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Benefits of Warehousing

Warehouses enable storage of goods when their supply exceeds demand and by releasing them when the demand is more than immediate productions. This on one hand ensures a regular supply of goods in the market and on the other hand it helps to stabilize prices by matching supply with demand.

Warehouses provide for safe custody of goods. Businessmen can thus minimize the risks to goods from loss, damage, fire, theft etc. Perishable products can be preserved in cold storage. Also, the goods kept in a warehouse are generally insured.

A warehouse provides facilities for processing, packing, blending, grading etc, of the goods for the purpose of sale. The prospective buyers can inspect the goods kept in a warehouse.

Warehouses provide a receipt to the owner of goods for the goods kept in the warehouse. The owner can borrow money against the security of goods by making an endorsement on the warehouse receipt. By keeping the imported goods in a bonded warehouse, a businessman can pay customs duty in installments.