Types Of Warehouse: Which Will You Prefer?

5 Types Of Warehouse – Explained

Here is a summary of 5 types of warehouses that you need to know.

1. Private Warehouse

They are usually owned and managed by channel suppliers such as traders and manufacturers. They can also be owned by resellers and are used for their distribution activities exclusively. Some types of private warehouses include:

• Warehouses constructed by producers or farmers near their places of work or fields respectively.

Warehouses managed and owned by retailers or wholesalers near their selling centers.

• Warehouses constructed by manufacturers near their production centers.

• Any warehouses being rented out by retail stores.

• Retailers might also operate a few regional warehouses to cater to the needs of each of their stores.

• Wholesalers can lease or own warehouses where they store and distribute goods.

Since having private warehouses can be quite expensive, most private companies often opt for public warehouses. However, they may opt for private warehouses under the following conditions.

• If they want a firm commitment because they have a wide presence in a particular region so they can have a permanent base in the area.

• If they are considering a strategic advantage, especially in the long-term.

• Any scope of optimal utilization will be assured for long periods.

• To get a huge advantage over any competitors.

2. Public Warehouse

These are owned by governmental and semi-government bodies. They are availed to private firms to store their goods on a rental basis. They are often set up to help small scale traders who can’t afford their own warehouses. It’s a move to promote trade and industry where the state or the central government provides storage needs to retailers or traders.

Anyone can use these facilities to solve their short-term distribution needs. There are cases where retailers might find their own private warehouses insufficient especially where there are increased sales or if their facilities have reached top capacity. They can also use these public warehouses if they are making a huge purchase of products for any reason. Manufacturers, producers, importers, and exporters mostly use these public warehouses effectively.

3. Bonded Storage

Private agencies, as well as the government, are responsible for owning, managing and controlling these bonded storage warehouses. They are mostly used for storing imported goods when the import duty hasn’t been paid yet. Any bonded warehouses owned by private agencies need to have a valid license from the government.

As such, the government can follow up on private firms to make sure they pay their taxes on time. If they don’t pay their liabilities, importers will not have access to the goods. Most bonded warehouses are found near dock authorities and ports. They are liable for both custom duty and excise duty taxes.

4. Co-operative Warehouse

As the name suggests, co-operative societies own, manage and control these warehouses. They provide storage facilities with economic rates to their co-operative societies. The warehouses don’t earn profits from their transactions but basically help their members.

5. Distribution Center

They have a large space and enables fast movement of goods in large quantities especially during a short period. There are also conventional warehouses that hold goods for a long time, especially between 2 months to a year. Note that distribution centers work as points in the distribution chain where goods can be acquired from different suppliers and transferred to customers effortlessly. They have computerized control to make the movement of goods fast, quick and reliable.

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