A guide to warehouse inventory management in 2024

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For new eCommerce businesses, managing inventory is fairly straightforward if you’re starting small. But, as your business grows, and you begin to introduce further SKUs, shopping channels, and potentially expand into new markets, your inventory becomes increasingly difficult to manage.

Naturally, the next step is to send your goods to a warehouse for safekeeping. But, as your business continues to grow, so will your warehouse costs, so it’s important to have a good understanding of the different costs associated with warehouse management, so you can make your operations more efficient.

This is where warehouse inventory management comes into play. There are a number of ways to ensure that you’re being cost-effective with your warehouse space, while also improving efficiency in the warehouse at all stages, whether that’s picking, packing, shipping, or processing returns.

Today, we take a look at how warehouse inventory management can improve the productivity and efficiency of your warehouse, and the role a Warehouse Management System (WMS) plays in this process.

What is warehouse inventory management?

Warehouse inventory management is a type of inventory management that’s focused solely on the warehousing aspect of your operations. It’s essentially being aware of all the products you have entering and leaving your warehouse, the location and size of the space they occupy, and how efficiently your goods are processed while they are in the warehouse.

It doesn’t matter how big or small your business is; the warehouse management phase of your supply chain can have an enormous impact on the profitability of your business. Basic warehouse inventory management includes making sure that your stock is being replenished, your goods are getting out to customers in a timely manner, and ensuring that no goods go unaccounted for.

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However, those businesses that sell large quantities of goods or that are serious about growth use technology to truly optimise the efficiency of their warehouse. Through insights provided by a Warehouse Management System (WMS), companies can make smart decisions on storage space, the fulfilment process, courier choices, and much more. Good warehouse technology will also provide businesses with real-time updates on the progress of their orders, which can then be relayed back to the customer.

How warehouse inventory management helps improve productivity and efficiency

Pick and pack accuracy 

Disorganisation is the biggest enemy of successful warehouse management. Without a good picking and packing process in place to actively manage where stock is located, and failing to have a proper system in place to organise inventories, the chances of incorrect items being picked and packed is high.

Pick and pack inaccuracy has a knock on effect that impacts every part of the fulfilment process. Resources will need to be used to rectify mistakes, customers will be unhappy when they receive an incorrect order, and business reputations will suffer as a result.

Warehouse operations that are on top of their warehouse inventory management will use smart processes backed by technology to ensure that orders get picked accurately and packed correctly.

At James and James, our finely tuned warehouse management system means that we’re able to pick and pack orders at 99.9% accuracy.

Inventory security

With so many goods entering and leaving warehouses each day, failing to manage inventory properly could result in stock going missing. Similarly, inventories can be damaged if not handled correctly.

An efficient warehouse will have designated areas for each part of the fulfilment process, with technology to accurately track where in the fulfilment process a particular item is. This raises accountability for those working in a designated area, improving the protective atmosphere of an operation.

At James and James, our goods in process ensures that all products are accounted for, and all product locations and quantities are tracked and updated in real-time via our software. We also have a designated high-value cage for expensive goods, as well as 24h warehouse security.

Quicker fulfilment process

When a warehouse is a tight ship, orders can be fulfilled more quickly. There are several stages to the order fulfilment process; goods in, storage, picking, packing, shipping, and returns. Each stage is made up of several mini-stages, and it’s important for each macro and micro stage to be optimised for efficiency.

Without good inventory management, mix-ups, confusion, and mistakes can occur both within and between these stages. This, clearly, will result in delays for orders being fulfilled, and bottleneck the speed of which fulfilment can be achieved.

Each Stage of the James and James fulfilment process is powered by technology, with each stage being carefully designed for efficiency. As a result, we’re able to ship 98% of orders same-day: an industry leading speed.

Insights to help save money

A side effect of good warehouse inventory management is the large quantities of data that will inevitably be collected. This data can, amongst other things, be used to help you save money.

We can take the data provided to us to make better use of our storage space, fulfil orders more quickly, prioritise fast moving stock, cut back on slow moving stock, identify best before dates before it’s too late, and much more.

Over time, as more data is collected and inventory managers act upon the insights the data provides, businesses can reduce their bottom line and increase profit margins substantially.

James and James’ warehouse management system crawls data in real time to generate reports, breaking them down into handy, digestible insights that are designed to help businesses get the most value out of their warehousing. 

