Advantages of Warehousing
· 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.