What Is Warehousing? Definition and Guide

what is warehousing

Warehousing is the act of storing goods that will be sold or distributed later. While a small, home-based business might be warehousing products in a spare room, basement, or garage, larger businesses typically own or rent space in a building that is specifically designed for storage.

Warehouse vs. distribution center

You might hear “warehouse” and “distribution center” used interchangeably, but technically, a warehouse provides nothing more than storage. A distribution center, on the other hand, stores product but also fulfills orders.

Warehousing elements

Whether the purpose is strictly storage or storage plus order fulfillment, warehouses use specific elements that help manufacturers, distributors, and retailers monitor inventory and store it safely. An overview of basic elements includes:

  • Shelving and rack systems that offer maximum storage capacity and easy product access.
  • A climate control system for the product being stored. This is particularly important for frozen products or those requiring refrigeration, including certain pharmaceutical or laboratory products, and others that degrade if exposed to too much heat.
  • Inventory control software that tells the product owner – who isn’t necessarily the building owner – where all individual units are in the system at all times.
  • Equipment that can move products from point A to point B – forklifts, pallet jacks, bins that hold products for orders, and conveyor belts, for example. 
  • Shipping supplies for order fulfillment.
  • People who load products into a warehouse and others (“pickers”) who fill orders in a true distribution center, plus those who manage the facility and operation. 
  • Security to protect stored products.
  • Access to cost-effective transportation to bring products in or move them out as orders are fulfilled. That often means easy access to interstates, rail lines, or airports.

The business of warehousing

Warehousing and all that goes along with it is part of a sophisticated industry known as logistics management. Logistics includes procurement, inventory management, and distribution. It falls under the supply chain umbrella, which also includes product development, marketing, sales, and other product-related disciplines.

Warehousing FAQ

What is warehousing?

Warehousing is a process of storing goods in a warehouse for the purpose of distribution, sale, or manufacturing. Warehouses are used for storing goods for an extended period of time and are typically equipped with storage areas, loading docks, conveyors, and other material-handling equipment. Warehousing also involves the movement and storage of inventory in and out of the warehouse, as well as the tracking of goods and inventory.

What are the 4 types of warehousing?

  • Private Warehousing
  • Public Warehousing
  • Contract Warehousing
  • Cold Storage Warehousing

What are the 3 basic functions of warehousing?

  • Order Fulfillment: Warehouses are responsible for fulfilling customer orders by picking, packing, and shipping products.
  • Inventory Management: Warehouses play a major role in keeping track of inventory levels and ensuring stock is regularly replenished.
  • Asset Protection: Warehouses must also protect their assets from environmental factors and theft. They also need to ensure that products are stored in a safe and secure manner.

What is warehouse example?

Warehouse examples include retail stores, distribution centers, cold storage facilities, and manufacturing plants. In retail stores, items are stored and organized in a warehouse and shipped to customers or other stores. Distribution centers are used to store and distribute goods to multiple locations. Cold storage facilities are used to store temperature-sensitive items such as food and pharmaceuticals. Manufacturing plants may have warehouses to store raw materials, finished products, and other materials.