Warehousing refers to holding or keeping of goods from the time of their production or purchase until they are sold or consumed. It removes time gap between production and consumption and thereby creates time utility. In addition to providing services of storage, warehouse also provides logistical service in a cost effective manner. Functions of Warehouses 

1. Consolidation: There are certain goods which are produced in small quantities but are sold to consumers in bulk quantity. Such goods need consolidation. Warehouses receive goods in small quantities from different producers and dispatch them to consumers in bulk. 

2. Break the Bulk: This function is just opposite of consolidation. Under it, the warehouse receives the quantity in bulk from the producers and sells them in small quantities to consumer. These small quantities are then sold to customers according to their requirements. 

3. Stock Piling: Usually there is a time gap between production and consumption of goods. Warehouse fills this gap. It stores those goods which are in surplus i.e., whose supply is more than their demand. When demand exceeds supply, it makes goods available from its own stock.

4. Value Added Services: Warehouses also provide some value added services like transit mixing, packaging and labeling. 

5. Price Stabilization: Warehouses help to equalize demand and supply and thereby stabilize the prices. 6. Financing: Warehouse owners advance money to owners of goods on the security of these goods and they also provide these goods on credit to customers.