How to Create an Inventory Location Naming System for Your Handmade Business
If you spend more time hunting for materials than actually making things, a location naming system will fix that. Here's how to build one that works for a home studio or small workshop.
Half your time searching for a specific material. An order sitting on the workbench. You know you have the red embroidery thread (you bought two spools of it last month). But where is it?
If that sounds familiar, you’re not alone. Makers who are gaining traction often hit this exact wall. And the fix isn’t expensive storage furniture or a full warehouse system. It’s a simple, consistent location naming system applied to every material and product you stock.
This is how small workshops and even large warehouse operations solve the same problem. The principles scale down beautifully.
Why does an inventory location system matter for makers?
A location system tells you exactly where each material lives. Not approximately. Not “probably the third shelf on the right.” Exactly. And it tells anyone helping you, too.
When you’re the only person in your business, you can get by on memory for a while. But memory fails as your inventory grows. You add new materials, rearrange storage, take on an assistant for busy season, or simply return from a craft fair to find everything jumbled. A named location system removes the guesswork for everyone who touches your stock.
There’s also a less obvious benefit: it makes inventory tracking far more accurate. When you know where things are, you can count them properly. When you can count them properly, your stock levels are reliable. And when your stock levels are reliable, you stop running out of materials mid-order.
The three principles of a good location naming system
Before picking codes and labels, it helps to understand what makes a naming system actually work.
Uniqueness
Each location name needs to be completely unique. No two spots should share the same code. When you read a code, you should be able to picture the exact physical place in your mind without any ambiguity.
This sounds obvious until you try to name 40 different spots in a spare bedroom. Suddenly “shelf 1” and “shelf one” and “first shelf” all feel equivalent. They’re not. Pick one format and stick with it.
Static locations
Name the place, not the thing stored there.
If your glass jars live in a clear plastic tub that you sometimes move around, don’t name the tub. Name the shelf where the tub should live. The location is fixed; the container isn’t.
This matters because your location codes become part of your materials records. If the location moves, you’d need to update every record that references it. But a fixed physical spot (a shelf, a section of shelving, a drawer) never changes, even if the contents do.
Consistency
Apply location codes to everything, not just the materials you use most often. An incomplete location system creates exactly the same problem you started with: “I know most things have a code, but this one doesn’t, so I’ll just remember where it is.” You won’t.
The three-part location code system
Most warehouse systems use a multi-part code that you read left-to-right to narrow down where something is. Big operations might use warehouse number, aisle, bay, and shelf: four or five levels deep.
For a maker’s home studio or small workshop, three parts is usually enough: Zone, Section, Position.
Here’s what each one means.
Zone is the broad area. This might be a room, a side of a room, or a distinct storage structure. Your garage could be one zone; your dedicated craft room another. Label zones with a letter (G for garage, W for workshop), a color, or a simple number. Keep it short.
Section is the major subdivision within a zone. A bookshelf is a section. A large storage cabinet is a section. A rolling cart with multiple tiers is a section. Use a number or letter here too.
Position is the specific slot within a section, your most granular level: a shelf level, a drawer, a specific bin slot. Number them top-to-bottom or left-to-right. Just be consistent.
You write these as ZONE-SECTION-POSITION, separated by hyphens.
Let’s say you store your candle dye blocks in a box on the third shelf of the storage unit in your workshop. The code might be: W-S3-04.
- W = workshop (zone)
- S3 = storage unit, shelf 3 (section)
- 04 = position 4 along that shelf (position)
If you’ve ever picked up flat-pack furniture from an Ikea warehouse floor, you’ve used this system. They give you the aisle and bay number, and you walk to the exact spot. Same idea, smaller scale.
The beauty of this system is that it works whether you have 20 materials or 200. You can always add more positions within a section, more sections within a zone, or more zones as your space grows. Nothing that already has a code needs to change.
How to build your system from scratch
Start by walking your storage space and sketching a rough map. You’re not designing anything yet. Just getting a sense of how many zones you actually have.
Step 1: Identify your zones. List every distinct area where you store materials or finished products. If you work from a single room, you might only have one zone, or you might divide by wall (North, South) or by purpose (materials side, finished goods side). Write down the letters or short codes you’ll use for each.
Step 2: Number your sections within each zone. Within each zone, number the shelving units, storage containers, or dedicated areas. Keep it simple: S1, S2, S3 for three shelving units in a zone. If you’re labelling a single bookshelf, the bookshelf itself might be the section and each shelf level a position.
Step 3: Number positions within each section. Count the positions. A shelf with six spots gets positions 01 through 06. A drawer unit with five drawers gets 01 through 05. Starting with a leading zero (01 rather than 1) keeps your codes neat when you have more than nine spots.
Step 4: Assign codes to every material. Go through your inventory and give each material its location code. This is a one-off task. Once it’s done, you only need to update a code when something physically moves.
