Warehouse & logistics
Bin Location
By the Supply Chain Manager team · Updated October 16, 2026
A bin location is the specific, addressable place in a warehouse where stock is kept, typically coded by zone, aisle, rack, shelf and position.
A code such as A-12-03-B might mean zone A, aisle 12, bay 3, level B. With bin locations recorded, anyone can find any item, and the system can direct putaway and picking efficiently.
Many warehouses separate pick locations, which hold a small, easy-to-reach quantity for picking, from reserve or overflow locations, which hold full pallets. Pick locations are topped up from reserve before they empty, so pickers never have to fetch from high racks during order picking.
Bin location example
Illustrative: a SKU is held in a pick bin at A-04-01-A and overflow pallets at R-20-02-C. Picking always goes to the pick bin, which is replenished from overflow when it runs low.
Why bin location matters for distributors
Without bin locations, stock lives in people's heads. That breaks down as soon as staff change or the range grows, and it makes cycle counting slow.
Common bin location mistakes
- Letting one SKU spread across many unrecorded locations.
- Re-using location codes inconsistently between sites.
Examples on this page use made-up round numbers to show the calculation. They are not benchmarks or results from real businesses.