Solution
For brands shipping from more than one warehouse
Updated 2 min read
The short answer
Once stock sits in more than one location, availability stops being a single number and becomes an allocation decision. Multi-warehouse order management needs per-location stock, a rule for which warehouse serves each order, tracked inter-warehouse transfers, per-location cycle counts, and invoice series that respect where the goods actually shipped from.
- Availability = sum across locations, but fulfilment is per location
- Allocation rules: nearest, cheapest, most stock, or a fixed priority
- Transfers must be tracked as in-transit stock, not deducted and re-added
- Place of supply for GST depends on where goods move from and to
Allocation is the new decision
With one warehouse, an order is simply fulfilled. With two, something has to choose — and the choice has real money in it, because it decides shipping cost, delivery time and which location runs out first.
- Nearest to customer
- Cheapest shipping and fastest delivery. Best default for most sellers, and the one marketplaces' SLAs reward.
- Most stock
- Keeps locations balanced and reduces transfers, at the cost of some shipping spend.
- Fixed priority
- Simple and predictable: always ship from A unless it is empty. Sensible when one location is genuinely primary.
- Split shipment
- Fulfil a multi-item order from two locations. Sometimes necessary, always more expensive — make it a deliberate exception.
Transfers are stock, not a gap
The common mistake is to deduct from the source warehouse when goods leave and add to the destination when they arrive, treating the days in between as nothing. Those units exist, and if the system cannot see them, planning breaks and reconciliation becomes guesswork. Track transfers as in-transit stock with a source, a destination and a quantity.
The compliance detail people miss
Where goods ship from affects the tax treatment. A warehouse in another state usually means a separate GST registration for that state, and the place-of-supply determination that decides CGST-plus-SGST versus IGST depends on the actual movement, not on your head-office address. Get this designed before you open the second location, not after.
Frequently asked questions
How does an OMS decide which warehouse ships an order?
By an allocation rule you configure — commonly nearest to the customer, the location with the most stock, or a fixed priority order. Nearest-to-customer is the usual default because it minimises shipping cost and best supports marketplace delivery SLAs.
How should stock transfers between warehouses be recorded?
As in-transit stock with a source, destination and quantity — not as a deduction at dispatch and an addition on arrival. Units in transit still exist, and hiding them breaks both planning and reconciliation.
Do I need a separate GST registration for a warehouse in another state?
Generally yes — holding and supplying goods from another state usually requires registration in that state. Because the details depend on your arrangement, confirm the position with your CA before opening the location.