Commerce Form 5 Topic 6 Warehousing Notes PDF Download
WAREHOUSING
This is an aid to trade involving storing of goods and raw materials against atmospheric conditions, pests, theft etc. Therefore it is protection offered to goods when they are not required until they are required.WHY IS WARE HOUSING NECESSARY (FUNCTIONS OF WARE-HOUSING)1. It enables a stock of goods to be stored until they are required.2. It enables manufacturers to continue with the production processes as there is room to store the produced goods.3.Seasonal goods are kept for consumption during periods of no consumption.4.It facilitates preparation of goods for sale through advertizing, sorting, weighing, parking, branding of goods.5. It enables the storage of goods to prevent price fluctuations especially with agricultural goods or products.6. It enables the importer or trader to look for the market while the goods are kept at the ware house.7. It enables the breaking of bulk to meet the needs of individual retailers.8. It keeps the stored goods in strict and suitable conditions against bad weather and any form of contamination.9. It enables goods to be stored to meet a continuous flow of goods and thus avoiding scarcity.TYPES OF WARE HOUSES(a) Public ware houses.
These are privately owned by people whose business is to rent out spaces to those who may have need for temporary storage of stock. They are usually located at sea ports, railway stations, air port for any importer or exporter who has limited space in his premises. They are often used for storing goods for short periods which are in transit.(b) Private ware houses.These are ware-houses owned by private individuals for storing their goods.
They may be for wholesaler’s, ware-houses owned by manufactures or whole sellers where they store their goods before sale.(c) Bonded ware-housesThese are the special kind of ware-houses where imported goods are kept until payment of customs duties is made. Goods are only released from the bonded ware-house after the customs duty is paid and a release warrant is issued.(d) Free ware-housesThese are the ware-houses which keep goods that are not subjected to any customs duty or controlled by customs authorities.
ADVANTAGES OF BONDED WARE-HOUSES TO THE IMPORTERS1.The importer may not pay the customs duty if the goods are bought while in bond but it is passed on the buyer.2. Goods may advertised, blended, branded and classified in the bonded ware-houses.3.The importer may look for buyers before paying the customs duty.4.If the importer desires to re-export the goods, the customs duty is not paid but only pays storage charges.5.Some goods lose weight while in the bonded house so the customers duty paid becomes lower if it is based on the weight of goods (specific taxi).
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