---
title: "What Is WMS? How Does a Warehouse Management System Work? (Guide for E-Commerce)"
description: "What is WMS and what is it for? The working steps of a warehouse management system, shelf addressing, order picking methods, barcode counting and what to look for when choosing a WMS."
url: https://www.faprika.com/en/blog/what-is-wms-how-does-a-warehouse-management-system-work
language: en
site: Faprika
---

# What Is WMS? How Does a Warehouse Management System Work? (Guide for E-Commerce)

> What is WMS and what is it for? The working steps of a warehouse management system, shelf addressing, order picking methods, barcode counting and what to look for when choosing a WMS.

As sales grow, the first place most e-commerce businesses struggle is the warehouse. Products are searched for shelf by shelf, the wrong size or color gets shipped, the stock in the system doesn’t match the shelf, and the day’s orders don’t get done by evening. The concept most often cited as the common solution to these problems is **WMS**, that is, a warehouse management system.

In this guide we explain what WMS is, how it differs from stock-tracking software, how a warehouse management system works step by step from goods receipt to shipping, shelf addressing, order picking methods and barcode counting. At the end of the article you will also find a checklist you can use when choosing a WMS for your business.

Key Takeaway

“Stock tracking tells you how many units of a product there are; WMS tells you where it sits, who picked it and whether it went into the right box. As the warehouse grows, the real question is no longer ‘how many?’ but ‘where, and is it right?’”

## What Is WMS?

WMS (Warehouse Management System) is software that manages which shelf each product in the warehouse sits on, where incoming goods are to be placed, how orders are picked and verified, and how stock is counted; in Turkish it is called **depo yönetim sistemi**.

The basic idea of a WMS is simple: every shelf and bin in the warehouse is given an **address**, every product sits at an address, and every movement in the warehouse (placement, transfer, picking, counting) is recorded by scanning barcodes. This way the information in the system stays identical to the real situation on the shelf.

## What Is WMS Used For?

WMS takes warehouse work out of people’s memory and moves it into the system; the product’s location, picking order and verification are managed by the screen. Its main benefits for an e-commerce business are:

- **No searching for products:** Every product’s shelf address is known; the screen leads staff to the right bin. Even someone new to the warehouse finds the right product on day one.
- **Wrong products don’t get shipped:** Every product picked and packed is scanned by barcode; a wrong size, color or quantity is caught at the moment of scanning.
- **Picking gets faster:** Multiple orders are picked in a single trip, in shelf order; staff don’t walk the whole warehouse for every order.
- **Stock stays accurate:** Putaway, removal from shelves and counting are posted to stock; the difference between stock in the system and products on the shelf shows up in a report.
- **Work becomes measurable:** Who did which task, when and at which bin is recorded; where a stock difference came from can be traced.
- **Marketplace stock is protected:** The warehouse feeds a single stock; the stock information sent to marketplaces matches the real situation on the shelf, and products that aren’t there aren’t sold.

We recommend reading

What Is Warehouse Management? Warehouse Management and Inventory Management in

E-Commerce

## What Is the Difference Between WMS, Stock-Tracking Software and ERP?

Stock-tracking software shows **how many units** of a product there are, WMS manages **where** these products sit in the warehouse and how they move, and ERP manages **all of the business’s resources** such as accounting, purchasing and finance. The three do not replace one another; they complement each other.

| Topic | Stock tracking | WMS | ERP |
| --- | --- | --- | --- |
| Core question | How many are there? | Where is it, and how is it picked? | How are the business’s resources managed? |
| Shelf and bin address | No | Yes, every product at an address | Usually none or limited |
| Order collection | No | Route, cart and priority management | No |
| Barcode verification | Limited | At every step | Limited |
| Counting | Based on the total quantity | Bin by bin, with a difference list | As an accounting record |
| Whose job is it | Product and sales team | Warehouse team | Accounting, finance, management |

In e-commerce, the most efficient setup is for the WMS to receive order and product information from the e-commerce platform and, when the work is done, update the order status, stock, shipping and invoice automatically. Systems that work separately and are fed by hand add a new source of errors to the warehouse.