Happy customers

Proper warehouse inventory management rubs off on your customers. When they receive the right order on time, it increases the chances of them shopping with you again. Furthermore, if you’ve optimised your warehouse to properly handle returns, customers will feel more comfortable buying from you as it poses less risk to them.

Messy warehouse management can seriously damage the reputation of your brand, and, in turn, negatively impact customer loyalty and retention.

Implementing a warehouse inventory management system for your business

Layout optimisation 

Warehouse layout optimisation is all about getting the most out of your warehouse space. It involves maximising the space available combined with streamlining and simplifying the layout to ensure that orders can be fulfilled efficiently.

The goal is to ensure a seamless inventory movement as it passes through each stage of warehouse operations, which in turn increases the speed and accuracy of the fulfilment process.

While the purpose of this article isn’t to offer an in-depth analysis of warehouse layout optimisation, we can offer some of the principles that operation professionals employ when optimising warehouse design:

  • Warehouse performance analysis – Where do the current inefficiencies lie, and what improvements need to be made? For good warehouse management, this step should be taken at the earliest possible stage to ensure resources are being spent in the most suitable way.
  • Product types – The types of products you store in the warehouse will have a big impact on how the warehouse is designed. That includes space, verticality, temperature, and more. Small, lightweight products have different requirements to heavy, breakable items, and food might need to be stored in a different way to beauty products.
  • Defined areas – The warehouse floor should be segmented into defined areas that focus on each stage of the fulfilment process. Designated areas should be given for goods in, picking, packing, returns processing, shipping, quality control, and so on. Without segmented spaces, mix-ups and confusion will occur and efficiency suffers. Consideration should be given to the proximity of each area from another.
  • Future planning – Good warehouse management involves a great deal of forward planning. It makes little sense to invest large amounts of time and money into warehouse layout optimisation only to find that further investment is needed a short time later. Ensure that there is enough capacity to meet feature growth, and if you are planning to implement upgrades in the future – such as automation – work this into the current design.

This is just a snapshot of the kind of thinking that goes into layout optimisation. It’s always best to seek professional advice when looking to further improve warehouse operations.

At James and James, each of our warehouses have been carefully designed to ensure that space is utilised to its fullest potential. As we specialise in fast-moving, lightweight products, we’re able to offer a truly optimised warehouse solution for this product type. Feel free to come and see it for yourself!

Tracking and recording

To have a proper understanding of the status of goods in your warehouse, inventories need to be recorded and tracked as soon as they enter the warehouse. This should include photographing items, measuring weights and dimensions, checking items for damage, and uploading all of the collected data onto a WMS.

A good inventory tracking system will allow you to see which items you have in stock, how many of each item, and where they are at each stage of the fulfilment process. Tracking inventory ensures that items don’t go missing, that weights and dimensions are probably labelled for picking, packing, and shipping purposes, and gives you a better understanding of what sells, and what doesn’t.

At James and James, our warehouse employees record and track every product that comes into our warehouse, and provide you with real-time updates on product locations, stock levels, inventory health, and more. 

Demand forecasting

Knowing the times of year your products sell best is key to good warehouse management. On a basic level, a company that sells Christmas decorations is, of course, going to want to make sure that they have a high amount of inventory in their warehouse during the Christmas build-up, but can afford to cut back on storage costs during the summer months as demand will be low.

Likewise, a business that sells sun cream isn’t likely to have a ton of sales come through in the winter. Not every eCommerce business is this black and white, of course, but you get the message.

Understanding seasonal trends and buying habits feeds directly into your warehouse inventory management. Making sure you have the stock in place to meet demand, while cutting back SKUs that will inevitably be less popular, can help you to cut costs significantly.

At James and James, our fulfilment experts will work with you to get the most out of your warehouse space, offering advice and guidance on how best to prioritise and store inventory. 


The pick and pack stage of the fulfilment process is one of the most important areas to get right, as it probably has the biggest impact on customer satisfaction. First and foremost, items need to be stored correctly. If they aren’t, the likelihood of items getting damaged or lost increases.

Assuming that items are stored correctly, an optimised picking process should mean pickers follow the shortest route available between picks. More often than not, orders are made up of several different items, so having an awareness of where each item is located in the warehouse is key.

If a picker is going back and forth across the whole warehouse to pick items, then there’s something wrong. One way to alleviate this issue is to place products that often sell together in close proximity to each other in the warehouse.

Furthermore, technology can play a big role in optimising the picking process. Earlier we discussed the importance of recording and tracking. You can use tracking information taken earlier in the process to feed into the optimisation of your picking operation. Similarly, having photographic records of products on a database can ensure that the right items are being picked.

