Aaron Rubin of ShipHero shares the best way to set up your e-commerce warehouse

5 minute read

Your e-commerce business is booming with orders rolling in. It’s the right time to open your first warehouse – or expand an existing one into a larger space. You can fuel future success by setting up your new warehouse for the smoothest flow possible.

Here are some common questions we get asked at ShipHero, and my tips on how to set up a warehouse and shipping space for the demands of a growing online store.

Read also: An exclusive snapshot of Canadian e-commerce by the numbers

First, some definitions

Receiving station: Where new products are checked in before being stocked on the shelves. If you don’t have a dedicated returns station, this is also where returns are checked in.

Packing station: Where the customer’s order items are packed into a shipping box or poly-bag and the shipping label is applied.

Staging station: The section where packed items are put on skids or carts, awaiting a move to the outbound shipping station.


Plan on using about 20 per cent of your square footage for the staging area and dividing the other 80 per cent between shipping, receiving and product storage.

Planning out your warehouse

First, factor in support poles and any other obstructions into your planning. Fit them into your setup so that your staff won’t lose time walking around them dozens of times each day.

In and out

Now look at the space where products arrive and go out. Ideally, you have a loading dock, but if you don’t, create a plan wherever products will come in and out. Create separate sections for inbound and outbound products – you don’t want to confuse them! A simple way to do this is to put a sign on a support pole or the wall. You can also use tape on the floor to indicate inbound and outbound sections.


The doors are where products come in and go out, and that’s also where theft happens. If an entrance will ever be left open, don’t put anything that can be stolen within 10 feet of it. Video cameras and an alarm can help, but it’s amazing how quickly products can “disappear.” It also helps to orient your shipping and receiving stations so that people working there can see the entrances.

The staging area

Leave approximately 20 per cent of your total warehouse space as the staging area. It should be adjacent to the shipping station. The staging area contains your inbound and outbound sections, along with garbage (going out) and packing supplies (coming in). On busy days, you will be glad to have that space.

Which way should my shelves go?

Once your shelves go up and your warehouse is running, it will be tough to find time to change them. So you want them to provide the best possible combo of storage and access from the start.

Keep your shelving running in one direction – don’t put shelving at one end that runs the other way. If shelving goes in two directions, you end up with less usable space.

Orient the aisles so that you can see down the aisles from the packing stations. The ability to monitor pickers is more important than small improvements in walk times.

If you have a choice, the aisles should go down the longer dimension, creating fewer, longer rows. When aisles are aligned this way, you can fit in more shelving.

Pallet-sized and pickable shelving tips

Most e-commerce warehouses have both pallet-sized storage and pickable shelving. Pallet-sized racking is meant for bulk storage, while pickable shelves are sized for human arms to select one item at a time to fulfill an online shopper’s order.

Pallet racks

Pallet-sized shelving is used for:

  • Bulk stock
  • Overstock
  • Packing supplies
  • Getting items out of the way quickly when shipments arrive at inconvenient times.

Your aisles should be wide enough to handle a pallet jack (AKA a pallet truck, pump truck or jigger). You’ll need room to pull your pallet jack back all the way once its load is released. This will depend on your model, but figure that the jack and the human pulling it will need a minimum of 125 centimeters.

If you have a forklift, check the forklift’s manual for its aisle width radius requirements. Expect to need an aisle width of 185 cm to 400 cm if you need to accommodate a forklift.

Fire safety means that you will need to leave a safe amount of flue space between pallet racks. If you ever have the bad luck to experience a warehouse fire, flue spaces slow down the horizontal spread of fire while allowing water from sprinklers to reach the bottom of the fire.

Pickable shelves

Pallet racks, while great for bulk storage, are a poor choice for small item picking. For picking, use 183 cm high shelving and fit six to nine shelves vertically up each picking unit. Space the shelving units between 85 cm and 105 cm apart. You will be able to get a picking cart (but not a pallet jack or forklift) down the picking aisle.

Ideally, these shelves are set up so that pickers can reach every product without having to climb or over-extend (you can use rolling stairs to provide access to higher shelves, but this costs time and space):

  • Use narrow shelves, typically 30 cm to 50 cm deep and put them back to back.
  • Alternatively, use deeper shelves and put in dividers to separate the 2 sides.
  • Use dividers or bins to keep items separate
  • Don’t be tempted to use the floor as your bottom shelf, as you’ll want to keep items off the floor to prevent damage from minor flooding.

An example of an efficient e-commerce warehouse floor plan

It may take a little more planning up front, but setting up your warehouse the right way will help your orders reach customers faster, reduce returns due to picking/packing errors, help prevent workplace injuries and reduce theft.

Read more: Fulfillment: the key to meet your customers’ need for speed

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picture of Aaron Rubin

Aaron Rubin founded and was the CEO of a mid-size e-commerce company for 14 years. After struggling to find a warehouse management solution (WMS) that provided the efficiency, accountability and ease of use needed at a reasonable cost, he founded ShipHero, a robust WMS for e-commerce small-to-mid-size businesses. ShipHero is a Canada Post partner.