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Warehouse Management System Software Guide

By
Bradley Johnson
Table of Contents

Successfully managing a warehouse demands timeliness, accuracy, professionalism, and critical thinking. 

Fortunately, a warehouse management system (WMS) takes the burden of manual warehouse operations off your shoulders. Instead of relying on physical counts of inventory, an automated system highlights where and how to make critical business decisions. 

In this guide, we take a close look at warehouse management system software, important differences between types, and provide recommendations.


What Is WMS: What Is Warehouse Management System?

A WMS is an integrated software program that streamlines the intake and output of all physical goods in a warehouse. It acts as an information channel between the touchpoints of your warehouse and those outside of it, including receiving, storage, shipping, returns, and expired or damaged products. 

Warehouse management systems analyze warehouse data, identify inventory gaps, and highlight urgent needs with speed and efficiency. This allows you to view critical numbers at a moment’s notice, all with the goal of improving your warehouse organization and efficiency. 

The WMS is connected to multiple data sources, including your accounting system, back office program, and possibly your online marketplace (if you use one). It uses the information available from those sources as well as new information you provide it to show discrepancies, reveal holding costs, and recommend areas for improvement.

There are numerous reasons all types of eCommerce businesses increasingly depend on warehouse management systems. 

Types Of Warehouse Management Systems

The term “warehouse management system” is often used as a catch-all for eCommerce tools and methods that produce efficient outcomes for warehouses. The type of warehouse management system that best suits your needs depends on the maturity of your business and how much control you want to keep over your operations (see what is warehouse for further reading). 

There are four basic types of warehouse management systems, each of which offers specific advantages based on your needs. Let’s look at the defining characteristics of each type, and how your business can leverage software for maximum productivity. 

Enterprise Resource Planning (ERP) Systems 

Enterprise resource planning, or ERP, systems are a form of “umbrella” software that integrate all stages of your eCommerce business. This includes all the steps from material sourcing to delivering packages to customers. Some, but not all ERP programs offer warehouse management systems. It’s important to do your research before investing in an ERP for this reason. 

Supply Chain Systems

A supply chain management system integrates all stages of operations, from importing raw goods through distribution and customer delivery. Supply chain management (SCM) allows you to monitor and improve areas like third-party relationships, purchasing, and distribution efficiency. 

SCM systems are useful for brands from a number of perspectives. If you want fuller control over your product life cycles, are expanding your operations, or desire improved granularity in reporting, this could be a great choice.  

A warehouse management system is a sub-component of a supply chain management system. This is because your warehouse is only one stage of many in the eCommerce business process. A supply chain system shows you how your product and eCommerce fulfillment cycles are connected. 

Cloud-Based Systems

A cloud-based WMS is software that provides warehouse management functions from a web-based platform. This type of management system is often used by businesses that maintain high-value inventory, have a small warehouse, or want increased data security. Cloud-based WMSs are known for their simple deployment, low costs, and high degree of customizability. 

Standalone Warehouse Management Systems

Standalone systems provide features and reporting for warehouse operations, but not the stages before or after warehousing. A standalone warehouse management system is the simplest form of WMS.

Standalone systems are often used as warehouse inventory management systems because they provide information warehouse workers need on a daily basis. These WMSs are also common in small- to medium-sized businesses that sell more than one SKU number.

Some standalone WMS companies provide integration options for distributors, but this isn’t a guaranteed feature. Before onboarding a standalone WMS, it’s wise to do your own research and ensure their functionalities match your business’s needs. 

Warehouse Management System vs Inventory Management System

At first glance, it’s easy to think warehouse management and inventory management are the same thing. 

In reality, a warehouse management system and inventory management system accomplish two different objectives. Warehouse inventory management software uses present and historical data to efficiently order, receive, and allocate stock. Over time, it reduces the amount of deadstock and any backorder.

A warehouse management system uses data trends to clarify where and how many units of any given stock should be placed. Quality warehouse management systems offer insights on where best-selling and temperature-sensitive products can be placed, too. 

