Storage and warehousing enables us to adjust supply according to the changes in the market demand for goods. All irregularities in production a not distribution can be removed by timely adjustment between demand and supply. Price stability in the market can thus be maintained. Warehousing and storage facilities are required by farmers, producers,
processors, dealers, mercantile, agents, exporters and importers, wholesalers, and all those engaged in trade and commerce.
Functions of warehousing: Following are the functions of warehousing:
(i) Warehousing provides a convenient resting place for surplus stock. of goods not required in the market for the time being.
(ii) The gap between certain time intervals between production and consumption can be easily filled by warehouses.
(iii) Goods can be stored in warehouses and their supply regulated according to the demand in the market.
(iv) Owners of goods can transfer the risk of loss through fire, theft, damage to the warehouses, who in turn can transfer it to the insurance companies.
(v) Warehouses also offer many incidental marketing services like assembling, standardisation and grading, packing etc on reasonable charges to the traders storing goods with them.
(vi) Warehouse owners issue warehouse warrants or receipts which can be used by the traders as security for loans from banks.