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What to know about preparing inventory for your warehouse

Aug 22, 2022

22.8.2022

,

10:00

PT

With the many moving parts involved in fulfillment, it’s easy to overlook the inventory preparation that’s necessary to ensure your products are warehouse-ready. This prep is a critical component of the fulfillment process because it impacts the efficiency with which the warehouse can store, pick, pack, and ship orders—and therefore, it heavily impacts your expenses.

Each warehouse will have its own requirements, but there are a few standards that will be shared across the board. Products that arrive at the warehouse must be:

  1. Barcoded
  2. Individually packaged
  3. Ready for handling 

Let’s take a look at how you can ensure your inventory is warehouse-ready so order fulfillment can be executed without a hitch.

Inventory preparation requirements at 3PL warehouses

The most efficient means of preparing your inventory for warehousing is through your manufacturer; but for various reasons, this isn’t always possible. As a stopgap for manufacturer shortcomings, many warehouses will offer to prepare inventory after it’s arrived but before it’s stored as a value-added service or project. 

Nonetheless, before inventory can be properly stored in a warehouse, it has to be barcoded, individually packaged, and ready for handling. Some warehouses will have additional requirements, but these three are standard requirements of any fulfillment center. 

Barcoding inventory

Adding barcodes to your products is a critical step in preparing inventory for warehousing. Barcodes allow the warehouse to keep track of inventory as it moves throughout the fulfillment process. From keeping track of stock levels to ensuring the right SKU is picked and packed for each order, barcodes are a warehouse’s universal source of truth. Simply put, items that are not barcoded cannot be fulfilled.

Barcodes are especially important in tech-enabled warehouses. Since they’re unique to each SKU and are scanned throughout the fulfillment process, they enable the real-time updates that make modern warehouse management software so useful to operations leaders. Barcodes are also a crucial component of a concept known as smart warehousing, in which warehouses use technology—like robotics, the Internet of Things (IoT)—to automate some elements of the fulfillment process. The benefits of smart warehousing include reduced human error, faster fulfillment, better inventory management, and fewer returns. 

It’s worth noting that there are barcode standards that most warehouses will require you to meet. You can read more about those here

Individually packaged products for shipment

Depending on your product and how it’s manufactured, you may need to have products assembled or disassembled before they are warehouse-ready. Before being stored, all products held in a warehouse have to be packaged such that the physical SKU matches the digital SKU. In other words, what arrives at the warehouse must match what is shipped to the customer.

In some cases, this could mean disassembling a shrink-wrapped pack of five items into individual units to be shipped to customers. In others, it could mean taking multiple items that arrived separately and assembling them into a single unit that is ready for pick and pack

You can think of the benefits of individually packaged units in the same way as pre-measuring your baking ingredients before you make a cake. You could collect and measure the sugar, eggs, flour, and salt as you need them; but you’ll be enjoying your cake much sooner if your ingredients are already measured and ready when you pull out the mixing bowl. 

Pick and pack is one of the most expensive elements of fulfillment, so maximizing efficiency here is key to keeping costs low. 

Readily handled inventory 

You know your product best, including what is necessary to keep it in pristine condition. This could be dust bags for apparel or sturdy product packaging for fragile items. Before your product can be stored in a warehouse, it must be ready to be handled by the staff—meaning it should not be in danger of being damaged as it makes its way from receiving dock to storage bin to shipping container. 

When you send inventory to your warehouse, be sure that the products are appropriately packaged. You could feel confident that the items won’t break if dropped or damaged as they’re picked and packed. This will go a long way toward customer satisfaction, too. To further the example made earlier, dust bags that protect clothing and carefully vetted packaging that will protect fragile goods will ensure the product arrives to your customer unscathed. 

How to prepare inventory for receiving

Now that you know what warehouses will require of you before receiving your inventory, you’ll need to decide how you’ll go about your own inventory preparation. You can either work with your manufacturer to meet warehousing requirements, or you can work directly with the warehouse. 

Manufacturer inventory preparation

The most cost-effective and efficient way to prepare your inventory for your warehouse is to work with your manufacturer. It’s straightforward: if your product can be sent to your warehouse ready to go, you’ll save a ton of time and money. It’s the most ideal scenario to have a manufacturer that can deliver not just a quality product, but a quality product that is barcoded, individually packaged, and ready for handling. 

Of course, there are many reasons this might not be possible. Smaller companies that are still perfecting their product or finding the right manufacturer fit will likely need to make last-minute changes. Some manufacturers simply don’t offer all the services necessary to prepare an item for the warehouse, but could offer something else—low prices, fast turnaround, speciality materials—that still make them the best choice for the brand. A brand might use multiple manufacturers to create products that are intended to be sold as a single unit. The list goes on. 

Fortunately, many 3PLs and 4PLs (like Airhouse) offer value-added services that will prepare inventory for storage after it’s been received by the warehouse but before it’s put away. 

Inventory preparation at the warehouse

If for whatever reason your manufacturer cannot prepare your inventory for receiving, you may be able to work with your warehouse to put the finishing touches on your product. 

  • Barcoding: Your warehouse may offer barcoding services if your manufacturer cannot or if the manufacturer barcodes are not compatible with the warehouse’s system or protocols. Be aware you’ll need to leave enough clear space on the individual products to allow for a barcode to be applied. 
  • Individual packages: If you have items that are sold as sets or consist of multiple pieces that arrive at the warehouse individually, you’ll likely need your warehouse to offer kitting or bundling services.
  1. Kitting refers to taking multiple items that are sold as a single SKU and assembling them together before they are stored. An example would be themed decks of cards that come in a collectible box. 
  2. Bundling refers to storing items together that can be sold individually or as a single SKU. For example: a common shampoo and conditioner combo might be sold as a set at a slight discount, although both could also be sold separately. 
  • Readily handled inventory: If your manufacturer cannot provide the packaging you need, you may need to work with the warehouse to finalize assembly and ensure the product is ready to be shipped. This could be applying a branded label that came from a printing press to a bottle of sunscreen that arrives from the manufacturer without any labeling. 

It’s important to keep in mind that while projects at the warehouse are a great stopgap when necessary, they’re often expensive and not an ideal long-term solution. Most brands will avoid projects at the warehouse altogether, if they’re able. If you do need to use a warehouse to complete projects like these, be sure to ask if you’ll be charged by the hour or a single project fee, and for an estimate of how long the project will take, if possible. 

Why is inventory preparation required?

Inventory preparation is required by warehouses for a multitude of reasons, though the biggest is simply to prevent warehouse chaos. Imagine if there were no rules for how inventory arrived at the receiving dock—the warehouse would never be able to monitor stock, effectively pick products, or track orders. 

Aside from general necessity, inventory preparation is a crucial piece of inventory management best practices, which is a vital component of any retail business’ financial health. Preparing inventory also allows the warehouse to be far more efficient, which not only enables your orders to be fulfilled faster, but also will save you a good chunk of change, as pick and pack is one of the most expensive aspects of fulfillment. 

Preparing to outsource? Be sure to ask these five questions before signing with a warehouse.

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