People come across two logistic terms, ‘warehouse’ and ‘godown’, when looking for storage space.
In the logistic world, both these terms are often used interchangeably, but are these two terms similar? Yes, but they only have one major similarity: storing goods.
So, how do they differ from each other? And why is it important to know the difference between the warehouse and godown? Read the blog to know the detailed difference between both.
What Is a Warehouse?
Warehouses are huge enormous buildings used to store, pack, label and ship goods.
In other words, warehousing is a key between the customers and manufacturers. It is a place where finished products and raw materials are stored.
In fact, besides storing, processing and sometimes even manufacturing of semi-finished products take place in the warehouse to ease out all the logistic operations.
Warehouses are one of the most important parts of the Supply Chain Management System.
| FACT TO KNOW:
Warehouses are also known as the backbone of the e-commerce business, it is the place from which the whole business runs efficiently. The surge in e-commerce has increased the demand for warehouses a lot. For instance, according to the report of research and market, the warehousing market of India is valued at approximately INR 1,206 Bn in 2021 and will reach the milestone of 2,872 Bn in the year 2027. |
From the layout of the warehouse to all the warehousing functions, everything is well-organised to make the logistic operations easier and more efficient.
Some specific things about the warehouse:
- Warehouses have adequate ceiling heights, stronger roofs and floors, a well-managed inventory, and an army of workers to handle the inventory properly.
- All the things in the warehouse are organised according to different categories so workers can easily find the items.
- Most modern warehouses are equipped with a Warehouse Management System to track and manage the inventory efficiently.
- Warehouses have racks, pallets, forklifts, conveyor belts, and any other such equipment to make the warehousing process faster and easier.
- Warehouses have tight security systems.
- Warehouses offer temperature-controlled options to store perishable items such as medicines, food and beverages, etc.
Who Uses Warehouses?
A warehouse is a commercial space used by importers & exporters, manufacturers, logistic companies, distributors, and e-commerce companies.
Functions Of Warehouse
Warehouses have a particular warehousing process, such as
Receiving:
Receiving is one of the most crucial processes of warehousing. The products are received and accurately stacked in the pallets or racks.
Put-Away:
After receiving the stocks the goods are placed on the assigned racks.
Storage:
Storage is one of the main functions of the warehouse. The items are stored until they are ready to be shipped.
Picking:
The product is picked from its specific pallet when the order is received.
Packing:
After receiving, the product is packed, labelled, and ready to be shipped.
Shipping:
It is the last step of the warehousing process. After the order is packed, then it is shipped.
Advantages Of The Warehouse
Warehouses have a lot of advantages, such as
- The warehouses provide a centralised location to store the products and run various logistic operations from one place. Moreover, an accurate warehouse location can save a lot of transit costs.
- In warehouses, the products are safe and well-managed.
- Due to the warehouses, there is a continuous supply of the products.
There is only one drawback of the warehouse is that they are costly. Only a few businesses can afford to buy a warehouse.
However, a business always has the option to rent a warehouse at affordable rates and can enjoy warehousing services.
What Is Godown?
Godowns are a type of smaller warehouse where the goods are stored.
Godowns are used to store goods too. The main difference between a warehouse and a godown is how the items are stored.
Compared to a warehouse, the products are stored randomly and are much smaller than the warehouse. Godown doesn’t have an efficient layout and advanced features to add value to the services compared to the warehouse.
The products in the godowns are not that safe. They have no safety parameters and are not categorised properly. But they are a lot cheaper than the warehouse.
Who Uses Godown?
Retailers and small business owners who need to store finished products and raw materials in smaller quantities use godowns.
Function Of Godown
The main function of the godown is to serve as the storage space until the product is ready for sale.
Advantages Of Godowns
As compared to warehouses, godowns are a lot cheaper and more affordable.
But unlike warehouses, they are comparatively less efficient and productive. Moreover, they lack security systems and other amenities essential to run a business successfully.
When To Choose Which Property?
The choice totally depends on you! If you want a more organised version to store the products then go for the warehouse. But, if your requirement is little, and you want to store products in small quantities, go for the godown.
The two may look similar but there are a lot of differences between warehouse and godown.
From space to how things are stored, warehouses and godowns differ greatly. Another major difference between them is cost. Warehouses are much costlier than godowns.
So choose the space wisely!
Key Differences Between Warehouse And Godown
| Warehouse | Godown |
| They have humongous buildings. | They are smaller as compared to the warehouse. |
| Large quantities of the items are stored | Godowns are known to store the items in smaller quantities. |
| There is a labour force to perform every task efficiently. | There are merely one or two persons in the godown to take care of the products. |
| Warehouses cost a lot, so people prefer to rent a warehouse, instead of buying a new one. | Godowns are much smaller and less expensive as compared to the warehouse. |
| The warehouse has everything organised, from layout to all the warehousing functions. | In Godowns, nothing is organised; the products are placed randomly (not according to the specific category) |
| Warehouses have advanced functions like temperature-controlled systems, HVAC systems, etc. | Godowns usually don’t offer such features. |