February 21, 2013 by Andrew Minalto - 30 Comments

Complete Warehousing Guide for eBay Sellers!

One of the first things you face when starting an eBay business is where and how to store the goods you plan to sell. Most people don’t have access to a warehouse, so they have to set up their own goods storage system. In this blog post I’ll try to cover the warehouse set up options available to small-time online traders.

If you don’t want to store and dispatch goods on your own, you can always take a look at fulfilment houses and the services they offer.

But in most cases, when you are just starting out and want to save every penny, having a storage system in-house is the best way to go.

The best, most suitable set up will depend on what type of goods you’re selling.

For small items (like jewellery, craft supplies and similar), these would be the most suitable options:

1) Linbins – one of the most popular and oldest ways to store small items. Linbins are affordable, come in a variety of sizes and can be stacked on top of each other or attached to special wall panels to create gigantic storage units. The downside of Linbins is that they don’t close so expect dust to get onto products in the long run. You can protect your products from getting dirty by placing them in plastic bags first.

Linbins from Plastor.co.uk

2) Storage bins with cabinets – these will be more expensive, but they close fully so no dust problem here. These storage bins are very durable but the downside is the cost – they’re really quite expensive.

Storage Bins from from Plastor.co.uk

3) Tilt bins – perfect for storing loose items, such as craft supplies (beads), screws, bolts and similar items. They’re fully closed and can be attached to any wall to create large storage blocks. Picking items from these units is very easy due to their vertical tilting system.

Tilt Bins from Plastor.co.uk

4) Shelf trays – plastic boxes with an open top, suitable for use with a shelving system. They are very durable (basically a lifetime warranty) and easy to operate. The downside is that you need a shelving unit to use these, plus they do not close fully, creating a dust problem.

Shelf Trays from Plastor.co.uk

5) Small parts drawer systems – These are perfect for very small items. They close fully and come in a variety of sizes. Most of these units are inter-connectable which means you can build one larger warehouse block made up of several smaller units. There are also special stands available.

Small Parts Cabinet from Plastor.co.uk

6) Cardboard bins – these are a perfect, cheap alternative to plastic bins/shelf trays. They are very affordable, and come in dozens of different sizes. Again, for these bins you’ll need to purchase a separate shelving system. As they are made from cardboard they won’t be as durable as plastic ones. But if the items you sell are quite light (not bolts), this could be the perfect storage system.

K-Bins from esedirect.co.uk

There are many other types of storage systems and boxes out there but ones listed here would be most popular ones and suitable for eBay/ECommerce shop owners.

You can even find boxes and plastic bins in your local DIY shop or garden centre, but please note that their prices will be much higher as they’re mostly targeting home users, not businesses.

Here are some of the most popular online shops in the UK:

http://www.plastor.co.uk/

http://www.esedirect.co.uk/

http://www.storagebins.co.uk/

http://www.kbins.com

http://solentplastics.co.uk/

With small items you really need to get some sort of storage system in place, especially if you have 100+ different items. Otherwise, you’ll end up spending hours each day just to pick and pack orders!

All of these systems cost money, of course. But you really shouldn’t look at this as an expense – it’s an investment in your business! One that will pay off tenfold by making order picking and order processing more efficient and faster for you.

But if you’re really on a small budget and can’t afford to invest in these specialist storage systems, there are still a few options left:

1) Use suppliers’ boxes as a temporary storage solution. Yes, why not! When you receive goods from a supplier, unpack them from the boxes, label them with your SKU numbers or whatever system you use, and place them back in the boxes. Sure, this won’t be the most efficient system to use, but in the beginning it will help you to stay organised.

2) Use plastic bags. If you deal with small items but can’t afford to invest in small item storage units, you can simply use cheap plastic bags to keep each item separate in the box. Make sure you label each bag with an SKU number and ideally the item’s name.

Plastic bags from ClearBags.com

3) Use any kind of boxes. You can visit a local shop and ask whether they have any boxes they are going to throw away (they usually do).

If the items you sell are bigger (like tablets for example) AND you don’t have that many different items, you can simply stack these boxes on top of each other in the corner of your room and you’ll be fine. If you can invest some money, get a shelving unit. One of the cheapest and most popular companies for affordable shelving units in the UK is:

BigDug.co.uk

You can get their cheap plastic units starting from 20 quid or metal units starting from 30 quid. Even better pricing is available for bulk purchases. Also, be sure to check out their Mega Shelving Deals. Quite often you can find very good deals there, like a 3-bay metal shelving unit for less than £100. A set up like this will last you for years.

