Key E-commerce Warehouse KPIs You Should Be Tracking
Running your own e-commerce warehouse? Let’s be real—between managing staff, shipping deadlines, and endless boxes, it’s easy to miss performance blind spots. But tracking the right KPIs (Key Performance Indicators) helps keep everything on track and scalable.
Here are the benchmarks every warehouse operator should know—plus tips, examples, and visuals to help you put them into action.
Pick Accuracy (Target: 99.5%+)
Your pick accuracy is your quality control checkpoint. It shows how often orders are picked and packed correctly. Unfortunately, it is often not picked up until the customer complains there has been an error.
Formula: (Total Orders – Incorrect Orders) ÷ Total Orders × 100
Why it matters: Mistakes cost money and trust. A high pick accuracy means fewer returns and better customer reviews.
Benchmark:
- Industry average: ~98%
- Top tier: 99.5%+
A few Handy Tips:
- Use barcode scanning tech
- Train with real picking simulations
- Scan individual items on picking as well as on packing
- Audit 1% of daily orders manually
Order Picking Time (Target: <2 minutes/order)
While there will be quite an array of times based on number of picks required for an order, this metric tracks how long it takes to pick items for one order. This matters as speed here means faster order processing and better efficiency.
Benchmark:
- Goal: under 2 minutes/order for small-to-mid-sized SKUs
Key handy tips:
- Organize SKUs by frequency of purchase
- Batch or zone pick
- Keep pick lists digital and mobile-friendly
Fixed Cost Ratio (Target: 20–30%)
Fixed costs are your recurring expenses such as rent, salaries, software, insurance. The ideal goal is to keep these lean without sacrificing quality.
Formula: Fixed Costs ÷ Total Operating Costs × 100
Benchmark:
- Healthy range: 20–30%
A few handy tips:
- Automate tasks like inventory tracking
- Use flex staff during peak seasons
- Lease space just-in-time
Inventory Turnover (Target: 4–6 turns/year)
Your inventory turnover shows how often your inventory sells and refreshes. High turnover means better cash flow and less dust on your shelves. This is a metric that is often overlooked when businesses run their own warehouse. It becomes very visible when moving to a third party logistics warehouse and so it is a good time to review your range prior to a move.
Formula: COGS ÷ Average Inventory Value
Benchmark:
- Sweet spot: 4–6 turns/year
A few handy tips:
- Analyze slow movers quarterly
- Improve demand forecasting
Order Cycle Time (Target: decreasing)
This is the time between when an order is placed and when it leaves your dock. The target previously was under 24 hours however with the increase in eCommerce orders and the like of Amazon FBA, customer expectations are changing.
The best warehouses should be aiming for all orders before 3pm being despatched the same day however your capability will be dependent on your pick up times with the carriers. The minimum for eCommerce should be all orders before 11am being despatched on the same day.
Benchmark:
- Industry leaders: under 6 hours
A few handy tips:
- Auto-prioritize orders in your WMS
- Prep packaging in advance for fast movers
- Negotiate later pick up times with your carriers
Space Utilization (Target: 80–85%)
Space utilization measures how much of your available storage space is actively used. It is difficult for a growing business to manage this metric as I often see them growing out of a new warehouse relatively quickly. It is one of the reasons businesses often look to utilise a 3PL warehouse as it allows them the space to grow but they only pay for the space they use at any one time.
Formula: Storage Used ÷ Total Usable Space × 100
Benchmark:
- Optimal range: 80–85%
- Above 90% can slow you down
A few handy tips:
- Use vertical shelving
- Review racking every 6 months
- Remove obsolete SKUs fast
Final Thoughts
Managing a warehouse is not easy. Tracking KPIs like these gives you more than numbers—it gives you control. And control means faster fulfillment, smarter inventory, and happier customers.
One thing that has worked well for other warehouse owners is that you may want to consider, is to share the metrics with your teams. They often have some great ideas around how your warehouses’ operations could be improved.
