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 warehouses:

 1. Distribution Centers:

This type of storage facility usually has a large space, which enables fast movement of large quantities of stores for a short period. While, on the other hand, conventional warehouses hold goods for a 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 makes the movement of goods quick, fast, and reliable.

 2. Private Warehouses:

These are owned and managed by 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 at the most economical rates to their members only. The basic purpose to run such warehouses is not to earn profit, but to help their members.

 4. Public Warehouses:

These warehouses are owned by the 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 a 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 facilities used to store imported goods for which import duty is still to be paid. The bonded warehouses run by private agencies have to obtain a license from the government.


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.

1. 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.

2. 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.

3. 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.

4. 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 business.

5. 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 service.

5. 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.

6. 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.

7. 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.

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