To prevent confusion, you can think of your inventory management system as a building block of your warehouse management system. The inventory management side provides real-time reporting to the warehouse management side. Humans then use this data to initiate or adjust decisions that benefit the business’s profitability. 

Importance of Warehouse Management System

There are multiple reasons why using a warehouse management system is so important. Recent statistics show that as much as 15 to 20% of modern warehouses still do not use a warehouse management system, which is the equivalent of leaving money on the table.

Your WMS software provides real-time numbers of incoming deliveries, inventory, product serial numbers, outbound shipments, and other useful data. 

Tracking Stock and Inventory

The most prominent reason for using a warehouse management system is to track stock and inventory. Stock is any product that’s sold, and inventory is any product that is sold or used in production, but a WMS tracks them both. 

Updating your stock and inventory at the touch of a few buttons is extremely valuable. One, it reduces reliance on a manual inventory audit, which is the process of sending a human to count products on shelves. Two, you can see in real time the speed at which inventory is moving. Three, as soon as you or your team are engaged in putaway, you can move on to greater priorities.

Reducing Expired and Spoiled Products

Robust warehouse management systems won’t merely show you the products in your warehouse; they’ll show you those that have expired or will expire soon. You can use this information to optimize your purchasing decisions and avoid holding slow-moving stock. 

Increasing Daily Efficiency

Due to the volume of product many warehouses store, running manual checks on product availability quickly becomes time-consuming. This is even more true if your warehouse has multiple floors. 

Instead of sending staff members to physically check on low stock or soon-to-expire items, pull up this information in your WMS. The data provided here improves purchasing habits and can highlight areas to change your warehouse management process flow

Preventing Unnecessary Expenses

Another benefit of warehouse management systems is their ability to prevent needless expenses. If your customers are ordering less or more of a given product, your purchasing trends should reflect this. Your WMS will reveal surpluses and shortages of products in your warehouse which you can make relevant decisions on. 

Improving Profitability

In warehousing, profit is strongly correlated with efficient daily workflow and minimal product handling. This means workers can quickly access the products they need when they need them (see what is warehouse work for further reading). A WMS can show you best-selling products, so you can prioritize your storage space around high-frequency orders. 

Role of Warehouse Management System

Warehouse management systems improve the efficiency and profitability of a warehouse. A WMS leverages the information available from your in-house tools, third-party data, and manual inputs. It then provides essential reports that can be used to streamline everything that’s happening in your warehouse. 

Warehouse management ebook

Key Features of Warehouse Management System

You can think of key features of a warehouse management system as fitting into one of two categories: inventory management and order management. 

Inventory management deals with receiving and putaway (sometimes called unloading). A strong WMS supports proper storage, labeling, and accessibility for your inventory. These features should be readily available in any warehouse management system you use. 

Order management deals with picking, packing, and shipping. Returns fall under both inventory and order management, but for the sake of simplicity, we’ll include returns in order management. The order management system within your WMS simplifies the steps that follow an order confirmation. 

Components of a Warehouse Management System

The full component list of a warehouse management system will depend on the company that created it. However, each warehouse management system is designed to offer support and accuracy in at least four areas: receiving, inventory, fulfillment, and shipping. 

Receiving Function

Receiving pertains to everything from scheduling delivery appointments to unloading shipments at the dock. Your warehouse management system should have a module where you can view scheduled appointments, review the type and quantity of incoming goods, verify and print warehouse labels, and create receipts. 

Inventory Management Function

A WMS must offer a thorough, real-time way to track the movement of all goods in your warehouse. The inventory module in your software will show you the date, time, quantity, location, and status of every individual unit. 

While the inventory management function of your WMS is always useful, it’s particularly valuable during seasons of high order volume. Instead of spending time manually reviewing pallets and shelves, refer to your WMS for all critical metrics. 

Order Fulfillment Function

A WMS will also provide an order fulfillment module. Here, you’ll be able to view confirmed orders, demand forecasting, ongoing picking and packing, tracking information, and any errors. 

