What is Warehousing? Definition, Advantages, and Functions Explained

Warehousing refers to the process of storing goods for safekeeping until they are ready for sale. The more rapidly a business scales, the more critical it is to have an effective warehousing system in place to meet storage and supply chain needs. Modern consumers expect to receive their orders at lightning speed, so it’s essential that any good warehousing strategy combine secure warehouse storage with fast shipping and reliable fulfillment.

If you’re interested in learning more about the advantages, functions, roles, and types of warehousing available today, then you’re in the right place. In this article, we’ll explore everything you need to know about modern-day warehousing and how it impacts your efficiency and revenue growth.

What is the Definition of Warehousing?

Warehousing refers to the storing of goods and products before distribution or sale. Warehouses act as temporary storage facilities, and sometimes as fulfillment centers, distributors, or other service providers in the supply chain, helping create a smooth flow of products from businesses to consumers.

In addition to storage, many modern warehouses also offer value-added services such as order fulfillment and packaging, labeling, and kitting. Overall, warehousing plays a vital role in ensuring that businesses can manage their inventory effectively, minimize costs associated with distribution, and ensure customer satisfaction.

What are the Functions and Processes Of Warehousing?

Warehouses have several functions, such as storing goods and facilitating distribution, transportation, and logistics operations. Some of the processes involved in these warehousing functions are receiving, categorizing, storing, tracking inventory levels, fulfilling orders, and shipping products. Technology such as barcodes and RFID tags are often used to accurately track quantities and locations of each product to ensure speedy, precise delivery.

Warehouses also sometimes provide value-added services like packaging, labeling, customization, and assembly. By consolidating goods from different suppliers into one location for efficient distribution to customers, warehouses play an important role in the supply chain management process. Let’s take a look at the five main processes of warehousing:


Receiving is the process of accepting and verifying incoming shipments of goods from suppliers or vendors. Typically, the receiving process starts with the truck driver providing details about the shipment, such as weight, quantity, and delivery date.


Storage is the practice of keeping goods or products in designated locations within a warehouse. This can include raw materials, finished products, or even excess inventory. A key advantage of storing in a warehouse is being able to maintain proper inventory levels and ensure that products are readily available when needed.

Warehouses provide a safe and secure environment for inventory, protecting items from damage and theft. Effective storage practices typically involve organizing items by type, size, and demand frequency, allowing for greater efficiency in retrieving products when sold.


Picking involves selecting and retrieving goods from storage to fill orders placed by customers. Accurate and efficient order picking is crucial to satisfying customers. Warehouse pickers typically use handheld mobile devices or pick-to-light systems to help guide them through the picking process by providing real-time information on where to find each item, how many items need to be picked for a particular order, and where to place them before they are shipped out.


Packing is the process of preparing products or goods for shipment or storage. This involves using custom shipping boxes, cartons, and containers to securely package products, ensuring that they remain undamaged during storage and transportation.

Packing may also involve labeling items with relevant information, such as barcodes and instructions on how to handle the product. Effective packing requires careful planning and execution to minimize the risk of product damage, maximize space utilization, and ensure timely delivery to customers.


Finally, shipping involves preparing and transporting products from the warehouse to their final destination. This involves a series of activities ranging from reviewing orders to picking goods from storage to packing them securely for transit and coordinating with carriers for timely delivery. Successful shipping operations ensure accuracy in both product selection and shipment details while also minimizing costs.

What are the Essential Tools in Warehousing?

To run efficient warehousing operations, there are certain necessary supplies, items, pieces of equipment, and types of technology required. Some of these are:

  • Storage shelves or racks to keep the inventory organized and easily accessible.
  • Forklifts or hand pallet jacks for moving heavy loads around in the warehouse.
  • Barcode scanners and RFID tags to help track inventory levels and facilitate faster stock-counting processes.
  • Warehouse Management System (WMS) for managing inventory levels, tracking orders, and managing shipping schedules.
  • A backup generator in case of power outages, which can significantly impact operations.

Warehousing vs. Distribution Fulfillment Centers: What’s the Difference?

The main difference between warehousing and distribution fulfillment centers is the level of services provided. Warehousing simply refers to storing goods in a secure location, which can sometimes include receiving and processing inventory, picking and packing orders, and transporting purchases to stores or customers.

On the other hand, distribution fulfillment centers provide additional services such as order tracking and management and handling returns, in addition to packing and labeling products for shipment, and even more. In general, warehouses focus solely on storage, while distribution fulfillment centers take on a wider range of responsibilities to ensure products are delivered accurately and on time.

Why is Warehousing Important?

Warehousing is vital to the smooth operations of not only businesses but also the economy at large, for several reasons.

Firstly, it provides a secure location for the storage of goods and inventory. This means that businesses may purchase items in bulk, store them in a warehouse facility, and keep sufficient inventory levels to meet demand. Additionally, warehouses can ensure that products are shipped out in good condition as they provide protection from theft, damage, and harsh weather conditions.

Secondly, warehousing allows efficient order fulfillment as products can be picked up quickly when needed. This helps prevent delays in customer deliveries or shortages of supplies for manufacturers that could lead to production downtime.

Lastly, warehousing offers businesses opportunities for strategic expansion as companies can choose to locate their facilities closer to key suppliers and markets. By doing so, they can reduce transportation costs while increasing logistical efficiency, leading to an improved bottom line.

How Does Warehousing Fit into eCommerce Operations?

Warehousing plays a critical role in eCommerce operations as it involves the storage of goods from various suppliers that will eventually be sold to customers online. A warehouse serves as the hub for inventory management, order processing, and shipment coordination. eCommerce businesses must ensure that their warehouses operate efficiently to reduce costs, increase productivity, and deliver customer satisfaction consistently. This involves proper product categorization and a smart layout for optimal storage capacity utilization.

Warehouses also require competent staff who can manage and organize inventory effectively while maintaining high levels of accuracy through barcode scanning or radio frequency identification (RFID) technologies. Ultimately, eCommerce businesses must integrate their warehousing with other parts of their supply chain, such as transportation and order fulfillment, to create a seamless process that delivers products promptly to customers while maximizing profitability.

Take the Next Step to Find the Perfect Warehousing Solution for You

Are you looking for all-star warehousing for your business? Look no further! Warehousing and Fulfillment can help you find the best warehousing and fulfillment service to boost your business efficiency and profitability. Get in touch with us today to learn more!

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