Imagine hundreds of businesses shipping thousands of products to a single warehouse every month. Each product must be accounted for, placed in the correct bin, and tracked in real-time to ensure nothing slips through the cracks.
Otherwise, disorder quickly takes over: mispicks skyrocket, delays slow down fulfillment, and customer satisfaction plummets. However, with an effective inventory bin system, you maintain control over every single SKU, reduce mistakes, and streamline fulfillment from inbound receiving to outbound shipping.
In this article, you will learn what an inventory bin system is, how various bin system models (like two-bin or multi-bin) operate, and how ShipBob’s tools and services can help you take your warehousing processes to the next level
What is an inventory bin system?
An inventory bin system is a method of organizing products into designated containers or “bins” to simplify stock tracking and storage. Instead of placing all items on shelves randomly, you break down your stock into smaller, easily identifiable groups and assign each group to a specific bin (or set of storage bins). This arrangement provides a structured “address” for every product in the warehouse, so team members can quickly find and pick items.
4 types of inventory bin systems
There isn’t a single, one-size-fits-all approach to bin systems. Depending on your business’s size, the variety of products you sell, and your target order volume, you can choose from different bin system models.
1. Single-bin system
A single-bin system stores each SKU in one bin or container. It’s simple but can be limiting for high-volume or fast-moving SKUs. This approach works best for smaller product lines or specialized items that are unlikely to get mixed up.
2. Two-bin system
A two-bin system splits stock of the same SKU into two bins. The first bin is used until it runs low, triggering replenishment, while the second bin acts as backup. This model helps prevent stockouts and makes it easier to track reorder points.
3. Multi-bin system
A multi-bin system uses three or more bins for a single SKU, each assigned a reorder trigger. Ideal for high-volume operations, this system ensures continuous stock availability and prevents running out between replenishments.
4. Hybrid systems
Some ecommerce businesses blend bin system types based on their SKUs. Fast sellers may get a multi-bin system, while slower sellers remain in a two-bin or even single-bin system. Hybrid models give businesses the flexibility to optimize based on product performance.
Why ecommerce businesses use inventory bin systems
Inventory bin systems help ecommerce brands streamline operations, especially during daily tasks like warehouse order picking and product restocking. A well-managed bin system will:
- Reduce picking errors by assigning each SKU its own labeled “address.”
- Improve stock visibility through clear bin locations.
- Speed up fulfillment (especially with zone picking) by minimizing search time.
- Enhance warehouse flow by cutting down on employee travel between pick locations.
When done right, a bin system unifies inbound, storage, and outbound workflows for smoother overall fulfillment.
Benefits of using a bin system in inventory management
Implementing an inventory bin system offers both tangible and intangible benefits. From accuracy in picking to streamlined oversight, a solid bin approach can transform your day-to-day warehouse operations.
Improved accuracy and reduced operational errors
A clear labeling system for SKUs and bin locations helps pickers find products quickly, reducing mis-picks, returns, and wasted labor. Pairing bin locations with lot tracking also improves compliance by enabling expiration tracking and pinpointing quality issues, which is crucial for perishable or regulated goods.
Enhanced inventory visibility and forecasting
Assigning each SKU its own bin improves visibility, making demand forecasting easier. Monitoring bin-level data helps refine purchasing decisions and keep beginning inventory optimized. This setup also ensures timely reorders, preventing stockouts and overstocks, especially during peak seasons.
Increased warehouse efficiency and space optimization
By grouping SKUs by velocity, size, or other factors, and then placing them in strategic bins, you get more out of your warehouse space. Many businesses pair a bin system with a warehouse rack setup to make use of vertical space and create distinct “zones.” This keeps everything organized and helps your team pick orders faster.
How to implement an inventory bin system
To set up an inventory bin system effectively, it’s best to follow a phased approach. Consider your product range, storage capacity, picking strategies, and more. Once you’re organized, you’ll be well on your way to a faster, more accurate fulfillment operation.
Organizing bin locations and labeling strategies
A solid warehouse setup plan is key to an effective bin system. Start by grouping products logically (e.g., by category, size, or sales frequency), then split your warehouse into zones. Assign each SKU (or group of SKUs) to specific bin locations within those zones.
Clear labeling is also essential. Use large, easy-to-read labels that match your internal naming conventions. Many businesses use a combination of letters and numbers (e.g., “A2-B5”) to designate aisles, racks, and bins. Adding barcode scanning or RFID tags further simplifies bin management by instantly showing employees the right location for each item.
