Warehousing – Meaning, Definition and Needs of Warehousing (For CBSE, ICSE, IAS, NET, NRA 2022)

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We eat a variety of food in our daily life. Paddy or Wheat food grains are not produced throughout the year. But we need it them every day. Since the production takes place during a particular season and in specific areas, so there is a need to store these grains systematically. In our home we also keep limited stock for our own consumption. But there are certain places or stores, where these items are stored in huge quantities in a proper and systematic way.

Meaning of Warehousing

  • Warehousing is one of the important auxiliaries to trade. It creates time utility by bridging the time gap between production and consumption of goods.
  • Storage involves proper arrangement for preserving goods from the time of their production or purchase till the actual use or sale. When this storage is done on a large scale and in a specified manner it is called ‘warehousing’ . The place where goods are kept is called ‘warehouse’ . The person in-charge of warehouse is called ‘warehouse-keeper’ .


‘Warehousing’ refers to the activities involving storage of goods on a largescale in a systematic and orderly manner and making them available conveniently when needed. In other words, warehousing means holding or preserving goods in huge quantities from the time of their purchase or production till their actual use or sale.

Need for Warehousing

Need for Warehousing

Seasonal Production

There is a need for proper storage or warehousing for commodities, from where they can be supplied as and when required. Agricultural commodities are harvested during certain seasons, but their consumption or use takes place throughout the year.

Seasonal Demand

Production of certain goods takes place throughout the year to meet the seasonal demand. Seasonally demand like woollen garments in winters or umbrellas in the rainy season. So, there is a need to store these goods in a warehouse to make them available at the time of need.

Large-Scale Production

Production takes place to meet the existing as well as future demand of the products. Manufacturers also produce goods in huge quantity to enjoy the benefits of large-scale production, which is more economical. Large Scale Production need to be stored Properly until they are not sale.

Quick Supply

It is essential to stock goods near the place of consumption so that without making any delay these goods are made available to the consumers at the time of their need. Both industrial as well as agricultural goods are produced at some specific places.

Continuous Production

Continuous production of goods in factories requires adequate supply of raw materials. So, there is a need to keep sufficient quantity of stock of raw material in the warehouses to lead to continuous production.

Price Stabilization

Scarcity in supply of goods may increase their price in the market and vice versa. Again, excess production and supply may also lead to fall in prices of the product. Benefit to maintaining a balance of supply of goods warehousing ensure price stabilization. There is a need to keep sufficient stock in the warehouses to maintain a reasonable level of the price of the goods in the market.

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