CHAPTER 9
WAREHOUSING
Warehouse: This is a building or a part of a building where goods are received and stored until need arises for them.
Other terms used to refer to a warehouse are depot, a godown or a silo.
Warehousing; This is the process of receiving goods into a warehouse, protecting such goods against all types of
hazards and releasing them to users when need arises for them
-There are three distinct stages in warehousing process namely:
1. Receiving goods into a warehouse
2. Storing them
3. Releasing them to users
Thus, warehousing helps to create time utility and is therefore classified as an ‘aid to trade’.
Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They
are usually large plain buildings in industrial parks on the outskirts of cities, towns or villages.
They usually have loading docks to load and unload goods from trucks. Sometimes warehouses are designed for the
loading and unloading of goods directly from railways, airports, or seaports. They often have cranes and forklifts for
moving goods, which are usually placed on ISO standard pallets loaded into pallet racks. Stored goods can include
any raw materials, packing materials, spare parts, components, or finished goods associated with agriculture,
manufacturing, and production.
Functions of warehousing
1. Storage of goods is the basic function of warehousing, to bridge the gap between supply and
demand. Warehouses provide protection to the owners against loss due to damage, leakage
and breakage of goods
2. Constant supply; storage is important for those commodities whose production is season but
their consumption is continuous
3. Warehouses help the small traders to reduce their transport charges because goods can be
ordered in bulk and stored
4. Warehouses are designed to offer proper storage conditions such as protection from heat, cold,
moisture, dust and polluting contaminants. In order to preserve quality of materials
5. Some goods are kept in warehouses for the process of packaging or ripening
6. Warehouse provide facilities for grading and classification of products before dispatch
7. Assembling and loading; warehouses are used for bulk building, assembling components,
packaging and the preparation of loading to transportation trucks
8. Warehouses are used to keep records of goods that enter, leave and those in the store
Essentials of a good warehouse
1. Ideal location; the warehouse should be located in that area where goods are produced in large quantities and
equally near the market where most of the goods are consumed
2. Proper space; the building should have sufficient space to store goods in a favorable condition
3. Proper equipment; the warehouse should have the necessary equipment to store, move, lift, arrange and
preserve goods in storage
4. Presences of adequate well trained warehouse staff
5. Proper spaces or bays for loading and unloading goods in bulk
6. Adequate supply of electricity as a source of energy
7. Security features such as CCTV cameras, alarms and adequate fencing
8. Sufficient natural lighting and ventilation in the warehouse
Factors to consider when selecting a warehouse
1. Suitability of the warehouse to provide required storage conditions
2. Accessibility of the warehouse from main transport routes
3. Strong and rigid warehouse structure
4. Sizeable doors of exit and entry to the warehouse for people and machinery like forklift
5. Dimension should provide space for floor and vertical storage of goods
6. Provide space to install machinery that are used to process goods
COMMERCE COURSE NOTES CHAPTER 9 – WAREHOUSING PREPARED BY MR. ANTONY AMBIA Page 1
, Importance of Warehousing to Business
a. It enables a steady flow of goods into the market as the producers store their commodities and regulating their
supply as needs arise;
b. It stabilizes the prices by reducing the supply of goods when the market is faced with surplus and increasing the
supply whenever there is shortage;
c. It protects the goods from adverse weather conditions thereby upholding their quality until they are sold;
d. It facilitates the bridging of time between when the goods are manufactured and when they are demanded. This
is especially so for goods with seasonal demands;
e. It acts as a reserve that can meet a sudden unexpected demand, for instance cereals can be stored in a warehouse
just in case a draught strikes;
f. It enables ample time and opportunity for such practices like blending, branding, packaging, grading and sorting
out of goods before they are sold.
g. Warehousing ensures that goods are protected from loss through theft or pilferage;
h. It enables buyers to inspect the goods before they buy them; Warehousing allows time for some goods to ripen
or mature before they are sold, for instance ripe bananas or tobacco leaves;
i. It encourages specialization in production and distribution. Producers concentrate on producing while
distributors store the goods for sale to the consumers;
j. By allowing manufacturers to buy raw materials in bulk as they await their needs to arise, warehousing ensures
a continuous production schedule;
k. It allows importance ample time to look for a market.
