An inventory management method where the oldest stock is picked and shipped before newer stock.
FIFO (First In, First Out) is an inventory management method where the oldest inventory received is the first to be picked for outbound orders. This is the standard practice for any product with an expiration date (food, supplements, cosmetics, pharmaceuticals) and is also important for fashion brands managing seasonal collections.
In a FIFO system, when a picker receives an order for a specific SKU, the WMS directs them to the bin location containing the oldest lot of that SKU — even if newer stock is physically closer. This requires the WMS to track lot numbers and receipt dates at the individual bin level, not just total quantity.
Failure to enforce FIFO can result in expired products being shipped to customers, regulatory compliance violations (for FDA-regulated categories), and costly product recalls. When evaluating a 3PL for food, supplements, or cosmetics, always verify that their WMS enforces FIFO at the bin level and ask for a demonstration with a test SKU.
The WMS assigns each lot received a date-of-receipt timestamp. When an order is picked for a SKU, the WMS allocates inventory from the earliest receipt date first. Physically, older lots are often stored at accessible pick faces while newer stock is in reserve slots — the WMS manages the put-away logic to maintain this structure.
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