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Originally published on July 5, 2022

The Role of Shipping Labels in Inventory Management

Shipping labels might seem simple, but they have an integral role to play in warehouse shipping processes. Inventory management and shipping labels go hand in hand, with these labels providing valuable information about the package’s origin, destination, handling requirements and much more. They can direct the package through its journey, allowing employees to work more […]
Person carrying carboard box with a shipping label attached

Shipping labels might seem simple, but they have an integral role to play in warehouse shipping processes. Inventory management and shipping labels go hand in hand, with these labels providing valuable information about the package’s origin, destination, handling requirements and much more. They can direct the package through its journey, allowing employees to work more productively and save the company money — all thanks to the humble shipping label.

While shipping labels often contain a wealth of information, they also have scannable barcodes and tracking data that allow warehouses to quickly track, navigate and manage their inventories. They enable a range of cost-effective processes that also speed up delivery, improve the customer experience and boost accuracy.

What Are Shipping Labels?

A shipping label is designed to get a parcel from point A to point B quickly and efficiently. Every major carrier has its own style of shipping label, but they include similar types of information and generally try to fit as much information as possible into a small space. The ideal shipping label is durable and makes logistics simple with clear, easy-to-scan data.

You’ll typically find the following pieces of data on any shipping label from a major carrier:

  • Destination address
  • Origin/return address
  • Package weight
  • Customer’s contact details
  • Handling instructions
  • Type of shipping service
  • Tracking identifier and barcode

Each of these elements contributes to the speed and quality of the entire handling process, especially if you have multiple shipping options or fragile items. Including these fields on a shipping label allows workers to quickly gather the right information, like whether the postage has been paid or it needs to be sent out ASAP under an expedited service.

When combined with electronic inventory management, a shipping label also plays a key role in linking up a physical product with all of the electronic information that goes with it, like the order number, which product is in the box and other important details.

The Importance of Shipping Labels

Shipping labels are vital because they keep everyone on the same page. They can ensure efficiency across the supply chain and prevent issues, like mishandling packages or harm to your brand image. They’re used in inbound and outbound logistics and can link up with inventory management systems for added value, including increased accuracy and efficiency. Both computers and humans alike can use shipping labels to get packages to their destinations quickly and safely.

Some of the benefits of good shipping label systems include:

  • Higher efficiency: With scannable barcodes and at-a-glance data, employees can more quickly move packages to the next step, helping them reach the customer sooner and limit the amount of time the packages are in your care. Labels create less work for the carrier and provide less room for error, especially when used alongside automated systems.
  • A better customer experience: When customers get their product quickly and in one piece, they’re more likely to have a positive experience with their purchase. Fast, well-handled shipping can be improved with the right labels. Good customer experience can turn into good reviews, stronger customer loyalty and other positive associations with your brand.
  • Accuracy: Barcodes and tracking numbers offer scannability and exceptional visibility. Workers can scan a shipping label and find out exactly where it goes and how to handle it. Shipping labels also ensure that package information is clearly affixed to the package itself, so items don’t get lost or detached from related information. Although you can handwrite shipping labels, they’re less accurate and harder to read.
  • Visibility: Customers can track their packages and companies can combine labels with inventory management systems to monitor locations and movements across a facility. Simply put, shipping labels can provide exceptional visibility for packages. While smaller businesses might be able to get by without them, high-volume operations rely on strong labeling to get things done.
  • Branding: If you’re trying to make your brand image stand out, custom shipping labels can help. They allow you to put your own spin on the labels with special fonts, logos and designs to make brands look more professional and memorable.
  • Better handling: Shipping labels include special information about handling and can prevent damage to fragile items. For example, you might see fragile labels, arrows or “dangerous goods” data on a shipping label. These notifications can help ensure the package reaches its destination intact.

In short, shipping labels have a wide-reaching effect on many different parts of inventory management. They’re a powerful tool to have in your arsenal, especially if you use them to their fullest potential.

Shipping Labels in Inventory Management

Shipping labels are used for many purposes across the package’s journey, but they can be especially helpful during inventory management. As packages move through a facility, warehouse shipping labels can help you retain visibility, use productivity-boosting technology and handle items with more accuracy. Let’s take a look at the role of shipping labels in warehouses.

Generating and Printing

Your two main options for creating shipping labels is generating them through the carrier website or a platform that connects with all major carriers. If you work with a third-party logistics (3PL) provider, they might take care of this step. Creating the labels through the shipping provider might work for very small operations, but it calls for more time-consuming manual processes. The most efficient option is to use a program that allows you to compare prices across shipping providers, buy postage and generate your label from one place.

Remember, generating a label isn’t the same as paying for it. A label is free — you can even handwrite them — but postage is not, and it’s usually cheaper to buy labels in bulk. You’ll need to complete both steps before trying to send off a package.

