How To Set Up An eCommerce Warehouse 101: Everything You Need To Know

When it comes to running an eCommerce business, fulfillment is one of the most important parts of your eCommerce operations. Many eCommerce businesses start as simple drop shipping companies or even handle fulfillment at home or inside of a dedicated space within a retail shop. However, as your business expands, a smaller-scale fulfillment strategy will eventually outgrow the needs of your operations. Unfortunately, there is no “one-size-fits-all” approach to these challenges.

Some businesses decide to use a third-party logistics (3PL) provider as their fulfillment strategy as the next step of expansion. For eCommerce businesses in the early start-up phases, 3PL solutions are often the economical choice due to the substantial up-front investment required for things like hiring labor, procuring warehouse equipment, and leasing a distribution space.

Once your eCommerce business reaches a level of revenue and order fulfillment volume, however, in-house fulfillment is often the most economical option. With in-house eCommerce warehouse fulfillment, businesses will have more control over their processes and more importantly, their brand’s reputation. Significant risks are involved, especially at scale, when using a 3PL solution due to the lack of control of the fulfillment process. 

This article aims to help eCommerce businesses who are in the transition process of moving away from a 3PL to an in-house fulfillment operation, or for those who need to build a logistics infrastructure (regardless of the phase of business), that will scale their operations to significantly higher volume.

Designing Your eCommerce Warehouse Layout

ecommerce warehouse layout

Before jumping into the equipment or technology that is required to run an in-house eCommerce fulfillment operation, you must first understand the space requirements of your warehouse. 

No matter what the square footage or layout of your barebones warehouse is, you’ll always run into capacity issues. The key to avoiding these storage bottlenecks is to understand the individual systems that make up your entire operation, such as:

  • Storage requirements: How much inventory do you plan on holding at any given time?
  • Loading docks (receiving): Where are your loading docks in relation to where you are storing your product?
  • Packing Stations (shipping): Where do you plan to position your packing or staging stations so that the product flows in an efficient manner, inbound to outbound?
  • Employee space: Where can employees store their belongings, or have room to take a break during lunch or team meetings
  • Product types: Will you be storing individual items, or holding palletized inventory? Or is it a mixture of both?
  • Security: Are you selling high-value items, such as jewelry? If so, how and where will those items be stored?

Once you have a solid understanding of these requirements you can then start to piece together the necessary components to build the systems in your eCommerce fulfillment warehouse. We’ll outline what key warehouse equipment you need, and the considerations of implementing them in the next section of this article.

Selecting The Right Equipment For Your eCommerce Warehouse

Choosing the right equipment for your warehouse is critical, but don’t forget to take into consideration how you plan on using the equipment, and what the right way is to implement it into your warehouse for maximum efficiency.

Storing Inventory In Your eCommerce Warehouse

Pallet Racking & Carton Flow Systems

The most common type of pallet racking used in eCommerce warehouses is selective pallet rack. Selective pallet racking allows you to pick which pallet you want without having to move any other pallets. As a high-volume eCommerce warehouse, chances are your products are coming in on pallets, and by building a high-enough pallet rack system you can maximize the storage of your inventory by taking advantage of the vertical space in your warehouse.

Despite the ubiquitous nature of selective racking, your eCommerce might benefit from a different type of pallet racking system called a carton flow system. High-throughput warehouses where there are a low amount of SKUs and a high volume of product stored on cases instead of pallets will find this system much more useful than a traditional selective pallet racking system. In other words, if your eCommerce operation stores products in less than pallet loads and there is a large volume of identical products that need to be moved quickly, carton flow systems are the best choice for your warehouse.


ecommerce carton flow

Carton flow systems are different from selective racking in the sense that consist of rollers or wheel tracks that are installed on your pallet rack. These structures are slightly angled downward. As items are pulled from the front of the rack (the most accessible pick point of the system), product will flow from the load point in the back. Carton flow systems are also not subject to the two-deep maximum limitation of depth, which is the case in selective racking systems. Carton flow systems also only work with First In, First Out (FIFO) inventory systems, so understanding your inventory account methodology is critical when choosing your pallet racking system.

ecommerce pallet rack vs high density comparison

Another thing to consider when implementing a pallet rack system in your eCommerce warehouse is space maximization. Pallet rack systems allow you to use the height of your warehouse to your advantage to maximize space, but the way you arrange your pallet rack on the warehouse floor plays just as important of a role.

ecommerce aisle width

The space between the aisles of your pallet racking is key when looking to maximize your inventory storage. If you are using a selective pallet racking system, chances are you will need a forklift to access product that is stored higher up on the rack. Because of this, a selective pallet racking system will require a wider minimum width between the aisles, which can be determined by looking at the radius specifications of your forklift.

ecommerce aisle width chart for forklifts

If you are using a carton flow system in your pallet rack, you can maximize the space in your warehouse by taking advantage of lower minimum width requirements. Additional space only needs to be accounted for in the back of your carton flow rack to allow employees to load the rack from the back. The minimum space between the aisles can be calculated by the radius requirements of your pallet jack.

