Warehousing is a fundamental part of most businesses as they hold goods for a long time awaiting distribution to significant stores, small retailers, or individual consumers. Companies that deliver the service are responsible for ensuring distribution and delivery are optimal to ensure high customer satisfaction and improved productivity.
In a supply chain, warehousing makes the process more effective by ensuring a constant flow of goods without interruptions. Therefore, whether you’re running a small or established business, you need a partner, and services like ArdentX offers reliable warehousing services to run your business efficiently. For this reason, here are the four types of warehouses and how they work to help you decide what’s ideal for your business.
Types of Warehouses
A warehouse stores different goods, and it acts as a bridge between production and time of consumption. Manufacturers produce goods in advance to ensure there’s no shortage in the market. Hence, the excess is stored in a warehouse. Here are the four categories of warehouses;
Climate-Controlled Warehouse
Perishable products are kept in cold room storage at controlled temperatures. These goods include; frozen foodstuffs, medicines, and flowers. Climate-controlled warehouses function with refrigeration within the warehouse and also during shipping.
Public Warehouse
A public warehouse is operated under the law of storing goods to help others manage their excess production at a fee. Sometimes an importer can receive a consignment, yet he’s not ready to take it into custody. At this point, they can seek the services of a public warehouse to hold the goods until he’s prepared to supply. Similarly, in the supply chain, a warehouse comes in between the time the goods are produced, and the time required for use.
Bonded Warehouse
Bonded warehouses are used as storage facilities for imported goods without paying levies. Some imported goods are costly, so bonded warehouses provide storage for importers and exporters to sell then pay later. Primarily, these warehouses are controlled by the government or customs authorities and work under specific guidelines. They’re essential because;
- If goods don’t meet the local demand, they can be exported and exempt from paying levies
- They lift the financial burden on traders since duties aren’t paid until the goods are released for sale
- Different goods are stored in the same warehouse
- Most bonded warehouses have connections with freight forwarding companies, making it easy for traders to distribute or ship products.
Private Warehouse
Private warehouses are owned by the owner of the goods, like a wholesaler, for future supply to retailers. Manufacturers produce excess goods in anticipation of future demand or unknown customers. A wholesaler purchases bulky goods in advance and stores them for future supply.
The Functions of a Warehouse
Warehouses hold facilities for different goods on a large scale in an orderly manner. They protect goods against extreme heat, storms, and wind to preserve freshness and reduce losses or spoilage. Let’s discuss further the functions of a warehouse.
Goods Storage
A warehouse is a storage facility, which is its primary function. The goods are kept from the time they’re manufactured until their time of consumption.
Protection
Goods kept in a warehouse are safe from harsh weather or destruction from environmental factors like the sun, wind, or rain. Holding goods in a warehouse helps retain or preserve their nature and reduces spoilage losses.
Risk Bearing
Warehouses bear the risks that come with storing goods. Once a trader hands goods to a warehouse keeper, ensuring they remain safe and fresh is also passed to the warehouse keeper. The warehouse keeper must ensure that goods are returned to the trader in the best condition for business to carry on. Supposing damages or theft, the warehouse keeper will bear it all. Hence, they’ll take all precautions to ensure no mishaps.
Financing
Once goods are deposited in a warehouse, the depositor is issued a receipt as proof of ownership. In return, a warehouse can give a document in favor of the owner as a warrant to the warehouse keeper, and the record is transferable through approval and delivery. Therefore, while the goods are in warehouse storage, the owner can get loans from financial institutions using the warrant as a security. Some warehouses also give financial advances to depositors for a while, using the goods as security.
Grading and Branding
Some warehouses perform grading and branding of goods on behalf of a manufacturer, importer, or wholesaler. Other warehouses also act as mixing facilities to blend and package goods for the convenience of sale.
Transportation
In some instances, warehouses offer transport services to bulk depositors. They collect goods from production facilities and bring them to the warehouse. Even with interests already in the warehouse facility, they transport them where the depositor requests.
Warehouse Management – Cut the Cost Without Cutting Corners