Warehousing is essential to supply chains. It affects inventory management as well as order delivery, and without an efficient warehousing and storage system, your business will be negatively affected.

Due to the growing world of online shopping, urbanization, and new technologies, warehousing has become increasingly important and of high demand. On-demand warehouses are increasing as warehouse space is decreasing and warehousing solutions have continued to evolve to meet the new demands of the business.

Keep reading to learn how warehousing works and how it can help your business.

What is Warehousing?

To put it simply, warehousing is the practice of storing goods in a warehouse. Warehouses not only store the items but also keep them organized so that you can find them easily. They keep track of how many items they have on hand, when the items arrived, and where the items are.

Traditional retailers will store their inventory in warehouses until they ship them to one of their brick and mortar stores. Ecommerce businesses will store their products in a warehouse until they post the items online. These items are then shipped directly to the customer from the warehouse.

Small businesses may choose to store their own inventory until they need a bigger space. These businesses have the option to rent more storage space, lease warehouse space, or outsource logistics to a third-party and store their inventory in their warehouse.

Fulfillment Warehouse and Supply Chain

Warehousing logistics play an important role in fulfilling orders quickly. Manufacturers ship inventory (usually from overseas) to a warehouse to move inventory through the supply chain.

Different warehouses operate differently. Some will do the entire order fulfilment process and turn their inventory over very quickly while some fulfillment warehouses offer longer-term storage. Some warehouses serve as strictly storage facilities and others operate as fulfillment warehouses which, apart from storing inventory, will pick, pack, and ship orders to customers. This can be done either in-house or by hiring a third-party company to handle the fulfillment logistics.

Warehousing and Ecommerce Operations

You placed an online order. It arrives quickly at your doorstep – maybe even one day after ordering. These record speeds deliveries have warehouse fulfillment and logistics to thank.

Storing Inventory

Storing inventory is not simply storage but also having an organized system that places specific products in specific locations, making it possible to pinpoint the exact location of any item anywhere in the warehouse. Each item has a SKU (Stock Keeping Unit) which keeps track of the inventory. An efficient method of warehousing and storage makes it possible to know how many of each product you have at hand, respond to any damaged, expired, or recalled products and knowing where they are and ship out the oldest products before the recently arrived ones.

Shipping and Receiving

Warehouses receive inventory from shippers and should be ready to efficiently accept any incoming inventory. They should be aware of how many products are arriving and how many of each. After storing the items and prepping them for transportation, carriers (UPS, DHL, USPS, etc.) will pick up orders from the warehouse and ship them to the customer.

Distribution Centers

Big box companies that have online and physical presences will often use distribution centers. When products are needed, distribution center send them directly to consumers, wholesalers, or retail locations. Being demand-driven, distribution centers are best for short-term storage as products are constantly moving in and out.


Returns are part of the game, especially when in-store returns are unavailable. Some warehouse fulfillment companies provide their clients with prepaid return labels, refund information, and return tracking to make it easier. No matter how you decide to operate, every warehouse operation should be ready to receive, assess, and process every returned item.


As you can see, warehousing plays an important role in running an efficient business. Choose the right warehouse solution for your business, and you can save time and money and meet any customer demand. Consider working with a third-party logistics company like ESM to help you out.


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