Generally speaking, carton flow systems allow your warehouse to have a higher storage density. As mentioned previously, carton flow systems work best in specific settings where the product types are relatively uniform and you are using a FIFO accounting methodology. Selective pallet racking systems take up more space, but if your products are being brought in on full pallets, then you’ll have to account for the extra warehouse footprint needed to allow for forklift access between the aisles.

Other Types of Industrial Shelving for eCommerce Warehouses

Pallet racks are ideal for storing palletized product loads or bulk products that come in from your loading dock. But what about the smaller SKUs that come in single boxes? Enter, wide span shelving.

ecommerce wide span shelving

Wide-span shelving is ideal for storing manually loaded, non-palletized loads. Products that need piece-by-piece picking with slower stock rotations, or bulky, irregular-sized materials can be stored on wide-span shelving. Wide-span shelving is accessible from all sides by hand which makes it a great addition to your eCommerce warehouse when you need fast, easy access to items.

Wide-span shelving isn’t just limited to product storage applications, you can also store other critical items such as supplies, totes, and even archive records. 

There are two other types of industrial shelving systems worth mentioning: clip shelving and rivet shelving. Clip shelving is made entirely of steel and is a heavy-duty alternative to wide-span shelving. Clip shelving systems are not accessible on all sides (like wide-span shelving) due to the existence of a back brace and side brace to add reinforcement. Clip shelving systems are mostly used in rugged warehouse settings, like auto parts eCommerce retailers.

ecommerce rivet shelving

Rivet shelving is a simple, easy-to-construct industrial shelving system that has a lower weight capacity than clip shelving and wide-span shelving. Rivet shelving is not as rugged as clip shelving and is usually not available in the sizes that wide-span shelving can be purchased in. Rivet shelving can be used to store smaller products and oddly shaped items, like wide-span shelving, however, keep in mind that the storage capacity of a rivet shelving system is much lower than the alternatives.

ecommerce metal clip shelving

Most eCommerce warehouses will benefit from using both pallet rack and some form of additional industrial shelving. Bulk products, palletized loads, or high volume products can be stored directly on your selective rack system or carton flow system after they come off the loading dock. 

Smaller products can be stored on your wide span, rivet, or clip shelving, in addition to your warehouse’s miscellaneous items. Using various types of storage in your warehouse will ensure your products' accessibility is designed for the right scenario.

Moving Items In, Around & Out of Your Warehouse

Using Gravity Conveyors In Your eCommerce Warehouse

In the diagram above, a gravity conveyor is being used to assist in receiving inventory from the loading dock. Conveyors like the NestaFlex Flexible Gravity Conveyor system are great for these purposes. 

The NestaFlex system has a load capacity of 250 lbs per square foot and comes with 360-degree swivel casters, allowing you to set your conveyor up in a straight line, zig-zag, or a complete circle. Cases or non-palletized loads can be easily taken off the gravity conveyor and transported to different locations within the warehouse via forklift or a picking cart.

Unloading & Transporting Pallets With Pallet Jacks & Forklifts

ecommerce pallet jacks

For smaller loads, pallet jacks can be used to move items throughout your warehouse. Larger loads would most likely require a forklift. In either case, you also want to make sure your pallet racking setup and footprint allow enough space to transport the product to its final destination. 

Don’t forget to pay attention to the load capacity of your pallet jack, if you plan to use one as your main mode of transporting product. Pallet jacks (new or used) are available in a variety of load capacities and configurations, like narrow, low profile, and long fork. Paying attention to the specs of your pallets will help you determine the best pallet jack for your eCommerce warehouse.

Picking Items With Rolling Ladders & Stock Picking Carts

Your order picking strategy plays an important role in whether your customers have a positive or negative experience with your eCommerce business. An efficient picking strategy leads to higher order accuracy and on-time order fulfillment, as well as minimizes the walking time in your warehouse. Ultimately, the design of your warehouse and the equipment you use are a function of how well your picking strategy will be executed.