Shipping labels can vary widely in their appearance and durability. Some factors to consider include:

  • Materials: A label might be paper-based or film-based. Although paper-based labels come in various styles and attractive appearances, they aren’t as durable or water-resistant as film-based labels. These labels use plastic materials and can resist moisture, high temperatures, ultraviolet light, friction and even some chemicals. Film-based labels are more expensive and provide less branding opportunity, but they’re the most rugged.
  • Label sizes: Labels are printed on sheets that come in a range of sizes, including letter, legal, tabloid, A4 and A3. Some require special printers, so you’ll need to make sure you have the right printer for your desired label size.
  • Printers: Inkjet printers are the most basic option, with lower quality that isn’t suitable for smaller QR codes or barcodes. It’s also the slowest and cheapest option. A laser printer moves a step up and can offer faster performance, but it may be more limited in the type of labels it works with, like peel-and-stick. Thermal printing is the best option for high-volume, high-accuracy printing. These printers are fast and great for bulk printing. They’re usually built for specific label sizes and can accommodate peel-and-stick labels.

Placement

Placing your inventory management shipping labels on the packaging can be easier said than done. If they aren’t well-placed, the items could get lost in shipping, leading to revenue loss and customer disappointment. To avoid placement issues, your label should:

  • Lay flat on one side of the packaging: Don’t let it wrap around the edges. Barcode scanners and people can more easily read a label that lies flat against the packaging.
  • Be secured: If needed, use clear tape designed for packaging over top of your label. Tape can keep your label nice and secure, but it can also wrinkle and create reflections and glares. A better option is to use self-adhesive labels. They’re easier and faster to apply and generally don’t require any tape. The label’s barcode can sit front and center for easy scanning.
  • Stay intact: You don’t need the highest-quality labels out there, but you do need to make sure they’ll stay intact throughout transit and after the customer receives the item. For example, you won’t want to place the label on the seam of the box. If it breaks during opening, the customer might not be able to retrieve information needed for returns, such as their order number. If the label is destroyed during shipping, the entire package could get lost and you’ll be paying for the replacement.
  • Be in a good spot: If your box has a designated space for a label, that’s usually your best bet. In general, you can place a label anywhere, as long as it is not obstructed. If you’ll be using your shipping label alongside other scannable labels, like product barcodes or placement identifiers, you may want to provide some distance so they don’t interfere with each others’ scanning. A worker trying to scan a shipping label, for example, might end up scanning a product barcode if they’re too close together.
  • Face the right direction: Do you store your packages a certain way? Consider placing your shipping labels in a spot where they’ll be readable without needing to move the box so you can speed up the scanning process. For example, if you have stacks of boxes with the ends facing into your warehouse aisles, placing shipping labels there can help workers access them without needing to climb up, shift and turn the boxes.
  • List any special concerns: If your items require special handling, you might want to place some additional labels on the packaging, like a “fragile” or “perishable” sticker.

Shipping labels in inventory management can be a key part of locating products and maintaining high visibility. You can link shipping labels to your inventory management system and gain precise insights into where items are. This makes it easy to oversee product movements and helps workers know exactly where they’re going. Warehouses can be vast, so navigation is key to helping employees locate items quickly and easily. They shouldn’t need to roam the aisles or get lost looking for a package.

For example, QR codes and shipping labels make excellent partners. You can use QR codes as warehouse labels, placing them on your shelves, floors or walls — anywhere you desire. Plus, they work with scanners and smartphones alike. Workers might scan a QR code to assign a package to a specific shelf or view what packages are currently held there. After all, they can’t see through boxes, so warehouse labeling is a way to link up a physical location with the data in your inventory management system.

QR codes and barcodes are easy to generate and print through Finale Inventory, allowing you to easily track items throughout the facility and pair them with shipping labels.

However you choose to locate packages, shipping labels can be a particularly useful tool for reducing errors and auditing. Every time a package moves, it can be scanned. If a package moves from Bay 1 to Bay 14, you have a clear and easy-to-follow record of that movement and real-time visibility into its location. This level of visibility can also help with auditing, allowing you to more accurately understand what you have and where. It even allows customers to see where their items are and can improve their experience.

Handling

You might have a range of information associated with your items, like special handling requirements or labels for international shipping demands. Shipping labels can contain this data and make workers more likely to treat the items correctly and move them through the process efficiently. These minor details can add value, helping customers receive intact, well-presented items and creating less work for shipping carriers.

Choosing Finale Inventory

Finale Inventory is a comprehensive, cloud-based inventory management solution that works right alongside your shipping labels. Robust barcode scanning solutions make it easy and quick to receive shipments, track items and record movement. With QR codes and barcode label printing, you can generate labels for easy tracking throughout your facility. Add them to packages to include more information or use rack labels for shelving and locating specific products.

