The warehouse refers to the physical buildings where the stock is stored. You can locate rooms within a building with the logical space called locations. The requirement for a small shop is to have a stock location which is a single location called stock while a big warehouse is required to identify multiple locations such as cold storage and dry locations. A big warehouse wants to drill down the identification of a location by the rooms, cupboards, or racks organized in rows and columns.
Imagine you have a million products stored in a warehouse at thousands of locations. How difficult it would be to organize the warehouse, when you have thousands of locations and each location has to be identified uniquely in the system. It is not about locating the products in the warehouse but assume that you have a variety of products coming in every day and you have to find the correct location to store them, so that they can be retrieved easily when they are needed...