SKU Numbers Explained

Once you have a proper storage unit in place, the next step is to actually create some sort of stock location system and this is what most small sellers overlook.

For example, if you don’t have such a system in place, when an order comes in you simply take an invoice and go to your storage unit and spend time trying to find where this item is located. That’s not efficient, far from it.

Obviously, if you are only selling 5 different tablets this won’t be a huge problem as you can simply put one type of tablet on one shelf, another one on a different shelf, etc. And you’ll know from the product packaging which one is which.

But if you have dozens or hundreds of different items in stock, this won’t work.

What you need is to create a stock location system where you assign a UNIQUE number or code to each of your bins, boxes or storage units.

It can be as simple as this, for example: 001, 002, 003 and so on. Each box/bin will have its own number. Very easy.

If you have bins with multiple dividers, you’ll need to introduce a second number, like this: 001-1, 001-2, 001-3 and so on. 001 will stand for the bin number and the second number, -1 – to the bin’s inner dividers.

If you have several shelving units, you can use numbers or even letters like this: A-001, B-002 etc. Each shelving unit will have its own letter, so when you pick goods you’ll know exactly where to go to pick an item.

The same method can be applied to small goods storage units like this: A-001-1, A-001-2 where:

A stands for the unit block
001 – individual bin
-1 – divider of bin 001

I hope this makes sense!

When you have a system like this in place, you can use this number on eBay (custom label in Selling Manager Pro inventory settings) or in your eCommerce shop. So when you print out an invoice or packing list, along with the item’s name you’ll get this SKU (stock-keeping unit) number which will show you exactly where in your warehouse the item is located.

To label boxes and products themselves, you can use a Dymo label printer. Get a roll of small labels (like 57mm x 32mm, 1000 labels on the roll, ID: 11354) and simply print out any labels you need. Dymo has a built-in number counter which you can use to print out say, 100 labels starting from number 1 and ending with 100:

You’ll find this function under Insert > Counter

What’s also great about Dymo software is that it has a built-in barcode generator and it’s actually a good idea to include a barcode on these labels too. Even if you don’t use a barcode system at the moment, trust me, over time when your business grows, you’ll be happy to have a barcode system already in place. And this doesn’t cost you anything extra, you’re already printing out these labels – just add barcodes to them at the same time!

When adding barcodes, simply use Code 39 from the list and in barcode data enter the same SKU number (e.g. 001 or A-001-2 etc.). What it will do is simply encode that same information into barcode standards so it can be read using a barcode scanner:

To sum it up – I can’t stress enough how important it is to have a good and efficient warehouse system in place to make your life as an online seller enjoyable. And yes, even if you’re just starting out you want to have a proper system in place from day one (ideally) as then you can put all your efforts into growing your business rather than wasting hours each day on order processing.

Thanks,
Andrew

30 Comments
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  1. Hi Andrew

    Thank you very much,appreciate you quick replay

    Eugen

    1. Andrew Minalto

      You’re welcome Eugen! 🙂

  2. Peter Thomas

    Hi Andrew

    I wanted to ask how you managed to get freight companies to deliver goods to your home address when you first started?

    I live in a terraced house and as even small quantities of products (say 500) usually come strapped to a palette, I’m thinking I’ll need to rent a storage/warehouse unit with an up-and-over door just to be able to take delivery of goods. Which is something I didn’t want to do until I’d grown the business

    Is there a way of getting Chinese suppliers to send their goods in a packed format that is easier for domestic delivery?

    Do you know if Woodland would have issues delivering shipments to a residential address?

    Would appreciate your thoughts

    Best wishes

    Peter

    1. Andrew Minalto

      Hi Peter,

      It’s really not an issue…

      You can simply break down pallets and un-load boxes manually. Drivers can wait those 10-15 minutes while you do this, some even help you with the un-loading.

      Of course, if it’s a full container load, this may take too long time but just few pallets, it’s not a problem.

      Andrew

      1. Peter Thomas

        Hi Andrew

        Thanks for the tip

        Much appreciated

        Peter

        1. Dear Andrew

          Thank you very much for your blog,it’s very helpful for all eBay sellers
          I would like to ask a very simple question which I haven’t find solution in my mind
          I’m already running business on eBay and haven’t add to all my goods SKU from the start,may I do it now someway to keep easy stock of products in my book.
          If yes,how it’s work exactly and here I mean to check for example weekly my sold items with stock list-how many have been sold in a week and how many have left?