Essentials of a warehouse
In order to be as effective as possible, warehouses require some features and resources. These include:
Proper buildings suitable to house various types of goods;
They should be conveniently located to enhance accessibility by the users;
Proximity to a good transport network system to ensure smooth movement of goods in and out;
The warehouse should be equipped with appropriate protection equipment to keep the goods safe from water,
sunshine, human animals, excess heat and such factors;
It should be spacious enough to enable both storage of goods and movement of goods and personnel;
It should be equipped with proper facilities for handling goods like forklifts and an necessary working materials
and tools to facilitate operation;
It should be equipped with adequate facilities to care for goods for instance cold room facilitates for perishable
goods;
It should be manned by well trained staff for efficient delivery of services;
The warehouse should be equipped with an efficient communication network.
A warehouse should conform to the law of the land.
It should have proper recording system to monitor movement of goods.
TYPES OF WAREHOUSES
A warehouse is a building for storing goods and services until the need for them arises. A warehouse is also usually
referred to as a go down, silo or depot. Warehousing is the process and the systems for relieving goods, protecting
them against all types of hazards and ensuring their availability to those who need them.
Warehouses are usually categorized on the basis of ownership or types of goods stored.
I. Warehouse Types Based on Ownership
a. Private Warehouses - These warehouses are owned by individuals for storing goods. They include:
Wholesalers warehouse – they enable the wholesalers to buy goods from the producers in bulk and prepare
them so that they will be ready whenever the retailers need them;
b. Producer’s warehouses – they store producer’s goods before the goods are released to the market. They are most
conveniently located near the producers or their clients.
c. Retailers – they are commonly owned by some large scale retailers like the chain store and supermarkets to suit
the purchase of goods in large quantities and sell them gradually.
1. Private warehouses
These are built to be used by the investor for the purpose of storing their goods. Manufactures and some major
wholesalers are known to built warehouses for the private storage use
Advantages of private warehouses
COMMERCE COURSE NOTES CHAPTER 9 – WAREHOUSING PREPARED BY MR. ANTONY AMBIA Page 2
WAREHOUSING
Warehouse: This is a building or a part of a building where goods are received and stored until need arises for them.
Other terms used to refer to a warehouse are depot, a godown or a silo.
Warehousing; This is the process of receiving goods into a warehouse, protecting such goods against all types of
hazards and releasing them to users when need arises for them
-There are three distinct stages in warehousing process namely:
1. Receiving goods into a warehouse
2. Storing them
3. Releasing them to users
Thus, warehousing helps to create time utility and is therefore classified as an ‘aid to trade’.
Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They
are usually large plain buildings in industrial parks on the outskirts of cities, towns or villages.
They usually have loading docks to load and unload goods from trucks. Sometimes warehouses are designed for the
loading and unloading of goods directly from railways, airports, or seaports. They often have cranes and forklifts for
moving goods, which are usually placed on ISO standard pallets loaded into pallet racks. Stored goods can include
any raw materials, packing materials, spare parts, components, or finished goods associated with agriculture,
manufacturing, and production.