## How Does a Warehouse Management System Work?

A warehouse management system moves every step forward by scanning barcodes, from a product’s arrival in the warehouse to its departure for shipping, and posts every step to stock. In a typical e-commerce warehouse, the process has six steps:

*Görsel: Answering what WMS is with a process flow: the goods receipt, putaway, picking, verification, packing and shipping steps in a warehouse management system (The journey of an order in a warehouse management system, from goods receipt to shipping.)*

### 1. Goods Receipt

Products arriving from the supplier are scanned by barcode and recorded. The incoming quantity is compared with what was expected; missing or surplus products are noticed before they even enter the warehouse.

### 2. Putaway (Placement)

The product is placed in a slot with a specific address. Shelving is usually a two-scan process: first the slot barcode, then the product barcode. Once scanning is complete, stock is updated and the system records how many units of the product sit in which slot.

### 3. Order Picking

Orders are combined into a single picking list. The screen guides staff along the shelves in order and shows which order each product belongs to. Picking is the most time-consuming task in the warehouse, and most of the time a WMS saves comes from this step.

### 4. Verification

Before packing, every product in the order is scanned once more. A missing or wrong product overlooked during picking is caught at the packing table, before it leaves for the carrier.

### 5. Packing and Labeling

For the verified order, the order slip and shipping label are printed and the products are boxed. In a properly set up system, no information is entered manually at this step; the slip and label are generated automatically from the order.

### 6. Shipment

The box is handed over to the carrier; the order status, stock and invoice are updated, and the customer receives the shipping information.

Two ongoing tasks run behind these six steps: **counting** keeps the shelf stock and the system stock identical, while **reports** show which step was done by whom and when.

Recommended reading

E-Commerce

Order Management: A Step-by-Step Guide from Order to Delivery

## What Is Shelf Addressing and How Is It Done?

Shelf addressing means naming every slot in the warehouse with a unique code that carries its shelf, section, level and slot information. This code is also the barcode on the slot's label; staff scan it when putting products away and when picking.

*Görsel: Shelf addressing example: shelf, section, level and bin information in the shelf address R03-B07-K2-G2, and the barcode on the bin label (The parts of a shelf address: shelf, section, level and slot.)*

For example, the address **R03-B07-K2-G2** means “shelf 3, section 7, level 2, slot 2.” To set up addressing, follow these steps:

1. **Map the warehouse:** Work out the number of floors, aisles, shelves and slots; decide the direction of the aisles and the picking order.
2. **Choose an address format:** Use the same format across the whole warehouse; an address should read from left to right, from largest to smallest.
3. **Create slots in bulk:** Instead of creating slots one by one, create them all at once in the system by entering the number of shelves and levels.
4. **Print and attach the labels:** Each slot's label carries its own barcode; the labels must be in place before shelving begins.
5. **Define the quick areas too:** If places outside the shelves, such as pallets, sacks or campaign areas, are not addressed, “lost” products appear in the system.

Tip

Place best sellers in slots near the exit

Addressing is not just about order; it is about speed. Place the most frequently picked products in slots near the packing table and at waist height, and slow sellers in upper and distant slots. Regularly check how many days a product has been sitting on the shelf, so slow-moving products do not take up valuable slots for nothing.

## What Are the Order Picking Methods?

The order picking method determines in what pattern the products in orders are taken from the warehouse. Four basic methods are used in e-commerce warehouses: single-order picking, batch (cart) picking, zone picking and wave picking.