Finale Inventory simplifies the entire process and allows you to work with shipping labels of all styles, with superior real-time visibility wherever your packages go. Work more productively, save on costs, eliminate paperwork and speed up training with the help of our easy-to-use interface and powerful features.

Alongside scanning and label generation, Finale Inventory can help with a variety of other inventory management tasks, like stock audits, purchasing and replenishing, order picking, returns management and even accounting. The platform integrates with many popular programs you might already use, like shipping programs, marketplaces, point-of-sale systems and accounting software.

With the help of the cloud, Finale Inventory is accessible from anywhere you have an internet connection, offering flexibility and security. You can use a web browser or our intuitive app to get to your data and rest easy knowing that your records are kept safe.

Contact Us Today

Our goal at Finale Inventory is to ensure smooth operations for our clients and partners. We aim to help you move your business forward and boost your customers’ experiences through reliable inventory management and the technology you need to expand your capabilities. We work with businesses of all sizes, from small businesses to Fortune 500 companies. Whether your focus is e-commerce or you partner with hundreds of brick-and-mortar locations, our highly customizable inventory management system can help you further your work.

Our services include free onboarding, training and support, so you can confidently use Finale Inventory to its fullest extent. To learn more about Finale, please reach out to an expert today!

“The core of maturity, that I see, is starting with a unified view of inventory. I’ve got to be able to accurately represent what do I have, make sure that I know where it’s located so I can get it to my customers quickly.”

— Troy Graham, Descartes

What is the first thing I should fix if I want to scale operations?

Start with a unified view of inventory. The core of maturity starts with being able to accurately represent what you do have and make sure that you know where it’s located to get it to customers quickly. Without a unified view across your warehouses, 3PLs, and vendors, you cannot make the best decisions because you don’t have the best information at hand.

With Inventory Visibility, Businesses Can Make Smarter Allocation Decisions

Once inventory is centralized, businesses can move from reactive updates to intentional allocation. They can decide how much inventory to expose to each channel, when to use buffers, which marketplaces need extra protection, and how seasonality or campaign performance influence availability.

Once I know what inventory I have, how should I decide where to make it available?

Inventory allocation should reflect where orders are coming from, where marketing is working, and which channels carry the most risk. Once you know what you have and where it is located, you can think more strategically using centralized inventory to make prioritization happen automatically. One fertilizer company lost a little over 5,000 orders in one weekend because someone manually uploaded the wrong available inventory to Amazon.

Better Inventory Data Improves Planning, Purchasing, and Growth Bets

Better visibility turns inventory data into a planning tool. With insight into sales velocity, inventory levels, vendors, and channel performance, businesses can make more informed replenishment decisions, avoid overbuying, and test new product lines or vendor-supplied inventory without taking on unnecessary risk.

“You have to have unified inventory to know how to price your products just at that basic level. I can’t price my products if I don’t know the true cost to get it.”

— Mike Bernico, Flxpoint

How does better inventory data help me make smarter buying decisions?

It lets you measure whether your plan is working before you commit more capital. A key question becomes: “Did my plan work? Am I overleveraged in one place or another?” Centralized systems can also help businesses test new product lines or vendor relationships by looking at sales velocity by channel, allowing them to take risks in a calculated and measured way.

Intelligent Order Routing Turns Inventory Complexity Into Automation

Once inventory and supplier data are reliable, businesses can automate fulfillment decisions. Orders can be routed based on cost, speed, margin, location, warehouse priority, vendor fallback, split-shipment rules, or customer expectations. This helps hybrid fulfillment scale because every order does not need a manual review.

How do I decide the best way to fulfill each order?

There is no single answer, which is why order routing needs to account for the context of each order. Intelligent order routing is not just sending an order to someone who has stock; it is taking each and every order and treating it like its own unique use case. Depending on the order, the business may prioritize speed, margin, an internal warehouse, vendor fallback, or preventing split shipments.

Supplier Inventory Sync Extends Inventory Beyond the Four Walls

For hybrid fulfillment to work, supplier inventory needs to become part of the operating model. Supplier sync does not always require advanced technology; it can happen through automated files, FTP, email, APIs, EDI, or ecommerce storefront integrations. The key is replacing manual updates with automated, reliable supplier data.

Can supplier inventory really be treated like part of my own inventory?

Yes, but the goal is not necessarily to force every supplier into a complex integration. Real-time supplier sync can be defined as any way to get an automated update from a supplier, such as Google Sheets, email, FTP, API, EDI, or ecommerce storefront connections. The key is that accurate supplier stock is foundational. If you don’t have an accurate view of what is in stock with your suppliers, you cannot tell your sales channel accurately what’s available.