At James and James, we use our custom-built software to guide pickers through the aisles. The software automatically provides pickers with the most time-efficient route. 


Shipping is the final step in the warehousing process, but another important part to optimise. Shipping orders costs a lot of money, and with shipping costs continuing to increase due to fuel price increases, it’s essential to cut costs where possible.

There are two main things to consider when optimising shipping: the cost of delivery, and the speed of delivery. Both of these can be improved by ensuring that your goods are placed in a suitably located warehouse. If you’re primarily selling goods in the EU, it makes little sense to keep them in a US warehouse.

Likewise, some products might sell better in the UK, but others in the US. In this instance, it makes sense to split your inventory so that products reach their required destination faster, and cheaper. Having multiple warehouses at your disposal is essential to achieve this.

Here at James and James, we’ve helped thousands of clients reduce shipping costs through our international network of fulfilment centres

Returns management 

Offering returns is a good way to convince customers to buy from you, but without proper returns management, it could end up costing you a lot of money while losing customers along the way.

The best way to manage returns is to actually prevent them from occurring in the first place. Improving your overall warehouse management system can support this goal, as if orders are accurate and undamaged when leaving the warehouse, it reduces the chances of returns happening.

Another way to prevent returns is having product information clearly visible on your website. Comprehensive product descriptions and high resolution images go a long way in ensuring customers know exactly what they’re getting.

Sometimes, though, customers will simply change their minds and in these cases returns are inevitable. By having a detailed returns policy on your website, you’ll first be able to check if returns are valid.

An important part of returns management is making sure that you only allow returns that are within your policy. Otherwise, you may find that customers try to return items they’ve worn on a night out, or broken by mistake.

A valid return needs to be processed as quickly as possible so a refund can be issued and you can get the product back on the shelf. If you have a clear criteria for when returns should and shouldn’t happen, an item can be back on the shelf in very little time.

Tying it together with warehouse inventory management software

Gone are the days of pen and paper – a modern warehouse needs to be supported by sophisticated technology. Outstanding warehouse management simply wouldn’t be possible without warehouse inventory management software, and at James and James, we’ve designed our own.

ControlPort is an award-winning cloud-based fulfilment software which has inventory management, warehouse management, and courier management built in. Not only does it help us operate our warehouses with industry-leading efficiency, it also provides our clients with an incredible amount of data for them to make informed decisions about their inventories.

Furthermore, ControlPort allows our client’s customers to see the status of their order in real time, right down to the moment it gets picked, packed, labelled, and dispatched.

We’re proud to say that our warehouse management system provides invaluable benefits to our warehouse team, our clients, and our client’s customers. You can book a demo of ControlPort here. Why not see it in action for yourself?

Warehouse inventory management FAQs

How do I know what products to stock in my warehouse?

Ensuring that you store both the right products and suitable product quantities is key for good warehouse inventory management. Take some time to understand trends and seasonal patterns, and take note of how quickly each SKU is moving.

Finally, consider the location of your warehouse and assess whether it’s ideally placed to serve your most popular markets.

How do you manage a warehouse effectively?

Proper warehouse management requires both great people and sophisticated technology. Staff should be well trained – with regular reviews – and any tech you use should have a dedicated support team.

Ultimately, an effective warehouse needs to be highly organised. To achieve this, its layout should be carefully planned, it should be kept clean and tidy at all times, inventories should be managed effectively, and health and safety measures should be adhered to.

Are there any common challenges or problems associated with warehouse inventory management?

An efficient warehouse is a complex machine. All pain points are solvable, but some common challenges include:

  • Storing too much or too little inventory
  • Insufficient storage
  • Poor tracking and recording
  • Inefficient resource distribution
  • Lack of training / human error
  • Damaged / misplaced products
  • Slow picking and packing team

There are, of course, many more day-to-day challenges that a warehouse faces. That’s why it’s important to have a good WMS to help plan against, manage, and mitigate common issues, while supporting warehouse processes.

About James and James Fulfilment

Since 2010, James and James have been offering fulfilment solutions to eCommerce businesses looking to grow. We help our clients ship internationally through our network of fulfilment centres, and more are coming in the next few years.

We combine fantastic warehouse management with award-winning technology to offer a fulfilment solution like no other. With 99.9% accuracy and same-day dispatch on 98% of orders, get in touch with James and James Fulfilment today and find out how we can help your eCommerce business Scale Up.

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