Importance of Warehousing :
(a) Seasonal production : Several commodities such as rice, wheat, sugar, etc., are produced during a particular season but they are consumed throughout the year. For example, potato is produced mostly in winter season but is demanded throughout the year. Perishable products like vegetables, fruits, eggs, etc. are stored in cold storage to make them available to consumers throughout the year.
(b) Seasonal demand: Some products such as electric fans, coolers, umbrellas, rain coats, woollen cloth, etc., are demanded in a particular season. But they are produced throughout the year. Such products have to be stored in warehouses so that the demand during the particular season can be met.
(c) Equalisation of demand and supply : Warehousing is needed to adjust the supply of goods with their demand in the market. During depression, there is little demand and goods have to be stored until the demand increases. Some businessmen store goods for making more profits from expected rise in prices. Warehousing helps producers to realise remunerative prices.
(d) Scattered demand: Goods are produced at some places far away from different places of consumption. Goods need to be stored near the market so as to make them available to the buyers whenever and wherever they are required.
(e) Stability in prices : It is necessary to store goods to avoid violent fluctuations in prices. Producers and merchants can secure better prices by storing goods in warehouses.
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