Warehouse Bin Storage System Best Practices

Warehouse locations and bin labeling are the most underrated principles in warehouse management best practices. An optimized bin storage system can make a world of difference for your business. When you name locations correctly, you can take advantage of tools and strategies used in warehouse management systems like dynamic locations and interactive batch picking. These features allow you to get the most out of your warehouse space and employees. After all, having an optimized system means your pickers spend less time finding products and make fewer mistakes which is good for your bottom line. So if you’re looking to improve your warehouse management, take notice of the power of a well-designed bin storage system.

Why Bin Storage Systems are Important

A bin storage system can help you keep track of your belongings, even the smallest. You can track your goods by assigning locations to each bin. This can save valuable time when processing orders, as you will no longer need to search for items. Bin storage systems can reduce your overall storage costs. You can make better use of your available space by keeping things organized.

Know Where to Store and Find Products

In the world of retail, time is money. That’s why an efficient bin location system is essential for any retailer who wants to save time and money. A bin location system identifies where to stock a product, preventing misplaced or lost items. As a result, your staff can save much time during warehouse operations, such as receiving products from suppliers, transferring products between warehouses, and returning products to stock after a refund. All of this reduces handling costs and keeps your inventory data correct. Accurate stock information leads to fewer rejected orders and a better customer experience.

Maximize Warehouse Space

One of the best ways to maximize warehouse space is by investing in a bin storage system. With this type of system, you can store various items in different-sized bins, which helps to save space and makes it easy to find what you need. Additionally, a bin storage system can be easily customized to fit your specific needs, and the long-term results it provides will undoubtedly benefit the success of your business. Investing in tools such as ShipHero WMS will help you identify the correct storage method for your facility while making it easy for you to analyze your storage space utilization.

How to Name Your Locations (and Why it Matters)


A section or area within a warehouse that’s separated from one another based on attributes such as package types, sales velocity, or warehouse activities.


Parallel rows of products. The space between these rows will depend on many factors like the type of products you sell, their sizes, or the equipment needed to pick these items.

Rack or Bay

A row of shelves stacked on top of each other where you store your products.

Shelf or Level

A shelf or level is the “layers” of your racking system. Having multiple shelves on an inventory rack increases the number of products you can store in your warehouse.


A bin is the smallest unit of space where your items are stored.

Location, location, location! Location is everything, so a sound warehouse numbering system is essential. By clearly labeling all warehouse levels – from the largest to the smallest – you can ensure that your staff can always find the correct items. 

For example, if you have a five-level bin storage system, your bin location will be Zone-Aisle-Rack-Shelf-Bin. So if an item is at Location 1-B-03-04-05, that means it’s in Zone 1, Aisle B, Rack 03, Shelf 04, and Bin 05. This unique system ensures that everyone can easily find what they’re looking for – and that the correct items are always picked.

Bin Storage Systems: Fixed, Random, or Holding?

  • Fixed Bins: These are perfect for products that are always stored in the same place. The bin remains empty even when your stock runs out. A single product can occupy multiple bin locations in the warehouse. This is often called a “pick face.”
  • Random Bins: After that random location’s stock empties, this bin becomes available for other product delivery. It also facilitates the automatic take of stock.
  • Holding Bins: Stock that hasn’t been released for sale is placed in holding bins.
  • Overstock Bins: When pickers are fetching SKUs, they will be directed to the primary bin location. If this location is depleted, the picker will reference the overstock location(s) to locate the remaining SKUs.

Storage Bin Slotting: Static or Dynamic

Slotting is the process of organizing bin storage capacity to maximize efficiency. In other words, it’s all about figuring out the best way to arrange your stuff so you can find what you need when you need it. The goal is to make your fulfillment operation as efficient as possible. There are two broad categories of slotting, known as Static Slotting and Dynamic Slotting. Ultimately, the best slotting strategy for your warehouse will depend on the unique needs of your business.

Static Slotting

The ideal choice for warehouses with fixed product bin locations, this system can be used by businesses that focus on fewer SKUs and high turnover. No inventory is tracked in the bins themselves; instead each location has an associated reference so when replenishing or picking orders all you need to do is look up your desired item from our database!

Dynamic Slotting

With dynamic slotting, you can keep track of your inventory in real time and add new bins as needed. This is useful for businesses that have a variable product turnover rate or need to accommodate an unknown SKU count with each bin location designated non-pickable so they know what needs to be separated before wasting too much precious shelf space!

We recommend businesses start with static slotting, especially when starting with a fulfillment operation. It is the most straightforward approach to organizing product locations.

Best Practices for Warehouse Location Labeling

  1. The shelves should be numbered from the bottom up. Thus, if you change the height of your shelves as you grow, you won’t have to re-label them.
  2. When setting up alphanumeric locations, it is best practice to use a zero in all numbers less than ten (i.e., 01, 02, 03, etc.). This will allow the system to read the locations alphanumerically and accurately.
  3. Be consistent. Nothing will screw up your system and your employees faster than having an inconsistent labeling method.

Location Labeling

No two warehouses are created equal, especially when it comes to shelf bin organizers. While one warehouse may sell large bulky lawnmowers, another may primarily stock small computer parts. As a result, the way these warehouses label their locations can vary quite a bit. In a warehouse full of bulky items, it may not be necessary to get too specific when naming locations. However, in a warehouse with hundreds of small items, it’s essential to be as detailed as possible to avoid the headache of sorting through a bunch of stuff you don’t need.

Rack Labeling

There are two main types of rack labeling: serpentine and standard. Most experts favor the serpentine system because it is more organized and efficient. With a picklist in order by location, pickers can weave up and down the aisle and collect products for several orders without having to double back or skip around. This means less time spent walking and more time spent picking!

Shelf Labeling

It’s no secret that keeping a tidy shelf can be difficult. Even the most organized person can struggle to keep shelf labels in check. But with some planning and forethought, shelf labeling doesn’t have to be a hassle. By understanding the industry-preferred method of shelf labeling, you can make the process a breeze. Most locations are divided by aisle, unit, rack, shelf, row, and bin. Shelves within a unit should be numbered sequentially from one to the end of the shelf. By following this simple method, you can ensure that your shelves are always labeled correctly and that your employees can easily find what they’re looking for.

Why You Should Use a WMS for Bin Storage Systems

Bin storage systems are often underrated, but they are one of the most critical principles in warehouse management. Bin storage systems help you know exactly where to store and find products, and they can also help you maximize your warehouse space. Bin storage can be classified into three types: fixed, random, and holding. 

When you’re ready to name your locations, you should first decide the type of system you’ll use. Then, you can follow some best practices for labeling your warehouse locations. Finally, you should consider using a centralized warehouse management system to maximize the benefits of bin storage systems. ShipHero is a great option that can save costs and effort from purchasing, maintaining, training, and reconciling multiple systems.

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