Products in storage are a buffer in case of increased demand for the product. Alternatively, if demand is irregular, producers can accumulate larger quantities of the product and store it until it is needed. The type of warehouse facility and its location are dependent on the needs of the business. Warehouses provide producers and buyers with flexibility.

Warehousing processes serve several functions.

Receive products
Assume responsibility for products
Update records of quantities for each product
Mark items with codes or by physical characteristics for inventory purposes
Divide products into categories
Place products in storage and hold until needed
Find specific goods to fill customer's orders
Collect these goods and put them together
Change inventory records
Construct order documents
Package order and send to buyer