of need.

Thus, storage is one of the physical distribution functions of marketing whereas; warehousing embraces storage and helps other marketing functions such as assembling, grading and transportation etc.

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“A place (building or room) in which goods or merchandise are stored for marketing is called a warehouse and the process of storing, assembling and grading etc. is called warehousing”

Main Points

A place (building or room)

Where the process of storing, assembling and grading etc. is carried on

To prepare the products for marketing or shipping

Importance of Warehousing

Seasonal Production

Some products like agricultural goods are produced only in a particular season but they are required for consumption throughout the year. Warehousing or storage is necessary for such commodities, so that they can be made available to its consumers throughout the year.

Seasonal Demand

 Some goods are produced throughout the year but these are required only in a particular season e.g. umbrella, raincoats, warm clothes etc. This type of commodity is produced throughout the year but is kept in store till the arrival of season.

Surplus Production

Mostly surplus goods are manufactured in anticipation of demand. So they have to be stored safely in warehouses till its demand. This manufactures store them for wholesalers and wholesalers store them for retailers until consumers demand them.

Processing

Some goods curing and processing before their final sales like coffee, seeds and fruits etc. Hence storing is necessary for these types of product.

Raw Material

For the smooth working of production cycle in large-scale industry in modern era, it is necessary to store the raw material. This can help in the continuity of large-scale production.

Efficient Marketing

To market the goods efficiently, adequate storing facilities should be available.

Protection of Goods

Sufficient space, proper location, adequate equipment of a warehouse give protection to the goods against cold, heat, moisture, fire and thieves etc.

Stability of Price

To create equilibrium in demand and supply, it is necessary to keep surplus stock and release the same at the time of scarcity. This can help in maintaining the stability in prices.

Revenue

The warehouse-keepers pay income tax to the government on their own business income. The custom and excise duties are also collect through them.