What Is a Bin Location? How to Set Up a Warehouse Bin System for Makers

You know that feeling. You need your apple fragrance, you know you bought it last month, and you spend the next ten minutes opening box after box before finding it wedged behind the lavender on the third shelf. That time adds up. For a maker running a production schedule, it’s genuinely expensive.

That’s the problem bin locations solve.

A bin location system isn’t a “warehouse thing.” It’s just a structured way of assigning every material a permanent address in your storage space. Once everything has a home, you stop searching and start finding.

What is a bin location in inventory management?

A bin location is a physical address assigned to a specific spot in your storage area (a shelf, a drawer, a section of shelving) that tells you exactly where to find or put away an item.

In large warehouses, bin locations are sophisticated systems with barcodes and conveyor belts. For makers and small-batch producers, the concept is the same but the scale is completely different. You might have one room, a few shelves, and fifty fragrance oils. A bin location system still works, and it works well.

The goal isn’t complexity. The goal is that anyone in your workspace (including you, at 6am before your first coffee) can find any material in thirty seconds without thinking about it.

Why bin locations matter for makers

If you’re managing more than twenty or thirty distinct materials, you already know the pain of searching. It gets worse as your range grows. A candle maker might stock forty to sixty fragrance oils, ten waxes, and multiple packaging options. A soap maker managing a seasonal line might have hundreds of ingredients at any given time.

Without a system, you’re relying on memory. Memory is unreliable, especially when you’re tired, distracted, or handing off work to someone else.

Bin locations give you three things:

Reliable findability. You don’t need to remember where something is. You just look it up. Your bin location reference tells you: shelf B, section 3, position 2.

Faster picking. When you’re manufacturing a batch, you work through a list of materials. With bin locations recorded in your inventory software, you can sort your pick list by bin location and move through your storage area efficiently instead of backtracking.

Fewer mistakes. Searching for materials is where substitution errors happen. You grab the wrong fragrance because it looks similar, or use the wrong batch because it was sitting on the wrong shelf. A system reduces this risk significantly.

How to design a bin numbering system

The best bin numbering system is the one your team will actually use consistently. Here’s a simple approach that works well for most maker workshops.

Start with your physical space. Walk your storage area and identify the natural divisions: aisles or rows, shelving units or sections, and individual shelf positions. These become the three levels of your bin location code.

Assign codes to each level. A common pattern is letter-number-number:

• First character: the aisle or row (A, B, C)
• Second character: the shelf or section number (1, 2, 3)
• Third character: the position on that shelf (1, 2, 3)

So a bin marked A-3-2 is located in aisle A, shelf 3, position 2. This level of detail gives you a precise, unmistakable location for every item.

Keep it short. Bin codes that are too long get abbreviated informally by your team, which defeats the purpose. Three to four characters is ideal.

Make it visual. Label your shelves and bins clearly with printed or handwritten labels. The code on the shelf should match exactly what’s in your inventory software.

Document your layout. A simple sketch or spreadsheet showing which bin code corresponds to which physical location is invaluable when someone new joins your team, or when you return from a holiday and your memory is fuzzy.

How to implement a warehouse bin system step by step

Here’s a practical sequence for getting started:

Step 1: Assess your inventory. Group your materials by category (fragrances, waxes, colorants, packaging) and estimate how much space each group needs. This shapes your physical layout before you label anything.

Step 2: Decide your storage structure. Whether you’re using wire shelving, pegboards, drawer units, or a combination: map out your zones before assigning codes. Changing your structure later means reassigning codes, which creates confusion.

Step 3: Label your bins. Use a label maker or print labels for consistency. Adhesive labels on the front edge of each shelf position work well. If your storage is temporary or modular, laminated paper labels with a hook are easier to update.

Step 4: Record bin locations in your inventory system. This is the step that makes the system useful beyond your own memory. Once bin locations are recorded in your inventory software, you can look up where any material is stored without walking to the shelf, and you can give that information to anyone else on your team.

Step 5: Train anyone who uses your storage. A system only works if everyone follows it. Walk through the logic of your bin codes with any team members or helpers. Put-away discipline (returning materials to their assigned bin after use) is the habit that keeps the system working over time.

Bin location labelling best practices for small workshops

Labelling in a small workshop is different from a large warehouse. A few things that make a real difference:

Use consistent label orientation. All labels facing the same direction at the same height makes scanning much faster than hunting for labels at different angles.

