Unit-10 WAREHOUSING

UNIT-10

WAREHOUSING

Warehousing.

            Warehousing is an arrangement by which goods are stored without any damage until the distribution. It is an important aid to trade.

Warehouse.

            Warehouse is a large shed or building specially built to store goods without any damage. It provides the facilities for packing, grading, displaying and distribution of goods.

IMPORTANCE OF WAREHOUSING.

1. It enables production to be carried on continuously.

Warehouses can be used to store raw materials as well as finished goods. It enables the manufactures to continue the production without any delay.

2. Stabilizes the prices of goods.

Warehousing ensures the supply of goods whenever it is demanded in the market. The delay to supply of certain goods leads to the increase in prices. This can be solved because the goods stored in the warehouses can be released gradually so that the price fluctuation can be avoided.

3. Ensures a regular supply of goods.

Large stocks of goods which are seasonally produced like paddy, fruits and wheat are stored for long times, so they are available throughout the year which ensures the regular supply of scarce products.

4. Enables preparation of goods for sale to be carried out.

Activities like blending, bottling, grading, packing and branding can be carried out in the warehouse before the goods are distributed to the various retail outlets.

5. Provides a place for display of goods.

Goods are displayed and can be viewed and examined at the warehouse by potential buyers before placing purchase orders.

6. Helps in foreign trade.

Exporters have to keep their goods at the ports until the arrival of ships to take them abroad. Importers also make use of bonded warehouse for storing of goods until the customs duties have been paid.

TYPES OF WAREHOUSES

1.  Manufacturer’s warehouse.

            This a ware house used by the manufactures to safeguard the raw materials, semi-finished goods and finished goods. Normally it is in large size and can be stored many items.

2.  Wholesalers warehouses.

            This ware house is similar to manufactures but can be used for safeguard finished goods bulkily. This warehouse offers the facilities for packing, assembling, displaying and bulk braking of goods.

3.  Retail warehouses.

             This ware house is used by the large scale retailers to keep goods to distribute to the final consumers. This ware house is used by the departmental stores, multiple shops, hypermarkets, supermarkets. Etc

4.  Cold storage warehouses.

             This is type of ware house with refrigeration plants for storing perishable goods such as vegetables, fruits, meats, fishes, etc.

 5.  Cash and carry warehouses.

            It is a self service ware house operated by wholesalers, where small retailers or consumers can buy goods in bulk at lower prices. There is no credit sale so buyers should pay on the spot.

 6. Regional distribution centres.

             These are warehouses situated at different locations of the country. These warehouses are used by large scale retailers such as chain stores, multiple shops, super markets, mail order business and hypermarkets in order to supply goods according to the demand arising in their retail outlets.

7.  Bonded warehouses.

            This is a type of warehouse situated at seaports or airports or railway station where there is entrance from other countries. The goods can be kept in this warehouse until the duties are paid on the imported goods. Normally this warehouse is under the control of customs authorities.

FEATURES OF BONDED WAREHOUSES.

1. Bonded warehouses are under the control of customs authorities.

2. They are normally located at seaports and airports or boarders

3. Record the arrival and departures of goods to the countries.

4. Collect duties on imported goods and distribute goods.

5. While in bond, goods can be sampled, packed or blended

6. The owner of the goods can sell them while they are in bond, in which case, the purchaser becomes liable for the customs duty.

IMPORTANCE OF BONDED WAREHOUSE:

1. To the trader:

1. The trader can sell the goods while they are still in bond.

2. Goods can be kept safely until the distribution.

3. He can make the delivery of the goods as he sells them by paying the duty.

4. When the goods are warehoused the trader can perform the necessary operations like grading, packing and labeling to prepare the goods for sale.

5. It helps to export and import goods without delay.

2. To the manufacturer.

1. Bonded warehouses provide the facility of paying customs duties in installments.

2. Bonded warehouses allow processing functions such as assembling, grading, packing, etc.

3. It helps to protect goods without any damage.

3. To the Government.

1. Bonded warehouse enables to collect duties and prevents the evasion of customs duties.

2. It provides trade statistics (information) on the goods imported and exported.

3. The Government can regulate the export and import of certain goods based on this statistics.

DIFFERENCE BETWEEN BONDED WAREHOUSE AND ORDINARY WAREHOUSE

Bonded warehouse	Ordinary warehouse( other)
1. It is located near to the ports of entry into a country	1.  There is no specific location for this warehouse.
2.  It is controlled and supervised by the      Customs Authority.	2.  It is controlled and supervised by the owners.
3.  It is used to store dutiable goods	3.  It is used to store any kinds of goods
4.  It is used in foreign trade for the storage of goods that are exported or imported.	4.  It is used in home trade for the storage of goods that are locally produced, exported or imported.
5. Dutiable goods can’t be removed until the duty is paid	5.  There is free movement of goods into and out of the warehouse.