For a small inventory of 30-50 materials, this might take an hour or two. Worth every minute.
Labelling your locations
The code system only works if the physical spots are clearly labelled. Codes in a spreadsheet that don’t match anything visible in your workspace just create a different kind of confusion.
For zones, a simple A4-size label attached to a wall or door is usually enough. You just need something that clearly indicates which zone you’re in when you enter the space.
For sections, label the shelf unit, container, or area with its section code. Most makers use printed labels in a consistent format (matching size, font, and placement) so they’re easy to scan at a glance.
For positions, label each individual spot at the bottom or front edge of the space, with a small upward-pointing arrow if there’s any doubt about which position the label refers to. Most warehouse shelving uses this convention.
One practical tip: don’t rely on color-coding alone as your only differentiation, especially if you have staff or plan to. Color vision varies, and a label that’s clear in good lighting can be hard to read in a dim storage area.
Recording locations in your inventory software
A location naming system is only useful if you can look up where things are without physically searching. That means recording each location code alongside the material or product in your inventory software.
Craftybase has a built-in bin locations feature that lets you assign a location code to each material and product. When you view any item, you can see its location code immediately. When you add a new material to your stock, you record which location it belongs to.
This means you can search for a material, see its code (say, W-S3-04), and go directly to that spot. No guessing. No searching. And if you run a cycle count or stocktake, your location codes make it straightforward to work through your stock systematically: count zone by zone, section by section, rather than bouncing all over your storage space.
It also solves the problem of onboarding help. When you bring someone in to pick and pack during a busy period, you don’t need to walk them through where everything lives. The location codes do that for you.
A simple example: single-room home studio
Not everyone has a separate workshop or multiple storage areas. If you work from a home office or a spare room with a few shelving units, here’s how this might look in practice.
Say you have one room (zone: R) with three IKEA Kallax units (sections: K1, K2, K3), each with four rows and two columns of cubbies (positions: Row 1 Left = 1L, Row 1 Right = 1R, and so on).
Your washi tape collection lives in the bottom-right cubby of the second Kallax. That’s: R-K2-4R.
Your adhesive foam sheets are on the top-left cubby of the first Kallax: R-K1-1L.
Total setup time for a system like this: a couple of hours for the initial labelling, then a few minutes per week to keep it current.
Frequently Asked Questions
Why do I need a location naming system if I work alone?
Memory works fine for a small inventory. Past 30-40 items, or after a busy craft show where everything gets shuffled around, the time spent hunting for things adds up fast. A location system also makes stocktaking far quicker, since you can count zone by zone rather than searching through every drawer. Most makers who set one up say they wished they'd done it earlier.
What if I only have one room for my handmade inventory storage?
A single-room studio works fine with the three-part system. Your zone is just a single letter (R for room, or S for studio), and you focus most of your effort on sections and positions. You might have four shelf units (S1 through S4) each with six shelf levels (01 through 06). That gives you 24 distinct, codeable spots without needing multiple zones. As long as each position has a unique code, the system works exactly the same way.
How does Craftybase help me track inventory locations?
Craftybase has a built-in bin locations feature that lets you assign a location code to each material and finished product. Once set up, you can look up any item and see its code immediately, with no spreadsheet needed. It also makes stocktaking faster, because you can pull a location report and count in order through your storage space rather than jumping around. If you have staff helping with pick-and-pack, the location codes in Craftybase give them everything they need without a verbal walkthrough.
How do I decide on zone and section codes for my inventory location system?
Use codes that are short, distinct, and connected to something physical. A letter that relates to the room or area works well (G for garage, W for workshop, S for studio). For sections, number them sequentially from one end of the zone to the other. The key is consistency: once you pick a format, use it everywhere. Mixing letters and numbers in unpredictable ways (like Z1 for one zone and B-TWO for another) defeats the purpose.
Do I need to relabel everything when I rearrange my storage space?
Only if the physical locations themselves change. If you move your adhesive from position 03 to position 07, you update the location code in your records, not the labels on the spots themselves. The locations stay fixed; what's stored there changes. This is why naming fixed physical spots (shelves, drawers, cubbies) rather than containers or bins is the right approach. It minimises how often you need to relabel anything.
Getting started
The best time to set up a location system is before your inventory gets out of hand. The second best time is now.
Start with a 30-minute walk-through of your storage space. Sketch your zones, count your sections, and assign codes to each position. Print and attach labels (a basic label maker or printed stickers work fine). Then go through your materials list and update each entry with its new code.
If you’re using Craftybase, you can add location codes to each material record directly. From there, every time you do a stock adjustment or stocktake, you’ll be working with real location data rather than memory.
It takes a couple of hours to set up. It saves that time back many times over. That’s a trade most makers are glad they made.
Ready to put your location system to work? Start your free Craftybase trial and try the bin locations feature alongside your new naming system.