Include the material name on the bin, not just the code. In a small workshop, you’ll often locate materials visually before checking a code. Having both the bin code and a short material name on the label (e.g., “A-3-2: Lavender EO”) speeds up the process.

Differentiate materials from finished products. If you store both raw materials and finished goods in the same space, use a visual distinction: different label colors, or a prefix letter (M for materials, P for products). This prevents picking errors where you accidentally grab finished goods for a new batch.

Handle small items differently. Fragrance oils in small bottles, pigment samples, and small hardware all do better in labelled trays or bins than on open shelves. Assign a bin code to the tray, not individual items within it.

Review your layout when you add new materials. If a new fragrance doesn’t fit in the existing A-row because it’s full, don’t just put it anywhere. Create a new bin code and update your records. Consistency is what makes the system trustworthy.

Bin locations for materials vs. finished goods

Most makers think of bin locations primarily for raw materials. But the same system works for finished goods, and there are good reasons to apply it there too.

For materials, bin locations help with:

• Fast picking during manufacturing runs
• Receiving new stock in the right place
• Cycle counts and stocktakes (checking counts location-by-location rather than all at once)

For finished products, bin locations help with:

• Order fulfillment: knowing exactly where to find the right SKU when packing an order
• Preventing over-sells by keeping products in a consistent location (you’re less likely to accidentally double-count or miss a unit)
• Staging finished batches before photography or listing

If you sell across multiple channels (Etsy and Shopify, say, or online and at markets), tracking finished goods by bin location also makes it easier to set aside stock for specific channels without mixing inventory.

The two-bin inventory system

For businesses with smaller product lines or limited storage space, a two-bin system is worth considering. This method uses two designated containers for each material:

• Active bin: the supply you’re actively drawing from
• Reserve bin: the backup stock waiting to be used

When the active bin empties, the reserve bin becomes the new active bin. The empty container becomes the signal to reorder. You only need to order when you see an empty bin, which keeps reorder decisions simple and visual.

The two-bin system works best for:

• Materials with consistent, predictable usage rates
• Items where running out would disrupt production
• Storage situations where visual cues are easier to manage than digital tracking

It’s less suitable for materials with highly variable usage, or for businesses with a large number of SKUs where maintaining two containers per item becomes unwieldy. A maker with sixty fragrance oils and two containers per fragrance is managing 120 physical locations. At that scale, the system might create more work than it saves.

For most growing maker businesses, a digital inventory system with bin locations assigned to each material gives you more flexibility than the physical two-bin approach alone.

Common mistakes when setting up a bin system

Assigning temporary bin codes. It’s tempting to put a new material “somewhere temporary” and add the bin code “later.” Later rarely comes. Discipline yourself to record the bin code in your inventory system the moment you put the material away.

Not maintaining the system after busy periods. If you have a major production run or a busy holiday season, materials often end up back in the wrong places. Build in a short weekly or monthly “put-away reset” to check that materials are back in their assigned locations.

Using bin codes that are too similar. A-1-1 and A-1-2 look alike at a glance, especially on small labels. Consider color-coding sections, or using clearly distinct letters (A vs. C are easily confused; A vs. X less so).

Not updating bin codes when you reorganise. If you move your fragrance shelf to a different location, update your inventory software at the same time. Stale bin location data is worse than no bin location data. It sends people to the wrong place with false confidence.

Tracking Bin Locations with Craftybase

Craftybase supports bin location tracking for both materials and products. You can assign a structured location code to each material in your inventory, making it easy to find stock and generate pick lists that are organised by location.

For makers managing dozens of fragrances, waxes, or other materials across a physical retail location or workshop, bin locations are particularly valuable. Tiana from Winding Wick Candles uses Craftybase’s bin location system in her Texas storefront to quickly locate specific fragrances, eliminating the search time that plagued her spreadsheet days: “I can say, ‘Okay, where is my apple fragrance?’ And it’s really easy to locate.”

Craftybase provides three separate fields for bin location tracking (aisle/row, shelf, and position) so you can use a full three-part location code like A-3-2, or a simpler single-code system if that suits your space better.

You can assign multiple materials to the same bin location (handy if you store several related materials in one container), and bin locations can be set manually or updated in bulk via the material import tool. Once set, your bin location appears on the material detail page and in the hover-over summary window.

If you’re also using QR codes alongside your bin location system, Craftybase works well with QR code-based inventory tracking. Some makers use QR codes on bin labels that link directly to the material record.

For a deeper look at physical labelling strategies that pair well with bin location codes, see our guide to labelling your material inventory locations.

Frequently Asked Questions