          God bless you for your help
          Eugen

          1. Andrew Minalto

            Hi Eugen,

            Yes, of course you can do that now.

            Subscribe for Selling Manager PRO (if you don’t have it already) and use Custom Label for SKU numbers. More info on how to get started you’ll find here:

            http://pages.ebay.com/help/sell/pro-inventory-overview.html%20/

            Thanks,
            Andrew

  3. Hi Andy, hope u can help, I was wondering about investing in some of these nice draws like you say they look like a good investment the only problem I have is quantity.

    For example, I have some adhesive sticky images I sell which come in their own little branded packet (only about 10cm x 4cm) so we could fit probably about 40 or so of these packets in these draws however we literally have about 2 boxes per design of these packs.

    I’m sure you must have a similar situation with your products, how do you tackle this? With all your stock not being able to fit inside do you have a box somewhere that you have stock-checked and just replenish the trays when they start to go down?

    I’d be really appreciative of your advise as we want to implement a barcoding solution to reduce errors however first we really need to tackle our organisation I think.

    Much thanks,
    Mark

    1. Andrew Minalto

      Hi Mark,

      Yes, often times I do have to keep additional stock somewhere else and then replenish when levels go down in main unit. BUT this is not perfect scenario as it can be confusing to know which items are only in main storage and which ones are somewhere else.

      So I would rather recommend looking for larger draws OR us shel unit with plastic containers or even cardboard containers – large enough so you can keep all stock in one place.

      If that’s not possible, another strategy I use is that for some, most popular items I just use 2 or 3 draws side by side, for same product, keeping it all in one place.

      Hope this helps Mark!

      Thanks,
      Andrew

  4. […] For more tips & tricks on warehousing system, labeling and barcodes check out my warehouse guide for eBay sellers: Complete Warehousing Guide for eBay Sellers. […]

  5. Hi Andy, i was wondering when you were mentioning about the below:
    A stands for the unit block
    001 – individual bin
    -1 – divider of bin 001

    Do you normally group say similar products together in the same unit block? (i presume this is the rack/shelving column) eg “Acrylic Paint – Blue” with “Standard Paint – Blue”?

    Thanks,
    Mark

    1. Andrew Minalto

      Hi Mark,

      Yes, usually I keep similar items nearby as this can help to speed up order picking times.

      Over time it gets up mixed pretty bad though as some products will be discontinued leaving empty spaces which you’ll fill with different products.

      Thanks,
      Andrew

      1. Thanks Andy, do you have problems with incorrect items being shipped out because of the grouping of similar items?
        As with having someone barcoding each product, if someone mixes up the barcodes and puts say all the barcodes for A001-01 onto all products A001-02 instead which could easily happen and the products look similar.
        Or do you have a way around this? As I have a small warehouse growing and really would like to get a system in place for when we are much larger then it won’t be too problematic but it’s hard to know which routes to go.

        Many thanks,
        Mark

        1. Andrew Minalto

          Hi Mark,

          Obviously, when barcoding products you have to be extremely careful and pay attention to details to not mix up. We usually barcode products when they arrive from suppliers (if they already don’t have a barcode on). Usually each product comes in it’s own box so if you’re careful, you shouldn’t mix it up.

          As for the order picking process – if you’re using Linnworks for example, you can set it in a way that each item on every order must be scanned first before order can be processed. This essentially lowers miss picks to absolute minimum.

          Thanks,
          Andrew

  6. Oh yes, also… Do you have a book that contains all of the information that you have here on your site regarding the ins and outs of running an eBay business?

    I’m in the U.S., by the way.

    Mindy

    1. Andrew Minalto

      I have something better – a 15 hour home study video course:

      http://www.easyauctionbusiness.com/secret/

    2. Would love to see you write a book as well.

      I like having a textile item (a book, in this case) to refer to, say when I’ve forgotten how to do something. Would love to just open up the book and flip to whatever chapter is needed and run through the topic quickly.

      Just a thought.

      Love your website!!

      Mindy

      1. Andrew Minalto

        All my videos are transcribed and available as PDF files too.

        So in essence you can print them out and make a book! 🙂

        Thanks,
        Andrew

  7. In all my years of doing eBay, you have the most comprehensive, easy to understand, straightforward, actually usable tutorials I’ve seen. I am grateful to have found you!

    I have a question regarding this “warehousing” idea.