Training staff for bin system efficiency
Even the best-labeled bin system won’t be effective if your team isn’t trained to use it consistently. Make sure employees understand:
- How to read bin labels: Walk them through the labeling conventions and show them examples.
- Where to store and retrieve products: Emphasize the importance of always returning items to their proper bins.
- How to handle replenishments: Outline steps for refilling bins, especially if you’re implementing a two-bin approach that triggers replenishment when one bin empties.
Leveraging warehouse management systems for bin management
Once your bin system is in place, integrate bin data into your warehouse management tools to maintain a single source of truth for stock information. Real-time alerts notify your team when bins run low, preventing stockouts and ensuring timely replenishments.
A robust WMS also updates stock counts automatically whenever a sale or return occurs, keeping inventory levels accurate around the clock. Forward-thinking brands often choose advanced solutions, like ShipBob WMS, which provide deeper reporting insights and streamlined inventory controls. By integrating inventory management software with your bin system, you can automate stock tracking, reduce errors, and optimize picking processes.
Overcoming challenges in bin system implementation
While a bin system can seem straightforward, there are still potential pitfalls. Let’s go over a few common challenges that come with a bin system implementation.
Dealing with high SKU volumes
Handling a large SKU catalog can be challenging, so effective SKU management is key. Group SKUs logically (e.g., fast movers or seasonal items) and assign bins accordingly. A well-designed bin system also prevents clutter by allocating enough space for the highest-volume SKUs while grouping smaller, slower-moving SKUs together.
Ensuring scalability as your business grows
As you expand, you may need more bins, reorganized locations, or new labeling methods. Regular inventory reevaluation reveals which SKUs are trending up or down, guiding how you adapt bin allocations. To keep pace, you may also need to upgrade to a larger warehouse or distribute your inventory across multiple fulfillment centers to reach more customers quickly.
How ShipBob can help optimize your inventory management systems
If you’re looking to simplify your operations and gain total control over your stock, ShipBob is here to support you. Our integrated technology and global fulfillment network provide the agility, transparency, and scale you need to deliver on customer expectations.
Automate your inventory tracking with ShipBob’s advanced WMS
ShipBob’s proprietary WMS simplifies bin-level management and updates stock levels in real-time. Whether you have a two-bin approach or a more sophisticated multi-bin setup, ShipBob’s technology takes the guesswork out of everyday inventory management tasks. This automation slashes manual data entry and reduces the risk of human error.
Customizable warehouse configurations
Every business has unique needs, which is why ShipBob offers customizable solutions for bin layouts, storage spaces, and everything in between. We help determine the most effective arrangement of bins, shelves, and warehouse rack systems to ensure the best possible product flow. With ShipBob, you get the flexibility to scale up or down based on changing demand.
Optimize stock placement with ShipBob’s Inventory Placement Program
Proper inventory bin placement is critical for quick fulfillment and minimal shipping costs. But doing this across multiple fulfillment centers isn’t easy without the right strategy. ShipBob’s Inventory Placement Program takes the guesswork out of stock distribution by analyzing historical sales data and strategically placing inventory in the most optimal US fulfillment centers. This ensures products are stored closer to your customers, reducing shipping costs and speeding up delivery times.
Enhance fulfillment speed with bin-level tracking and forecasting
ShipBob’s real-time tracking and inventory forecasting tools allow businesses to track inventory at the bin level. By monitoring product velocity, you’ll know when to reorder, how much to reorder, and which bin or facility needs replenishment. This ensures that your fulfillment speed remains high, even during peak sales periods.
Get started with ShipBob
Interested in leveraging ShipBob’s platform for your ecommerce business? Connect with the ShipBob team to get started.
Inventory bin system FAQs
Can small businesses benefit from inventory bin systems?
Even small brands benefit from more organized storage and faster picking. Simple setups like two-bin or single-bin systems can keep items sorted, reduce mis-picks, and help businesses scale more efficiently.
How does ShipBob support bin systems?
ShipBob seamlessly integrates bin strategies through our advanced WMS, giving you real-time stock visibility at every location. Our fulfillment centers already have well-defined bin systems, labeling protocols, and trained staff, minimizing errors and speeding up order fulfillment.
How does a two-bin inventory control system work?
A two-bin inventory system splits a single SKU into two bins. One bin is used until it hits a reorder threshold, then gets refilled. The second bin acts as backup stock to prevent running out before replenishment arrives.
What is a single-bin inventory system?
With a single-bin inventory system, all units of a SKU go into one container or location. It’s simple but requires close monitoring to avoid stockouts. Single-bin setups typically suit low-velocity SKUs or merchants with fewer product varieties.
