Pros and Cons of Free Warehouse

The free warehouse is a space offering storage of goods, services for handling and maintenance of goods. It also takes into consideration the security of the goods. There are custom regulations that are put on the warehouses so that it cannot be considered on a community territory.

The warehouse accepts all types of goods whether imports or exports. This type of warehouse offers tax benefits to the business people.

Pros and Cons of Free Warehouse

Pros of Free Warehouse

  1. Tax-free

Goods stored in this type of warehouse are tax-free. The business people are not required to pay duty and tax for their goods. This is the reason as why most business people prefer to use this type of warehouse. The goods are only paid for tax after they leave the warehouse.

  1. Stores goods for a long time

This type of warehouse allows business people to store their goods there until they get the market for the goods. This is advantageous because the business people will have ample time to look for the market of their goods and sell them when they are on-demand hence making high profits.

  1. Other services are offered

The business people may decide to mix the goods, re-package, or even manufacture when the goods are still in this warehouse. This enables them to utilize the storage space for other services hence not paying for any other space later to do the exercise. This makes them minimize their expenses.

  1. Flexibility

Free warehouses are flexible in that the goods can be brought in to the warehouse at any time and can also be taken away at any time hence no restrictions on when to take the goods.

Cons of Free Warehouse

  1. Lack of storage space

As it is free and other services can still be offered it makes it suitable for many people and this may lead to congestion in the warehouse. As a result, many people may lack the storage space.

  1. Risk of theft

There can be a risk of theft because there will be a lot of goods that can easily make people confuse their goods which may result in other people losing their goods. The business person or the company must provide security to his or her goods.

  1. The high cost of constructing

As the warehouse offers other services such as manufacturing, then the warehouse is supposed to be equipped with the necessary facilities so that the business people will be able to do the operations from the warehouse. This may turn out to be expensive on the side of the government.

  1. Needs license from the custom department

Before a free warehouse is established it requires a license from the authorized body on customs issues. This may turn out to be very involving. The license cannot be transferred to another person.

Summary

Free warehouses are good on the side of the business people as it will reduce the expenses that the company is required to meet. This makes the best warehouse to be used by business people especially when they require other services such as manufacturing and repackaging of the goods.

Leave a Comment