The warehouse is a way for you and fellow town citizens to collect materials to sell to the trader.
If you are the first person to start filling a crate in the warehouse, you can pick any item to fill it with. You and your town mates must fill the crate to the capacity indicated on the crate before you can start stocking up on another item.
When the Trader comes to visit your town each day, you will be compensated in Chits for your contribution to the town warehouse. The amount you receive varies depending on which items you contribute and the quantity provided, so choose wisely! Each crate filled earns your town 1 Gold.
Every week, the amount of chits earned by your town's warehouse is counted and compared to other towns in your “county” (a random group of towns you compete against). Winning first place will grant you extra prizes like gold or special town furniture that benefits everyone.
Click here to read more information on Towns.