Functions of warehousing
1. Storage of goods is the basic function of warehousing, to bridge the gap between supply and
demand. Warehouses provide protection to the owners against loss due to damage, leakage
and breakage of goods
2. Constant supply; storage is important for those commodities whose production is season but
their consumption is continuous
3. Warehouses help the small traders to reduce their transport charges because goods can be
ordered in bulk and stored
4. Warehouses are designed to offer proper storage conditions such as protection from heat, cold,
moisture, dust and polluting contaminants. In order to preserve quality of materials
5. Some goods are kept in warehouses for the process of packaging or ripening
6. Warehouse provide facilities for grading and classification of products before dispatch
7. Assembling and loading; warehouses are used for bulk building, assembling components,
packaging and the preparation of loading to transportation trucks
8. Warehouses are used to keep records of goods that enter, leave and those in the store
Essentials of a good warehouse
1. Ideal location; the warehouse should be located in that area where goods are produced in large quantities and
equally near the market where most of the goods are consumed
2. Proper space; the building should have sufficient space to store goods in a favorable condition
3. Proper equipment; the warehouse should have the necessary equipment to store, move, lift, arrange and
preserve goods in storage
4. Presences of adequate well trained warehouse staff
5. Proper spaces or bays for loading and unloading goods in bulk
6. Adequate supply of electricity as a source of energy
7. Security features such as CCTV cameras, alarms and adequate fencing
8. Sufficient natural lighting and ventilation in the warehouse
Factors to consider when selecting a warehouse
1. Suitability of the warehouse to provide required storage conditions
2. Accessibility of the warehouse from main transport routes
3. Strong and rigid warehouse structure
4. Sizeable doors of exit and entry to the warehouse for people and machinery like forklift
5. Dimension should provide space for floor and vertical storage of goods
6. Provide space to install machinery that are used to process goods
COMMERCE COURSE NOTES CHAPTER 9 – WAREHOUSING PREPARED BY MR. ANTONY AMBIA Page 1
, Importance of Warehousing to Business
a. It enables a steady flow of goods into the market as the producers store their commodities and regulating their
supply as needs arise;
b. It stabilizes the prices by reducing the supply of goods when the market is faced with surplus and increasing the
supply whenever there is shortage;
c. It protects the goods from adverse weather conditions thereby upholding their quality until they are sold;
d. It facilitates the bridging of time between when the goods are manufactured and when they are demanded. This
is especially so for goods with seasonal demands;
e. It acts as a reserve that can meet a sudden unexpected demand, for instance cereals can be stored in a warehouse
just in case a draught strikes;
f. It enables ample time and opportunity for such practices like blending, branding, packaging, grading and sorting
out of goods before they are sold.
g. Warehousing ensures that goods are protected from loss through theft or pilferage;
h. It enables buyers to inspect the goods before they buy them; Warehousing allows time for some goods to ripen
or mature before they are sold, for instance ripe bananas or tobacco leaves;
i. It encourages specialization in production and distribution. Producers concentrate on producing while
distributors store the goods for sale to the consumers;
j. By allowing manufacturers to buy raw materials in bulk as they await their needs to arise, warehousing ensures
a continuous production schedule;
k. It allows importance ample time to look for a market.
Essentials of a warehouse
In order to be as effective as possible, warehouses require some features and resources. These include:
Proper buildings suitable to house various types of goods;
They should be conveniently located to enhance accessibility by the users;
Proximity to a good transport network system to ensure smooth movement of goods in and out;
The warehouse should be equipped with appropriate protection equipment to keep the goods safe from water,
sunshine, human animals, excess heat and such factors;
It should be spacious enough to enable both storage of goods and movement of goods and personnel;
It should be equipped with proper facilities for handling goods like forklifts and an necessary working materials
and tools to facilitate operation;
It should be equipped with adequate facilities to care for goods for instance cold room facilitates for perishable
goods;
It should be manned by well trained staff for efficient delivery of services;
The warehouse should be equipped with an efficient communication network.
A warehouse should conform to the law of the land.
It should have proper recording system to monitor movement of goods.
TYPES OF WAREHOUSES
A warehouse is a building for storing goods and services until the need for them arises. A warehouse is also usually
referred to as a go down, silo or depot. Warehousing is the process and the systems for relieving goods, protecting
them against all types of hazards and ensuring their availability to those who need them.
Warehouses are usually categorized on the basis of ownership or types of goods stored.
I. Warehouse Types Based on Ownership
a. Private Warehouses - These warehouses are owned by individuals for storing goods. They include:
Wholesalers warehouse – they enable the wholesalers to buy goods from the producers in bulk and prepare
them so that they will be ready whenever the retailers need them;
b. Producer’s warehouses – they store producer’s goods before the goods are released to the market. They are most
conveniently located near the producers or their clients.
c. Retailers – they are commonly owned by some large scale retailers like the chain store and supermarkets to suit
the purchase of goods in large quantities and sell them gradually.
1. Private warehouses
These are built to be used by the investor for the purpose of storing their goods. Manufactures and some major
wholesalers are known to built warehouses for the private storage use
Advantages of private warehouses
COMMERCE COURSE NOTES CHAPTER 9 – WAREHOUSING PREPARED BY MR. ANTONY AMBIA Page 2
