Advantages
·
It safeguards the stock of the merchants
who do not have storing place.
·
Warehouses reduce distribution cost of
the traders by storing the goods in bulk and allow the trader to take the goods
in small lots to his shop.
·
It helps in selection of channel of
distribution. The producer will prefer whether to appoint a wholesaler or
retailer.
·
It assists in maintaining the continuous
sales and avoids the possibilities of “out of stock” position.
·
It creates employment opportunities for
both skilled and unskilled workers, to improve their standard of living.
Warehousing is not effective because of
the following reasons:
·
There are no adequate transport
facilities between the place of production and warehouses.
·
Lack of sufficient storage facilities
for different commodities such as perishable and non-perishable commodities.
·
Complicated formalities are to be
fulfilled at the warehouses. The illiterate and innocent farmers are not able
to cope with these procedures.
·
Complicated process of Barcode
technology can reduce the storing of goods by some producers.
·
Unavoidable delay for obtaining
financial assistance may cause loss to the owner of goods.
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