This unit is about Ware housing and the different methods or ways in which they are used.


Ware housing is a building where goods are stored or kept until they are required for use. Ware housing is an aid to trade which is a means of keeping and storing of goods and raw materials to protect them against damage from pests, theft, atmospheric condition etc. this is aids to trade ensures goods reach consumer in the desired form and a steady supply of goods of row materials is certain.

Importance of ware housing to business men

  • It encourages more production which enables producers to produce on a large scale since storage is assured.
  • It helps to maintain a constant supply of goods to consumers.
  • Certain goods that are seasonal like rain coats, umbrellas and seasonal cards can be stored until they are required for use.
  • Ware housing stabilizes prices because it stores goods whose supply fluctuates periodically.
  • Ware housing protects goods against bad weather conditions, pest, theft, damage, waste etc
  • Goods are stored so that the required quality is ensured. Some goods have to mature before consumption eg wires
  • Ware housing reduces conjunction at terminals such as airports, sea ports etc. since imports will stored a waiting the clearance of taxes
  • Ware housing stores raw materials which are waiting processing by manufactures
  • It is a valuable source of employment for those who are working in its various departments
  • Activities like advertising through branding, packing and so that can be done in a ware house
  • Goods are kept until taxes are paid in bounded ware houses. This assists both the tax payers and the revenue authority in terms of convince of payment.
  • Goods in band can also be broken down into smaller quantities to meet the needs of the retailers.

Characteristics of a ware house

In order for ware house to operate efficiently and effectively, it should have the following;

  • Adequate storage space for the goods.
  • It should have qualified staff e.g purchase officers, account officers, transport officers etc.
  • It should be located near traders e.g wholesales, retailers where goods will be sold.
  • It should have tight security to offset the dangers of theft.
  • It should be insured against loss.
  • A ware house should have a good transport network leading to it.
  • It should have good facilities e.g refrigeration for storage of perishable goods.

Organization of a ware house

Ware houses are organized according to the quantity and nature of goods to store. Some ware houses are so big and have several departments. A typical large ware house would have a general manager and of the following department;

  • Purchase department

This is headed by a purchase manager responsible for buying stock for the ware house. This department is concerned with the following;

  • Placing orders for gds needed in the ware house
  • Looking for cheap sources for supply of goods
  • Accessing the changes in fashion and taste
  • Sales department

This department is headed by a sales manager or marketing officer who ensures that the goods stocked will have market. The department is responsible for the following;

  • Carriers out sales promotion strategies
  • It receives orders from buyers and ensures tht goods ordered are dispatched
  • It handles customers’ complaints
  • It ensures that the goods required are available
  • Transport department

It is headed by a transport offer that ensures the effective distribution of goods. The department is concerned with;

  • Moving goods from suppliers to the ware house
  • Delivering goods for buyers who purchase in large quantities
  • Ensure that the necessary vehicles are available.
  • Account department

It is headed by the finance manager or chief account and it is responsible for;

  • Handling the budget for the ware house
  • Prepare invoices and financial statements
  • Prepares and keeps financing records
  • Legal department

It is headed by a accompany secretary or legal officer. It handles legal procedures and legal documentations of the ware house such documents include; insurance policies eg the certificate of incorporation. The legal department insures that there is a good relationship with the general public and the ware house.

  • General administration department

The ware house is headed by a board of directors under a skilled chair man. Under the board, there is a managing director or general manager. General Manager is in charge of general administration.


organisation of a ware house


Types of ware houses

  • Private ware house

They are operated by business firms or entries for their own use. They are either wholly owned or can be hired either to manufacturers, whole sales, retailers, retailers, etc and are usually located near manufacturers premises.

  • Whole sellers ware houses

They are owned by whole sellers and they store and handle goods of par particular whole sellers, these are normally large stores because whole sales handle large stocks of goods and store seasonal goods to ensure a seasonal supply (steady flow). They are located near whole sales shops or they may be part of whole sellers’ premises.

  • Manufacturers ware houses

These are owned and operated by manufacturers to store raw materials and goods produced by the manufacturer. They may be located near the factory, near the market or at any convenient part/point to enable the marketing of the goods. These are not very large because whole sales normally collect goods from the manufacturers immediately they are produced.

  • Public ware houses

A public ware house is either owned by individuals for a private firm or government. It carries out ware housing as a business. It is called a public ware house because it is open for use by any members of the public either to hire or to rent.

Public ware house are located in strategic places like terminals ie at seaports, air ports, railway stations, loading and unloading points etc.

Benefits of public ware houses

  • In a public ware house, goods can be branded, blended and prepared well in a ware house
  • Inspection of goods can be done so that any damage is dealt with accordingly and immediately.
  • Goods may be marketed while in the ware house.
  • It gives time to the business man (importer) to collect money for the duty or tax.
  • The business man is also able to find transport means for his goods while they are under safe custody.
  • Storage is also to protect goods against bad weather conditions and pests etc.
  • Bonded ware house

This stores dutiable goods ie goods on which duty or tax are to be paid. Goods are pending customs payment. They are kept by government officials but do not necessarily belong to the government.

They are not very large ware houses and if goods are sold in bond, they are sold while on a bonded ware house.

The customs duty is then shifted to the buyer. Goods can also be packed, processed, pleaded and marketed in abounded ware house.

Importance of warehouses to traders

  • Goods can be advertised and prepared for sell while in a bonded ware house ie they can be repacked, blended and branded.
  • Goods can be broken into small quantities if the owner cannot raise enough money to pay the whole amount of tax.
  • An importer decides to re export the goods are in bond some goods lose weight while in storage which reduces their tax if it is based on weight.
  • For the government bonded ware houses, ensure that no taxes are evaded.
  • Enables govern to check for smuggling of goods and importation of prohibited goods. This is because goods are physically checked in bonded in b ware houses. This chocking when customs officials conduct a search esp. on a ship with the aim of finding dutiable goods is technically called
  • It enables government to collect taxes easily and economically.


The government may make a partial or full refund of customs duty to the importer who imports them as finished goods. This is what is referred to as customs drawback.



SEE ALLAdd a note
Add your Comment