Warehousing is the act of storing goods produced or bought in a place until they are needed. Warehousing ensures that there is a regular and steady supply of goods. The producer or wholesaler must hold stock until the consumers demand for it.In order words, warehouse is a place where goods are stored until they are demanded by the consumers.

                TYPES OF WAREHOUSES

There are five types of warehouses, namely:

  1. Bonded
  2. State/ Queen
  3. Wholesale/ Ordinary
  4. Public
  5. Manufacturer.
  1. BONDED WAREHOUSE: Bonded warehouse is a place where goods whose custom duties have not been paid are stored until the duties are settled. Bounded warehouse is usually located at the port for storing goods until the duties are paid.
  2. STATE/ QUEEN WAREHOUSE: State or Queen Warehouse is owned and controlled by the government of a country. It is a place where contraband or smuggled goods seized by the customs authority are kept until they auctioned (sold).
  3. WHOLESALE/ ORDINARY WAREHOUSE:wholesale warehouse is owned by the wholesaler to keep or store all the variety of goods bought. From the stored goods, retailers are assured of adequate and regular supply of goods. Wholesale warehouse are located near distribution or sales centres.
  4. PUBLIC WAREHOUSE: Public warehouse is owned and operated by private individuals who let it out to anybody for safekeeping of goods.They are usually located near seaports, airports etc.The person who hires a public warehouse pay rent to the owner for services rendered.
  5. MANUFACTURERS WAREHOUSE: Manufacturers warehouse is owned by the producer or goods to store their products until they are demanded. Many produces have warehouses which are located in the factory to store goods produced. Some manufacturers have warehouses at regional distribution centres, e.g. coca cola.


  1. Location of the Factory: one factor which must be taken into consideration is the proximity of a warehouse to the production ground, i.e., factory.
  2. Nearness to the Market: A producer will consider the location of the market before siting his warehouse. He will normally prefer to locate it near the market.
  3. Nearness to the Distribution Centres: A warehouse has to be located near the distribution centres.Recently, Coca cola has introduced mini – warehouse (depots) at various sales point over Lagos.
  4. Operating Cost: He must also consider the operating cost of the warehouse. It has to be located where the operating cost will not be too high.
  5. Cost of Building Ware house: Before siting a warehouse, the cost of building or renting it has to be carefully considered.
  6. Transportation: The mode of transportation must be taken into consideration. The warehouse must be sited in a place that is accessible by road or rail.


  1. Stability of price: Warehouse ensures that there is no fluctuation in price of goods. It helps to stabilize priceof goods.
  2. Seasonal Problem is eliminated: Since goods are stored until they are needed, some seasonal problems pertaining to production or sales are elimination.
  3. Storage Facilities: Warehouses serve as storage facilities; they are provided for keeping the goods safely.
  4. Ensures Production of goods Ahead of Demand: Warehouse facilities ensures that goods are produced ahead of demand.
  5. Provides Security for Goods: it ensures effectives check and adequate security for the products.
  6. Facilitates Repackaging: In the warehouse, repackaging and branding 0f goods are facilitated.
  7. Employment Opportunities: Warehousing creates job opportunities for many people, e.g. clerks and managers.
  8. Ensures Constant Supply: Constant and steady supply of goods throughout the year is made possible through warehousing.


  1. Problem of Pilfering: Goods stored in the warehouse are sometimes stolen by the workers entrusted in the care.
  2. Inaccessibility: Certain location of some warehouses turn out to be a problem which the roads are not easily reached by vehicles.
  3. Unreliable Supply: There are situations when the suppliers of goods find it difficult to supply to the warehouses. This tends to render such warehouses non-functional.
  4. Problem of Stock Valuation: Workers in the warehouse sometimes find it difficult to take accurate record of goods stocked in the warehouses.
  5. Lack of qualified manpower: Inadequate manpower is not easily available to manage the warehouses. Quick or unqualified staff are sometimes engaged to manage the warehouses.
  6. Problem of Deterioration: Most of the goods stored in the warehouses may deteriorate thereby leading to spoilage or poor quality of the goods stored.