*Görsel: Order picking methods: diagrams of single-order picking, cart picking, zone picking and wave picking (The four basic order picking methods used in e-commerce warehouses.)*

| Method | How does it work? | When is it suitable? |
| --- | --- | --- |
| Single-order picking | The warehouse is walked separately for each order. | When daily orders are few and the warehouse is small. |
| Batch (cart) picking | Several orders are picked in a single round; each order's products go into its own basket. | As the number of orders grows; the most common efficient method in e-commerce. |
| Zone picking | The warehouse is divided into zones; each employee picks only the products in their own zone, and the order is combined afterwards. | When the warehouse is large or multi-level. |
| Wave picking | Orders are picked in groups at set times. | When carrier pickup times are fixed. |

### Why Does Batch Picking Stand Out?

In batch picking, staff put several baskets on their cart; each basket belongs to one order. The screen advances in shelf order and tells you which basket the scanned product goes into. Products from different orders on the same shelf are taken in a single stop. This shortens the walking distance and sorts the product into the right order as it is picked, and no separate sorting table is needed.

### Which Order Should Be Picked First?

The picking sequence matters as much as speed. A good WMS lets you open a picking list using order filters:

- **Single-item orders first:** They are picked quickly, verified in a short time and bring down the day's order count fast.
- **Then multi-item orders:** They suit batch picking better.
- **Orders containing a specific product:** The orders for a newly arrived or campaign product go out in one go.
- **Marketplace orders nearing their deadline:** Orders whose shipping time is about to expire are moved to the front as urgent.

We recommend reading

Volumetric Weight (Desi) Calculation: How Is Shipping Desi Calculated? (Calculator and Examples)

## Is a Handheld Terminal Required for a WMS?

No, it is not required. A handheld terminal is the best-known device for scanning barcodes, but it is expensive. Today many warehouse management systems let you do picking, shelving and counting by scanning barcodes with a smartphone camera.

| Device | Pros | Point to watch |
| --- | --- | --- |
| Handheld terminal | Durable, fast scanning, designed for warehouses | High cost per device |
| Barcode scanner (wired or wireless) | Inexpensive, very fast at a desk | Used together with a computer, tablet or phone |
| Smartphone camera | No extra device needed, staff start right away | Screens must be phone-friendly, with large buttons |

When choosing, look at the software before the device: if the system supports more than one scanning method, you start with phones and add scanners or handheld terminals at busy stations as the business grows.

## How Is Stock Counting Done with a WMS?

Counting with a WMS is not done for the whole warehouse at once but by scanning slot by slot; at the end of the count, the difference between the system and the shelf is shown as a list and is written to stock once approved.

1. **Open a count:** The warehouse or zone to be counted is selected.
2. **Scan the slots:** The barcode of each slot is scanned, followed by the products inside it. Counting can also be done with a phone, moving section by section without closing the warehouse.
3. **Review the difference list:** The system quantity and the counted quantity are shown side by side; missing and surplus items are flagged.
4. **Approve:** The differences are written to stock. Slots that were not counted at all are reset to zero, so old records do not leave “ghost stock” in the warehouse.

Because slots where picking staff said “I couldn't find it” drop onto the counting list automatically, counting stops being a job done only once a year; problem slots are counted on the day the problem arises.

Tip

Shelve first, then synchronize

When moving to a WMS, wait until all products have been shelved before synchronizing shelf stock with product stock. A synchronization run while unshelved products remain sets those products to zero in the system and takes them off sale.

We recommend reading

What Is Stock Tracking? How Is It Done?

## How Are Returned Products Managed in the Warehouse?

A returned product is received like new goods arriving at the warehouse: it is first scanned and inspected, shelved in a slot and returned to stock if it is in sellable condition, and held in a separate area if not. If returns have no separate flow in the warehouse, the product piles up next to the packing table and appears nowhere in the system.

1. **Receiving:** The return package is opened, and the product and order are scanned to match the return to its order.
2. **Inspection:** The product's label, packaging and condition are checked; it is classified as sellable or not sellable.
3. **Shelving:** A sellable product is scanned into a slot and returns to stock; for an unsellable product, a separate address (for example a returns or damaged area) is used.
4. **Record:** The reason for the return is recorded; recurring reasons on the same product are used to fix the product description, size chart or packaging.

