What is the full form of FIFO and FEFO?

FIFO stands for first in, first out: the stock that arrived first is shipped first. FEFO stands for first expired, first out (sometimes "first expiry, first out"): the stock with the nearest expiry date is shipped first, regardless of when it arrived. Both are stock rotation rules used in warehouses to decide which units leave first.

FIFO vs FEFO: what is the difference, and when is FEFO required?

FIFO looks at arrival date; FEFO looks at expiry date. They differ only when a newer batch expires sooner than an older one. Use FEFO for anything with a shelf life: food, beverages, cosmetics, supplements and medicines. Indian food labels must carry expiry or use-by dates, so the data FEFO needs is printed on the pack.

Is FIFO in a warehouse the same as FIFO in accounting?

No. Accounting FIFO is a valuation method: it assumes the oldest costs are used first when calculating cost of goods sold. Warehouse FIFO is a physical rule about which units are picked. A business can value stock on one method and rotate it on another. Search results often mix the two, so check which one a source means.

How are FIFO and FEFO used in pharmacy and the food industry?

Pharmacies and food businesses use FEFO, because expiry, not arrival, decides whether a unit can be sold. Every batch is received with its expiry date, stored so batches stay separate, and picked earliest-expiry first. Short-dated stock is flagged before it reaches the cut-off a buyer or retailer will accept, so it can be sold, moved or written off.

How do you implement FEFO in a warehouse?

Capture the batch and expiry of every unit on the GRN, keep one batch per bin or record the batch per bin, and let the system choose the batch when it allocates stock to an order. Then confirm the batch with a scan at the pick, and run a near-expiry report weekly so short-dated stock is dealt with early.

FIFO vs LIFO in warehouse management: which applies to ecommerce?

FIFO, almost always. LIFO (last in, first out) ships the newest stock first, which leaves older units ageing at the back of the shelf. That is rarely acceptable for consumer products, which can date, fade or go out of season. Ecommerce brands use FIFO for undated products and FEFO for anything with an expiry date.

What happens if expired or short-dated stock is shipped to a marketplace?

Expect rejections and cost. Where a marketplace or quick-commerce buyer sets a shelf-life requirement, stock that misses it can be refused at inbound, and you may pay freight both ways, plus the cost of stock that may then be too short-dated to sell anywhere. Check each platform's current shelf-life rule in its seller or vendor help, and use FEFO to pick the batch you send.

What are FIFO and FEFO?

FIFO (first in, first out) and FEFO (first expired, first out) are rules for which stock leaves a warehouse first. FIFO ships the units that arrived earliest. FEFO ships the units with the nearest expiry date, whenever they arrived. Brands selling food, cosmetics, supplements or medicines usually run FEFO; most other products run FIFO.

In accounting, FIFO is also a method for valuing inventory. This page covers the warehouse meaning: the physical order in which stock is picked and shipped.

How FIFO and FEFO work in an Indian D2C or omnichannel warehouse

Both rules decide one thing: when an order needs a SKU that sits in more than one batch or bin, which units go out. The warehouse needs three pieces of data to apply them:

Arrival date per batch, recorded on the GRN when stock is received (FIFO needs this).
Expiry date per batch, also captured at receipt (FEFO needs this; see batch and lot tracking).
The bin each batch is in, so the picker is sent to the right units, which is set at putaway.

Rule	Ships first	Fits	Risk if misused
FIFO	Oldest received stock	Apparel, electronics, home goods, anything without a shelf life	Ships fresher stock when an older batch expires sooner
FEFO	Stock with the nearest expiry	Food, beverages, cosmetics, supplements, pharma	Needs reliable batch and expiry data; without it, it can’t run
LIFO	Newest received stock	Rarely used for shipping; some bulk goods where the newest is on top	Old stock ages at the back and is written off

Example. A brand holds two batches of the same 30 ml vitamin C serum:

Batch	Received	Expires	Units
A	1 August	31 March 2027	300
B	20 August	31 January 2027	300

An order arrives on 1 November. FIFO sends a unit from batch A, because it arrived first. FEFO sends a unit from batch B, because it expires two months earlier. If the warehouse runs FIFO here, batch B keeps ageing behind batch A, and by January part of it may be unsellable. With FEFO, both batches clear before they expire. These dates and quantities are illustrative.

FIFO and FEFO give the same answer whenever the older batch also expires first, which is the usual case. The difference only shows when a later delivery carries an earlier expiry, for example when a supplier ships older stock from its own warehouse.

Common mistakes

Treating the accounting method as the floor rule. Your books can value stock on FIFO while the warehouse picks on FEFO; the two are independent.
Running FEFO without expiry data captured at receipt. If expiry isn’t on the GRN, FEFO turns into guesswork at the shelf.
Mixing batches in one bin without recording it. The system can’t send pickers to the right batch if the bin holds several.
Forgetting returns. Returned units come back with their original batch and expiry and need the same check before they are restocked.
Applying FEFO to products without a shelf life. It adds data entry for no benefit; FIFO is enough.

