SS1 Commerce Lesson Note on Types of Warehouses

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TYPES OF WAREHOUSES

Meaning of warehousing: This is concerned with all activities that help in storing goods until they are needed/demanded in order to ensure uninterrupted and regular supply.

FACTORS TO BE CONSIDERED IN SITING A WAREHOUSE

1. Total operating cost
2. Proximity to the factory
3. Means of transportation
4. Availability of basic social amenities
5. Cost of rentage or construction
6. Nearness to the consumers
7. Nature of the product
8. Distribution centre

Features of a warehouse

1. Large hall: a warehouse is a large open space house that contains large stock of goods or raw materials. It is large to the extent that truck, containers can go in.
2. Equipment: A warehouse is fixed or equipped with the necessary equipment for the warehousing job e.g. crane.
3. Security: There is always heavy and tight security around the warehouse. This is to protect it from burglary and theft and to provide safety for the stored goods.
4. Workers: A warehouse has a number of workers ranging from the warehouse manager, supervisors, clerks etc.

IMPORTANCE/FUNCTIONS OF WAREHOUSING

1. Provision of storage facilities: it helps to store goods safely until they are needed. It allows goods to be stored in anticipation of demand.
2. Ensuring price stability: The development of warehousing has helped to reduce fluctuations in price.
3. Provision of employment: it provides job opportunity for different people such as security personnel, store attendants, clerks and driver
4. Source of revenue: government and individual can generate from warehouse. It can be rented out to other users.
5. Provision of security for goods: it provides protection and security for goods.
6. Makes seasonal goods available
7. Facilitates prepackaging
8. Checking of smuggling
9. Keeping goods ahead of demand
10. Ensures constant supply of goods

TYPES OF WAREHOUSE

1. State warehouse: this is government owned warehouse where seized goods are kept until they are needed/sold. It is a store where contraband or smuggled goods seized by the customs authorities are kept until they are auctioned (sold)

FEATURES OF STATE WAREHOUSE

1. The government owns it
2. Smuggle or contraband goods are kept in it
3. Goods kept in this warehouse are auctioned to the member of the general public
4. Manufacturer’s warehouse: this is the warehouse owned and equipped by the producer at the factory site or depot in order to store his products until they are sold. It enables the producer to produce ahead of demand.

FEATURES OF MANUFACTURER WAREHOUSE

1. The producer owns it
2. It is located at the factory/depot
3. It is designed and equipped by the producer

Wholesale warehouse: this is owned and managed by the wholesaler for storing his wide range of purchased from various producers. Wholesale warehouse are located near distribution or sales centres.

FEATURES OF WHOLESALE WAREHOUSE

1. It is owned and managed by the wholesaler
2. It is constructed to suit his line of business
3. It is located near sales centres
4. Bonded warehouse: This is located beside the port and approved by the customs for the temporary storage of dutiable goods on which duties have not been paid. Goods imported into the country are kept until duties are paid on them. It is under the supervision of custom authority.

FEATURES OF BONDED WAREHOUSE

1. It is under the control of custom authority
2. Goods kept there are not removable until duties are paid
3. They are located at the port
4. Duties have been paid on goods kept there
5. The goods store there are referred to as bonded goods
6. A warrant will be issued to release the goods

USES OF BONDED WAREHOUSE IN INTERNATIONAL TRADE

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