AUXILIARIES TO
TRADE: C
WAREHOUSING
Aayush khandelwal
XI-C
Introduction
• Definition: Auxiliaries to trade are services that help facilitate the flow of goods and
ensure smooth operations in business activities.
• Key Auxiliaries:
– Banking: Provides finance and credit facilities.
– Insurance: Protects businesses from risks.
– Transportation: Ensures movement of goods.
– Warehousing: Stores goods for future use.
– Advertising: Promotes goods to consumers.
What is Warehousing?
• Definition: Warehousing refers to the storage of goods until they are needed
for sale or distribution.
• Purpose:
– Ensures goods are available when demanded.
– Prevents stock shortages or excess supply.
– Supports business operations by providing safe storage.
Types of Warehouses
• Private Warehouses: Public Warehouses:
• Owned by private • Open for use by
businesses for personal anyone, typically
use.
• Example: Warehouses
rented out.
owned by large retailers • Managed by third-
or manufacturers. party providers.
• Bonded Warehouses: Government
• Used for storing Warehouses:
imported goods • Owned and
before customs duties operated by the
are paid. government.
• Goods remain under • Used to store goods
government on behalf of
supervision. businesses.
Functions of Warehousing
• Storage: Helps businesses store excess stock for future sale.
• Price Stabilization: By storing goods during times of surplus, warehouses help
maintain steady prices.
• Risk Bearing: Warehouses protect goods from theft, damage, and
environmental factors like rain, heat, etc.
• Financing: Warehouses can be used as collateral for loans. Banks and financial
institutions accept warehouse receipts as security for loans.
Importance of Warehousing in Trade
Importance of Warehousing in Trade
• Ensures Continuous Supply: Stores goods when production is high and releases
them when demand rises.
• Improves Customer Service: Quick delivery is possible due to strategic
warehouse locations.
• Supports Global Trade: Helps in the storage of goods that are transported
internationally.
• Reduces Risk of Perishable Goods: Special types of warehouses, like cold
storage, preserve goods like fruits, vegetables, and dairy.
Role of Warehousing in the Economy
• Reduces Production Costs: Manufacturers can produce goods in large
quantities and store them, reducing per-unit costs.
• Promotes Economic Growth: Efficient warehousing supports large-scale trade,
leading to economic development.
• Facilitates International Trade: Bonded warehouses are critical for the import
and export business.
• Employment Opportunities: Warehouses create jobs in logistics, inventory
management, and transportation sectors.
Technological Advancements in Warehousing
• Automation: Use of robots and automated systems to manage storage and
retrieval of goods.
• Inventory Management Systems: Advanced software to track and manage
stock levels in real-time.
• Sustainability Initiatives: Green warehouses focus on energy efficiency, using
solar power and minimizing waste.
THANK YOU
C