    I am, at current, not a big time eBay seller. I sort of use eBay as I would a Garage Sale. I store things up (that I am ready to part with) and every few months when I’m ready I list a bunch of items. Thing is, is that they are each and every one unique. A great deal of what I do sell is clothing. I currently have approximately 100 (maybe more) clothing items. The most space and accessibility efficient way for me to store these, of course, is to keep them on hangers and hung up.

    Would you say that it would be worth my time to catalog these items in a similar way to what you prescribe on this page?

    Wanting to be efficient in the long run.

    Thanks so much. You are just great!

    Mindy

    1. Andrew Minalto

      Hi Mindy,

      Yes, you can still do some sort of labeling here. Just assign a unique number to each hanger so you know exactly where each item is located. If you have a Dymo label printer, you can still print these labels using it or you can simply use paper tags you can attach with ribbon to each hanger.

      If you have multiple units (I guess you have as 100 is quite a lot), assign a number to each unit/rack, followed by hanger number. So it will look like A01, A02 etc.

      Hope this helps!

      Thanks,
      Andrew

  8. Hi Andrew, I am trying to set up my ebay barcode system as well. Added SKU for each individual items, and had a brother QL570 lable printer, which does not have the bar code generating function. My question is how to inport the sku information for sold item and printed the corresponding bar code on address label? Do I need a ERP software or it can be done simply by ebay function?
    Thanks
    Ken

    1. Andrew Minalto

      Hi Ken,

      You won’t be able to print barcodes on invoices/labels using just eBay or Selling Manager Pro. SMP can print SKU number in a number format but NOT as a barcode.

      To print barcodes, you’ll need to use a order processing software like Linnworks:

      http://www.linnworks.com/

      Thanks,
      Andrew

      1. Just started using SMP: how do I get it to print the SKU, preferably on the shipping label? The only place within SMP I see the SKU referenced is within inventory and listings?

        Also, could you run through an example of using barcode in a wharehouse, and why its better than an sku?

        Great article, and thanks in advance!

        1. Andrew Minalto

          Hi Robert,

          I’m not sure but I don’t think you can print SKUs on shipping labels via SMP. But it prints them on invoices. If you want to include them on shipping labels, you would probably have to export sales data into Excel and create labels there.

          Barcodes – there are many ways to use them in a warehouse, like:

          * When picking goods for order, you scan an item to be 100% sure to pick correct one. Many shopping carts, Linnworks supports order processing using scanned barcodes and system won’t allow you to process an order until all barcodes are scanned.

          * When you do inventory checks, again – very handy to find an item in system by just scanning it.

          * When you create purchase orders – again, when stock arrives, simply scan items, enter quantity and stock levels are adjusted automatically.

          And so on!

          Andrew

  9. […] Manager Pro. This gives you the option to add SKU numbers to items for easier integration with your eBay warehouse set-up. With SMP you can also set-up Low stock alerts which are very handy when dealing with hundreds of […]

  10. Thanks Andrew, I will look for it.
    Depending on the volume of sales, the number of items and the channels to sell, some companies use an ERP solution to manage the different aspects of their business (inventory, orders, clients, etc.), and sync all the information between the different channels.
    But first of all, you need to decide if you will open a physical store, a webstore and/or also sell on eBay and Amazon, to search the best solution you need 😉

  11. Excellent guide Andrew, thank you 🙂
    I have a question for you: which barcode scanner and software do you recommend to manage inventory in the wharehouse?
    And how to sync it with eBay? About this, I saw your link of Linnworks but is not available for eBay Spain.

    1. Andrew Minalto

      Hi Pau,

      As explained in the guide, you want to look for a Plug & Play type of USB scanner that DOES NOT require any software for it to work.

      Just do a search on eBay for “plug & play usb barcode scanner” and plenty of such scanners will show up, in various prices. If you need to move a lot with the scanner, consider buying wireless or even bluetooth type which can connect to iPad or any other tablet.

      Unfortunately I can’t recommend Linnworks alternative for Spain, as I haven’t looked into alternatives.

      Thanks,
      Andrew

      1. Thanks Andrew

        Thats the best information I have found about eBay.
        I sell up to 100 items per day 7 days a week on eBay, i do have a 30 x 10 stock room but could never link the SKU with the item location in my stock room.

        I will be setting up a 2 part label setup
        Top Large part customer address
        and bottom small part will be the SKU/Item location which will not be placed on the purchased item.

        Tony

        1. Andrew Minalto

          Hi Tony,

          Are you using Selling Manager Pro for stock control?

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