Returning a returned product to a quick-access shelf means it can be sold again; every return that does not go back to the shelf is sellable stock waiting for nothing.

## Which E-Commerce Businesses Need a WMS?

If you experience several of the following situations in your warehouse, your business has outgrown a manually run warehouse:

- Staff search shelf by shelf to find a product, or only one person knows where a product is.
- Orders go out with the wrong product, wrong size or a missing product and turn into returns and complaints.
- A product sold on a marketplace cannot be found in the warehouse; the stock in the system does not match what is on the shelf.
- The day's orders miss the carrier pickup time.
- It takes days for new staff to get up to speed.
- The warehouse is spread across several floors or several warehouses.
- It is unknown who did how much work or where a stock difference came from.

It is not too early for a small warehouse to move to a WMS either: setting up the structure while there are few products is much easier than addressing thousands of products later.

## What Should You Look for When Choosing a WMS?

The right WMS is the one that fits your warehouse's current layout and lets you enable new rules as your business grows. When choosing, ask these questions:

1. **Is it in the same system as your e-commerce platform?** If orders, products and stock are in one place, there are no transfer errors or delays.
2. **Which devices does it work with?** Are phones, barcode scanners and handheld terminals all supported?
3. **Are the picking methods sufficient?** Are batch picking, filter-based prioritization and multi-level warehouses supported?
4. **Is there a verification step?** Can a final scan and automatic slip printing be done before packing?
5. **How is counting done?** Is there slot-by-slot counting, a difference list and approved synchronization?
6. **Are marketplaces and shipping connected?** Does warehouse stock go to marketplaces, and order status to the carrier and invoicing, automatically?
7. **Can permissions be separated?** Can shelving, transfer, picking and verification be tied to separate permissions?
8. **What do the reports show?** Can shelf occupancy, staff performance, stock differences and transaction history be tracked?

## How Do You Move to a WMS?

Moving to a WMS can be done in five steps without stopping the warehouse:

1. **Set the rules:** Make decisions such as the picking method, whether verification is mandatory and at which step stock is deducted up front.
2. **Create the slots:** Enter the warehouse structure into the system, create the slots in bulk and print their labels.
3. **Shelve:** Place products into their slots by scanning them; start with the best sellers.
4. **Do the first count:** Once all products are shelved, count and verify the stock from scratch.
5. **Move to picking:** Start with single-item orders first, then move to batch picking as the team gets used to it.

## Common Mistakes When Using a WMS

- **Putting products in an unlabeled slot:** A product in a place with no address gets lost in the system; every area, including pallets and sacks, must be labeled.
- **Moving without scanning:** A product moved without being scanned into a slot continues to appear in its old location in the system.
- **Synchronizing before shelving is finished:** The stock of unshelved products is reset to zero.
- **Skipping the verification step:** No matter how good picking is, the final scan is the last gate that prevents a wrong product from going out to the carrier.
- **Giving everyone all permissions:** If transfer and shelf-removal permissions are not restricted, the source of a stock difference cannot be found.
- **Leaving counting to once a year:** The bigger the difference gets, the harder it is to find its source; problem slots should be counted on the day the problem arises.

## WMS Checklist

| Check | Why does it matter? |
| --- | --- |
| Does every slot have a barcoded label? | A product without an address gets lost in the system. |
| Are best sellers close to the exit? | The picking route gets shorter. |
| Is picking done by basket and in shelf order? | Several orders go out in a single round. |
| Is a picking priority defined? | Orders nearing their deadline are not delayed. |
| Is verification done before packing? | A wrong product does not go out to the carrier. |
| Are slots reported as “not found” being counted? | Stock differences are closed before they grow. |
| Are permissions separated by job? | Every movement has a known owner. |
| Does warehouse stock go to the marketplaces? | A product that does not exist is not sold. |

Okumanızı öneririz

Pazaryerleri ve

E-Ticaret

Siteleri İçin Stok Kodunun Önemi

## Warehouse Management with Faprika Depo

Faprika's warehouse management system, [Faprika Depo](https://www.faprika.com/en/add-ons/wms-warehouse-management), handles all warehouse work from shelving to counting inside your Faprika panel. There is no separate warehouse program or separate data; orders, products and stock are in one place.