From a customer-facing perspective, order fulfillment ought to be a top priority. Pay special attention to any patterns seen here, as fulfillment efficiency correlates with high profits and a low returns rate. 

Distribution or Shipping Function

Aside from your product quality and pricing, you need to compete for customers through fast shipping. Customers expect speedy results year-round, so a shipping module is crucial for any warehouse management system. Referring to your WMS for the patterns it detects and making decisions accordingly keeps customers coming back. An example is a backorder, which is when an order has been placed but no current supply exists to fulfill the order.

How to Choose a Warehouse Management System

Choosing a warehouse management system should be approached with mindfulness. You want to select a WMS that meets core needs of your business, including: 

  • Type of product(s) sold
  • Location of business
  • Size of business
  • Growth trends and projected profitability
  • Ease of integration with supply chain and distribution
  • Integration with your existing software and hardware (if applicable)

It's also wise to include your leadership team in conversations about a WMS. Your current warehouse manager may have requests that can help them perform at peak capacity.

If you don't yet have a warehouse manager, it's easier to find one with a quality warehouse manager job description. This should always be complemented with an attractive warehouse manager salary.

If you don’t find a WMS that has all the features you need, don’t be afraid to ask. Sometimes companies only display a portion of their features, or they may be working on beta features. WMS businesses are also often happy to create new features that they think enough of their customers will benefit from. 

Warehouse Management System Software Cost

The cost of any warehouse management system depends on a couple factors.

One, your WMS will offer either a licensing revenue model or recurring model like a subscription box business. Licensing tends to accompany on-site integrations, with subscriptions accompanying cloud-based integrations.

Licensing fees tend to be a little higher than subscription fees, because there’s more to set up and it can take longer. Exact pricing depends on the WMS you’ve selected. On average, businesses pay between $100 to $200 per user per month, with licensing models generally bearing larger costs. 

Two, WMSs with greater functionality, convenience, or integrations tend to command higher prices. It is not unheard of for a WMS to charge anywhere from $300 to $600 per user per month, or $1,000 to $5,000 per facility per month. Naturally, high cost WMSs offer greater convenience, more features, and a robust user experience (UX). 

Top Warehouse Management Systems

There are multiple warehouse management systems that lead the pack in terms of usability, customizability, and scalability. Each software company offers different features and price points.

Depending on the needs of your business, some companies may provide more applicable functions than others. Check out these WMSs that are praised for their flexibility, convenience, and relevance: 

  • Fishbowl Inventory: Focuses on supply chain management consolidation and inventory accuracy; offers multiple popular integrations
  • Suitable for: Small, medium, and large businesses


  • Oracle Warehouse Management: Cloud-based WMS; broad scope of features; offers support for complex fulfillment needs
  • Suitable for: Small, medium, and large businesses


  • Infoplus: Popular WMS with customizable templates for wide range of business types; can easily handle multiple warehouses
  • Suitable for: Small, medium, and large businesses


  • SAP Warehouse Management: Large-scale WMS for all warehouse operations; offers barcode scanners for inventory efficiency
  • Suitable for: Medium and large businesses


  • Manhattan: Mobile-first WMS that leverages advanced AI for numerous processes; aims to optimize productivity for both software and human tasks
  • Suitable for: Small, medium, and large businesses


  • Solochain: Designed to help businesses with multiple warehouse locations; supports labor, yard, and transportation management as well
  • Suitable for: Medium and large businesses

If you’re looking for a particular feature or software compatibility, it’s useful to research further. Even more options on our warehouse management systems list include: 

  • Infor Supply Chain Management
  • JDA WMS
  • HighJump
  • 3PL Central
  • SphereWMS
  • Click Reply
  • Softeon
  • NetSuite WMS
  • Snapfulfil
  • Tecsys
  • Logimax
  • Catalyst WMS
  • Shipedge

Automating Your Way To Success

Warehouse management systems decrease redundancy, lower costs, and maximize profits. Research options to find the best fit for your business, and use it to save time and money on a regular basis.