WMS system: what it is, what it does and when you need one

A WMS system (warehouse management system) is software that runs a warehouse: it knows where every product is, how many there are and which order should be picked next. Your webshop sells; the WMS makes sure the right products end up in the right box.

A WMS is not the same as your webshop software or your shipping software. Shopify or WooCommerce keeps track of how much you can sell. Sendcloud or MyParcel creates labels. The WMS sits in between and handles everything that happens inside the warehouse.

What does a WMS system do?

Locations

Every product gets a fixed location: aisle, rack, shelf. When stock arrives, you scan the box and the WMS tells you where it goes. That way even a new member of staff can find everything.

Order picking

The WMS creates pick lists, often in a walking route through the warehouse. With lots of small orders you pick several orders at once (batch picking) and pack them one by one afterwards. A scanner or phone checks every product against its barcode (EAN), so the wrong size or colour doesn't go in the box.

Stock

The WMS knows what is on each location, what is already reserved for open orders and what is still on its way. For products with a best-before date or batch number, it tracks what has to go out first (FIFO or FEFO). Counts and corrections are logged, so you can see where stock goes missing. How to approach that is covered in stock management for your webshop.

Integrations

A WMS pulls in orders from your webshop and marketplaces (Shopify, WooCommerce, Magento, Lightspeed, bol, Amazon) and sends stock levels and tracking back. It creates shipping labels, directly with the carrier or through shipping software. Without good integrations you end up retyping orders anyway.

Client portal

At a fulfilment company, one WMS runs for many webshops at once. Through a client portal you see only your own stock, orders, inbound deliveries and returns, and you announce new deliveries.

When does your webshop need its own WMS?

As long as everything fits in one cupboard and you pack yourself, the stock function in your webshop software is often enough. Your own WMS starts to make sense when:

• you have hundreds of products or variants and searching takes time;
• more people than just you are packing;
• you sell on several channels and stock has to be right everywhere;
• mistakes (wrong size, missing item) cause returns and complaints;
• you work with best-before dates, batches or serial numbers.

Expect more than a monthly fee, though. Setting it up takes time, you need scanners, and it takes discipline: every movement has to be scanned, or the stock figures won't match.

Your own WMS or outsourcing to a fulfilment company?

There are two routes. You run a warehouse yourself with a WMS, or you outsource to a fulfilment company that already has one.

	Own warehouse with a WMS	Fulfilment company with its WMS
Software	You choose, pay for and set it up	Part of the service; you get a portal
Space and staff	You rent and you plan	Their warehouse, their staff
Integrations	You connect your channels to the WMS	You connect your channels to the fulfilment company
Costs	Licence, hardware, hours	Per order, storage and shipping
Control	Full	Through the portal and agreements

Your own WMS mainly pays off if you have, or want to keep, a warehouse with staff. If you outsource, you don't need to buy a WMS: the fulfilment company already has one. What you do want to know is whether their system talks to your channels, and what you can see in the portal. Not sure what kind of partner you're looking for? Read what a 3PL is first.

Which WMS do fulfilment companies use?

We track 207 active fulfilment companies in the Netherlands and Belgium. 31 of them say on their own website which WMS they use:

WMS	Companies naming it	View
Own system	10	list
Picqer	8	list
ChannelDock	5	list
Monta WMS	2	list
QLS	2	list
Odoo	2	list
GoedGepickt	1	list

The other companies don't mention it. That doesn't mean they have no WMS; it just isn't on their site. So simply ask when you request a quote.

What does the choice tell you? An in-house system can be tailored exactly to how the company works, but then the company also maintains the integrations itself. A standard package comes with a fixed set of ready-made integrations that the vendor keeps up to date. Neither is always better. What matters more is whether your channels connect to it. Of the 207 companies, 110 mention a Shopify integration, 103 WooCommerce and 100 bol. And 131 mention a client portal.

Ask every candidate which WMS they run, which integrations are ready-made and what you see in the portal. The checklist of 12 questions helps.

Frequently asked questions

What does WMS stand for?

WMS stands for warehouse management system. It is software for everything that happens in a warehouse: inbound, storage, picking, packing and shipping.

What is the difference between a WMS and an ERP?

An ERP runs your whole business: purchasing, sales, invoicing and accounting. A WMS is about the warehouse floor: locations, picking and counting. Some ERPs, such as Odoo, have a warehouse module. Busy warehouses often run a separate WMS alongside the ERP.

Do I need a WMS if I outsource fulfilment?

No. The fulfilment company has a WMS and you work through their portal or integration. Your webshop remains the place where you manage products and prices.

How do I find a fulfilment company that suits my webshop?

How orders move through a warehouse: pick and pack and cut-off time.

Filter the list of fulfilment companies by WMS, integration or service. Or connect your webshop and see, based on your own orders, which companies fit and roughly what it costs. Start your match.