*Görsel: Warehouse management system picking screen: shelf address on a smartphone, the scanned product, the PUT IN BOX 3 alert and order carts (Batch picking screen: shelf address, the scanned product and the basket it goes into.)*

- **Shelf and location:** You define your warehouse as floors, aisles and slots; 3,000 slots are created in one go, and slot labels are printed with their barcodes.
- **Goods receipt and transfer:** Shelving takes two scans; products are moved between slots and warehouses, and products awaiting supply are collected in a list.
- **Batch picking:** Several orders are picked in a single round, in shelf order; the screen tells you which box the product you scanned goes into. A “WRONG PRODUCT” warning appears if the product is wrong.
- **Picking scenarios:** A picking list is opened with filters such as single-item orders first, only orders containing a specific product, or marketplace orders nearing their deadline; it works in single-level and multi-level warehouses.
- **Picking with a smartphone:** An expensive handheld terminal is not required; the phone's camera reads barcodes one after another. If you have a handheld terminal or barcode scanner, they work too.
- **Order verification:** A final scan is done before shipping; the verified order's slip is printed automatically, and the order automatically goes to the carrier, ERP and e-Invoice.
- **Counting and reports:** Slot-by-slot counting, a difference list and approved synchronization; reports on shelf occupancy, staff, stock differences and transaction history.

You can see which plans include the warehouse module and the Order Verification module used in batch picking, and in which they are added with an extra license, on the [Faprika Depo](https://www.faprika.com/en/add-ons/wms-warehouse-management) page and in the comparison of [the e-commerce plans](https://www.faprika.com/en/pricing).

## Frequently Asked Questions

**What is WMS?**

WMS (Warehouse Management System) is software that manages which shelf each product in the warehouse sits on, how orders are picked and verified, and how stock is counted. It gives every bin an address and records every movement in the warehouse by scanning barcodes.

**What is the difference between WMS and stock-tracking software?**

Stock tracking shows how many units of a product there are. WMS manages which bin the product sits in, in what order it will be picked and whether it goes into the right order; it includes shelf addressing, cart picking, verification and bin-by-bin counting.

**Is a handheld terminal needed for a warehouse management system?**

No. Many warehouse management systems allow picking, putaway and counting to be done by scanning barcodes with a smartphone camera. A handheld terminal or barcode reader speeds up busy stations but is not required to get started.

**How is shelf addressing done?**

Every bin in the warehouse is given a unique code carrying the shelf, section, level and bin information, for example R03-B07-K2-G2. Bins are created in bulk in the system, a barcoded label is printed for each bin and stuck on the shelf, and products are placed in these bins by scanning them.

**What is cart picking?**

Cart picking is a method in which multiple orders are picked in a single trip. The picker’s trolley holds one cart for each order; the screen moves in shelf order and shows which cart each scanned product goes into. This shortens walking distance and allocates products to the right order as they are picked.

**Should a small e-commerce business use a WMS?**

If products are hard to find, wrong products are being shipped or the stock in the system doesn’t match the shelf, WMS is useful for a small business too. Setting up the warehouse layout while the product count is low is much easier than addressing thousands of products after you have grown.

Get your warehouse in order, ship your orders error-free

With Faprika Depo, manage all your warehouse work from your panel, from shelf addressing to batch picking, from the final scan before shipping to slot-by-slot counting; an expensive handheld terminal is not required, start with a smartphone.

Explore Faprika Depo

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