When products arrive at your eCommerce warehouse and are transported to their storage destinations, you can speed up the retrieval process by using two useful pieces of equipment: rolling ladders and picking carts.

ecommerce rolling ladder height

Rolling ladders allow your warehouse team to access products that are stored higher up, especially in warehouses that leverage pallet rack storage systems. Rolling ladders are available in varying heights that can be purchased to match the specs of your rack. Rolling ladders also have wheels at the bottom to make it easier to retrieve items in different locations within your warehouse. Most newer rolling ladders also have a variety of safety mechanisms to help prevent unforeseen injuries. If you’re looking to save some capital, consider purchasing used rolling ladders. 

ecommerce picking carts

Picking carts enable your fulfillment team to quickly pick products at the ground level. Regardless of which picking strategy you use, stock picking carts are a critical component to maintaining an efficient eCommerce fulfillment operation. Leveraging a system of rolling ladders, stock picking carts, and a strategy like zone picking could greatly reduce the amount of walk time and labor effort required from your fulfillment team.

Stock picking carts can be purchased in a variety of configurations, some with single shelves and others with multiple shelves. Many stock picking carts also come with dedicated barcode label scanner holders to make it easier to track inventory as it moves through the warehouse. Like rolling ladders, you can also save some capital up-front by considering used picking carts. 

Designing a Packing Station To Move Product Out of Your Warehouse

ecommerce packing station

After you’ve nailed down your picking strategy and have the right equipment in place, it’s time to move onto the next part of the eCommerce fulfillment process: packing and shipping. A complete packing station should include:

  • A large enough bench or tabletop that allows enough space to pack, label, and prepare orders for shipment
  • Drawers, storage, and uprights or dividers to store various sized boxes or envelopes
  • Shelves to store additional supplies like labels and paper
  • Dedicated space for your label printer
  • An optional but worthwhile add-on: standing mat - designed to reduce fatigue from standing for extended periods

When designing your warehouse layout you should also consider the placement of your packing station in relation to your product storage and shipping dock or door. Your packing station should be positioned in a place where it fits the flow of product, ideally in a manner that reduces walk time in your warehouse. Lower walk times equals faster fulfillment and reduced labor costs.

Keeping Your Employees & Product Safe & Secure

Keeping Your Employees Items Safe, While Keeping Them Productive

In a sizeable warehouse operation, the average picker will walk 18 miles during a single shift. With that much movement in a single day, your warehouse team will need a dedicated space to decompress and take a break. Implementing a dedicated employee break area in your eCommerce warehouse with dedicated lockers for each team member shows that you care about the wellbeing of your employees.

ecommerce employee lockers

Furthermore, a dedicated employee area allows your team to separate work and play. Employee lockers can be used to instill a mobile phone usage policy, requesting that employees stay off their phones while running your shipping, receiving, picking, and packing operations. This will not only uphold the safety in your warehouse - it also keeps your warehouse operations running efficiently by removing the element of distraction.

Storing Valuable Items or Product

ecommerce wire mesh cages

If your eCommerce business sells expensive equipment like electronics or jewelry, consider the use of wire mesh security cages to store your products.

Wire mesh cages can be used in conjunction with wide-span shelving for quick picking and easy product access while only allowing access to expensive products to dedicated employees. Wire mesh cages are available in two-sided, three-sided, and four-sided configurations for flexible integration into any warehouse layout.

Most wire mesh cages include various door configurations as well, including sliding doors or hinge doors, secured by a lock and key. The wire mesh cages we stock at American Storage & Logistics include a 3.7” sweep space at the bottom of the cage for easy housekeeping.

Procuring The Right Equipment For Your eCommerce Warehouse Operations

The profitability of setting up an in-house eCommerce warehouse fulfillment center is highly dependent on the layout of your warehouse, the processes you put in place (shipping, receiving, picking, and packing), and the equipment you choose to fuel your operations. At scale, a properly designed eCommerce warehouse system allows you more control over a 3PL solution, allowing you to tweak your processes to minimize labor costs and improve efficiency.

If you’re looking for a reliable partner to supply the equipment needed for the material handling and storage component of your warehouse operations, visit our website to explore our in-stock inventory of pallet rack, shelving, pallet jacks, rolling ladders, and more. If your business is located in the Battle Creek, Grand Rapids, Kalamazoo, or Lansing areas, ask us about FREE same-day pickup from our warehouse or low-cost next-day delivery, starting at $65.