Exception-Based Workflows Keep Humans Focused Where They Matter

Automation does not remove people from the process. Mature operations let technology handle the routine majority while humans focus on exceptions, such as high-value orders, fraud risk, compliance requirements, restricted products, export rules, or unusual fulfillment scenarios.

If my business has special cases, can automation still work?

Yes. The point is not to automate every possible decision; it is to automate the routine work and surface the exceptions. Businesses should not have to look at every single order. Instead, technology can highlight high-value orders, risky locations, or compliance requirements. The goal is to take care of the 80% of workflows that are obvious while still allowing human review when specific exceptions arise.

The Right Inventory Technology Should Fit the Business, Not Overwhelm It

Software decisions should be based on business fit, not popularity, feature volume, or broad “all-in-one” promises. Growing ecommerce businesses should identify their highest-impact bottleneck, prioritize what matters now, and choose technology that is right-sized but flexible enough to support future phases of growth.

How should I choose software without overbuying or picking the wrong system?

Start with your priorities, not the biggest feature list. Avoid an all-in-one system that claims to “do everything under the sun” and look for a “best of breed approach” with systems that can scale as you add channels or vendors. The practical advice is to stack rank what matters now, make sure the system can support future phases, and choose technology that fits your business rather than overwhelming it.

How to Scale Ecommerce Operations Beyond Spreadsheets

For many growing ecommerce businesses, Finale and Flxpoint work together as a practical answer to these challenges. Finale helps centralize and manage internal inventory, purchasing, warehouse operations, and stock visibility, while Flxpoint helps connect vendor inventory, automate supplier sync, and route orders across hybrid fulfillment networks. Together, they give businesses a best-of-breed way to improve inventory accuracy, reduce spreadsheet work, and scale fulfillment without forcing every process into a one-size-fits-all system.

Ecommerce Fulfillment Operations FAQ

What Is Ecommerce Fulfillment Operations?

Ecommerce fulfillment operations are the processes that move an online order from purchase to delivery. This includes managing inventory, syncing product availability across channels, routing orders to the right warehouse, 3PL, supplier, or vendor, and making sure the customer receives the right product on time. As discussed in the webinar, fulfillment is no longer limited to “what’s in my warehouse these days”; growing businesses may rely on internal warehouses, 3PLs, marketplace fulfillment services, and supplier inventory at the same time.

What Are Ecommerce Fulfillment Operation Examples?

Examples of ecommerce fulfillment operations include updating inventory across Shopify, Amazon, Walmart, and other sales channels; allocating inventory to specific marketplaces; sending orders to an internal warehouse, 3PL, or vendor; syncing supplier inventory through files, APIs, EDI, email, or FTP; replenishing warehouse stock based on sales velocity; and flagging exceptions such as high-value orders, compliance requirements, or restricted products. In the webinar, the speakers also discussed hybrid fulfillment examples where a business may fulfill some products from its own warehouse and use vendors as a fallback or extension of available inventory.

How Can I Track My Inventory at an Ecommerce Fulfillment Center?

The best way to track inventory at an ecommerce fulfillment center is to create a unified inventory view that shows what is available, where it is located, and how that inventory connects to each sales channel. That means tracking inventory across internal warehouses, fulfillment centers, 3PLs, marketplace fulfillment programs, and supplier locations instead of relying on disconnected spreadsheets. The webinar emphasized that businesses need to “accurately represent” what they have and know where it is located so they can get products to customers quickly.

How Can I Connect My Inventory to My Supplier?

You can connect supplier inventory through several methods, depending on what the supplier supports. The webinar discussed low-tech and advanced options, including automated Excel or CSV files, Google Sheets, email updates, FTP servers, APIs, EDI, and direct connections to ecommerce storefronts such as Shopify, BigCommerce, or Magento. The key is to ask suppliers how they share inventory today, then use a system that can automate that data flow instead of manually copying supplier inventory into spreadsheets.

What Is Ecommerce Order Routing?

Ecommerce order routing is the process of deciding where an order is fulfilled from after a customer buys. In a simple operation, every order may go to one warehouse. In a more complex or hybrid fulfillment model, the best fulfillment source may depend on inventory availability, shipping speed, cost, margin, customer location, warehouse priority, vendor fallback rules, or whether the order should be split. The webinar described intelligent order routing as treating each order like its own use case, so businesses can automate the best fulfillment decision without manually reviewing every order.

Ready to Take Control of Your Inventory?

Improve inventory, warehouse, and ecommerce operations today.

Request a Demo

Ready to Take Control of Your Inventory?

Improve inventory, warehouse, and ecommerce operations today.

Request a Demo

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