Common Warehouse Terms Defined

Common Warehouse Terms Defined

As with any industry, warehousing uses its own special language. Sometimes certain terms are not readily understood by customers new to warehousing services.

When choosing and working with a warehouse for warehousing, distribution, and fulfillment, communication and understanding are critical. Being able to fully understand terms and nomenclature helps you as a customer to know what’s happening and it helps the warehouse to manage and exceed your expectations. The following is a brief glossary of common warehouse terms defined.


Assembly is a service offered whereby the warehouse will take the components of your product and assemble them before shipping them to your customers. An example would be a unique shower head that is screwed onto a standard showerhead assembly piece.


Kitting is a service whereby the warehouse will put together various products into one package and ship them as a set to your customer. A common example would be a boxed set of lotion, bath oil, sponge, and cologne.

Pick and Pack

This is a term that references the process of fulfillment. A worker “picks” the product from the warehouse shelf and it is “packed” into the container it’s to be shipped in.

White Labeling

White labeling is a service whereby a seller offers a product for sale to consumers that the seller did not manufacture or create. The package is delivered to the consumer as white-labeled, which means that the consumer sees the seller’s information and branding instead of the manufacturer or original creator’s logo and information.


A line of products is a group that all share the same UP or SKU. The line is also the name of the work area where products pass by and workers or machines conduct unique tasks on the product as they move across on a conveyor belt or rollers. For instance, a product moves along a line and gets stamped with a label.

Receiving Area

This is a part of the warehouse where incoming merchandise is “received,” or taken into possession. When a product is still in receiving, it has not yet been stored or processed.


A unit is one piece. For example, a pallet of goods will be comprised of multiple units. The collection of goods on a pallet is not one unit. Each piece on the pallet is one unit.


A shortage is created when there is not enough product on hand to fulfill existing orders.


3PL is an acronym that stands for third-party logistics. This is when a business, such as an e-commerce business, uses a third-party company to house, distribute, and fulfill orders. Typically, a business can choose if they want one, two, or all three of these services.


Logistics refers to the organization and movement of goods from one physical location to another. Logistics services can entail everything from picking up goods, receiving shipped goods, managing consumer orders of goods, packing goods, shipping goods, managing customs details, and much more.

Contact American Warehouse

As you can see, there are many unique terms that are specific to the warehousing, distribution, and fulfillment industry. If you’re speaking to one of our representatives and need clarification, don’t hesitate to ask! Open communication is key to successful business relationships. To learn more about how we can help your business, connect with the warehousing experts American Warehouse today.