All of the types of eCommerce businesses selling physical goods must rely on a comprehensive
warehousing strategy to satisfy customers. The goal in business is to be profitable at scale. This
means you’re able to increase your profits without excessive cost increases. This can be difficult
with physical product businesses, as there’s always a cost tied to goods. If you sell any kind of
physical item, you need a location to store increasing numbers of units. 
This is where warehouses come in. Product businesses need enough room to store, package, and
ship their products. A warehouse makes this possible, so you don’t need to work out of your office or

the Importance of Warehousing
Moving your product business to a warehouse may seem overwhelming at first. Thankfully, it’s easy
to explain the importance of warehousing in three core concepts.
1.Keeping Goods Safe
First and foremost, warehouses are necessary for keeping goods safe from damage, loss, or theft. It
allows you to separate your inventory from office space and institute a daily product workflow. 
2.Streamlining Purchase Decisions
Second, warehousing your products streamlines your purchasing decisions. Instead of merely
guessing what your reorder point is (by not using the reorder point formula), you can find out by
reviewing your purchase and shipping reports.
This information shows what’s popular and what’s not in hard numbers. You can then prioritize
incoming stock based on the trends seen in your reports.
If you’re having trouble finding the data you need, consider investing in an ERP implementation. The
consolidation of business data like purchasing and financial reports is just one of several benefits of
an ERP system.
3.Develop Optimal Processes
Third, over time, you can develop a better warehouse management process flow for your
operations. If you’re not using a particular raw good as often as expected, talk with your supplier to
arrange an alternative. If your current shipping provider isn’t delivering your products on time, you
may want to consider changing providers.
There are dozens of reasons for warehousing, but you may only need a few to make a difference for
your business. Depending on the type of product(s) you sell, your reasons for warehousing can
include the following: 
 Storing inventory long-term
 Outsourcing picking and packing

 Adhering to specific legal requirements
 Protecting high-value products
 Keeping temperature-controlled goods safe
 Decreasing time spent on low-impact decisions

Here are some commonly used types of warehouse:

 1.Distribution Centers:

This type of storage facility usually has large space, which enables fast movement of large
quantities of stores for short period. While, on the other hand, conventional warehouses hold
goods for long time, say 2 months or 1 year.

These warehouses basically by nature, serve as points in the distribution system at which goods
are procured from different suppliers and quickly transferred to various customers. These
centers provide computerized control, which make movement of goods quick, fast and reliable.

 2.Private Warehouses:
These are owned and managed by the channel suppliers (manufacturers/traders) and resellers
and are used exclusively for their own distribution activities.

3. Co-operative Warehouses:
As the very name implies, these warehouses are owned, managed and controlled by co-operative
societies. These societies provide storage facilities on the most economical rates to their
members only. The basic purpose to run such warehouses is not to earn profit but to help their

 4.Public Warehouses:
These warehouses are owned by government and semi government bodies and are made
available to private firms to store goods on payment of rent. The public warehouses are usually
set up to help small traders who are not in position to have their own warehouses due to
financial constraints.

 5.Bonded Storage:

These warehouses are owned, managed and controlled by government as well as private
agencies. Bonded warehouses are storage facility used to store imported goods for which import
duty is still to be paid. The bonded warehouses run by private agencies have to obtain license
from the government.

Advantages of Warehousing
There are numerous advantages of warehousing for an eCommerce business, online marketplace,
or small business. Understanding how each advantage fits into your business model can clarify the
warehouse approach that suits you best. 

Control Over Products
Keeping all of your product stock in a warehouse allows you to maintain control over it. You can
leverage inventory control, remove irrelevant products, and pack orders in a centralized location. 

Improved Workflow
Using a warehouse to manage orders improves the workflow of your entire facility. By monitoring
your warehouse operations over a specific period of time, you can quickly uncover inconsistencies.
This enables you to dedicate time and attention to resolving any such issues. 

Faster Shipping and Delivery
Packing your products up in the same warehouse they were received in allows shipping to
effortlessly handle their part. Customers expect fast turnarounds, and by eliminating lag time, you’re
likely to win repeat business. 

Close to Target Market
Many companies place their warehouses in locations close to their target markets. This supports
fast shipping and easy returns–two factors that customers have high standards for. The faster each

order is shipped and delivered to customers, the more time you have to focus on growing your

Long-Term Storage
Another benefit of warehousing is safely storing goods with a long shelf life. Instead of placing small
orders frequently, you can place bulk orders and ship products out as they’re sold. This reduces
time spent on receiving and allows both you and your staff to focus on fulfillment and customer

Risk Minimization
It’s easy to watch a handful of products when your business is small. As you grow, preventing
losses becomes more challenging. The benefits of warehousing include appropriate equipment for
minimizing risk, especially for cold items and perishable foods. 

Task Delegation
Maintaining your product inventory by yourself, all while handling sales and marketing, is time-
consuming and costly. By warehousing your products, you delegate the former responsibilities to
staff members.
Warehousing Is Wonderful
It’s easier to take the next step in your eCommerce business now that you have a firm
understanding of warehousing. Being able to identify the right warehouse fit and relevant
partnerships can take some time; don’t rush yourself. Remember that no two businesses are exactly
alike, so make your warehouse decisions based on your personal needs.