https://www.fastclickmedia.com.ng/components/com_adsmanager/images/default.gifPrivate Warehouses

These are owned and managed by the channel suppliers (manufacturers/traders) and resellers and are used exclusively for their own distribution activities.

Examples:

(a) Warehouses constructed by farmers/producers near their fields/places of work.

(b) Warehouses owned and managed by wholesalers and retailers close to their selling centers.

(c) Warehouses constructed by manufacturers near their production units.

(d) Warehouses taken on rent by retail stores.

(e) Retailers may have several regional warehouses to cater the needs of their stores.

(f) Warehouses owned/leased by a wholesaler where it stores and distributes. Maintaining private warehouses involves fixed as well as variable costs. Examples of fixed costs are basically the investments made in terms of insurance, capital, interests and taxes. The variable costs on the other hand, include maintenance costs and operating costs.

Therefore, due to large expenses, private companies prefer to have assistance of public warehouses and will go for private warehouses under following situations:

(i) Wide presence and firm commitment in the region and necessity to have permanent base in an area.

(ii) Considering long term strategic advantage

(iii) Scope of optimum utilization is assured for long periods.

(iv) To build advantage over competitors.

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