Near-expiry stock share = units expiring within your cut-off (for example 90 days) ÷ total units in stock. Example: 1,200 ÷ 20,000 = 6%.
Expiry write-off value = units written off as expired × unit cost, per month.
FEFO compliance = picks that took the earliest-expiring available batch ÷ total picks of dated SKUs.

FIFO and FEFO in the Indian context

Food labels must carry the dates FEFO runs on. Under the FSS (Labelling and Display) Regulations, 2020, “Date of manufacture or packaging” and “Expiry/Use by” must be declared on the label, and a batch, code or lot number must be declared too (regulations 5(9) and 5(10)).
Other packaged goods. The Legal Metrology (Packaged Commodities) Rules, 2011 require the month and year of manufacture on retail packages (rule 6(1)(d)), and a “best before or use by” date where the commodity may become unfit for human consumption over time (rule 6(1)(da)). Food labels also follow the FSS regulations above, and cosmetics labels the Cosmetics Rules, 2020.
Marketplace and quick-commerce inbound. If a marketplace or quick-commerce buyer sets a minimum remaining shelf life for stock you send in, FEFO is how you choose which batch to send. Check the current rule in that platform’s seller or vendor help before each consignment.

For the floor-level how-to, including how brands enforce FEFO at the pick, read order picking.

How Fretron CommerceOS handles FIFO and FEFO

Fretron CommerceOS tracks batch, lot and expiry, and supports FEFO. Directed putaway and bin-level accuracy are live in its warehouse module, and orders can be reserved first-in-first-out or first-expiry-first-out (FIFO/FEFO) when they are allocated. Expiry notices are shown in the app only.

Questions and answers

What is the full form of FIFO and FEFO?: FIFO stands for first in, first out: the stock that arrived first is shipped first. FEFO stands for first expired, first out (sometimes "first expiry, first out"): the stock with the nearest expiry date is shipped first, regardless of when it arrived. Both are stock rotation rules used in warehouses to decide which units leave first.
FIFO vs FEFO: what is the difference, and when is FEFO required?: FIFO looks at arrival date; FEFO looks at expiry date. They differ only when a newer batch expires sooner than an older one. Use FEFO for anything with a shelf life: food, beverages, cosmetics, supplements and medicines. Indian food labels must carry expiry or use-by dates, so the data FEFO needs is printed on the pack.
Is FIFO in a warehouse the same as FIFO in accounting?: No. Accounting FIFO is a valuation method: it assumes the oldest costs are used first when calculating cost of goods sold. Warehouse FIFO is a physical rule about which units are picked. A business can value stock on one method and rotate it on another. Search results often mix the two, so check which one a source means.
How are FIFO and FEFO used in pharmacy and the food industry?: Pharmacies and food businesses use FEFO, because expiry, not arrival, decides whether a unit can be sold. Every batch is received with its expiry date, stored so batches stay separate, and picked earliest-expiry first. Short-dated stock is flagged before it reaches the cut-off a buyer or retailer will accept, so it can be sold, moved or written off.
How do you implement FEFO in a warehouse?: Capture the batch and expiry of every unit on the GRN, keep one batch per bin or record the batch per bin, and let the system choose the batch when it allocates stock to an order. Then confirm the batch with a scan at the pick, and run a near-expiry report weekly so short-dated stock is dealt with early.
FIFO vs LIFO in warehouse management: which applies to ecommerce?: FIFO, almost always. LIFO (last in, first out) ships the newest stock first, which leaves older units ageing at the back of the shelf. That is rarely acceptable for consumer products, which can date, fade or go out of season. Ecommerce brands use FIFO for undated products and FEFO for anything with an expiry date.
What happens if expired or short-dated stock is shipped to a marketplace?: Expect rejections and cost. Where a marketplace or quick-commerce buyer sets a shelf-life requirement, stock that misses it can be refused at inbound, and you may pay freight both ways, plus the cost of stock that may then be too short-dated to sell anywhere. Check each platform's current shelf-life rule in its seller or vendor help, and use FEFO to pick the batch you send.

Batch and lot tracking
GRN (goods received note)
Putaway
Cycle count
Dead stock: in the Commerce glossary (full guide in a later batch)
Quick commerce
Dark store
Dead stock

See CommerceOS on your own data.

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Last reviewed: 5 November 2026 by Fretron.

Sources

Food Safety and Standards (Labelling and Display) Regulations, 2020, compendium Version VI (22 Feb 2023), regulations 5(9) and 5(10). FSSAI. https://fssai.gov.in/upload/uploadfiles/files/Comp_Labelling.pdf (accessed 5 Nov 2026).
Legal Metrology (Packaged Commodities) Rules, 2011, with amendments, rule 6(1)(d) and 6(1)(da). Department of Consumer Affairs. https://consumeraffairs.gov.in/public/upload/admin/cmsfiles/whatsnews/Book_on_Legal_Metrology_Packaged_Commodities_Rules,2011_with_all_amendments_whatsnews.pdf (accessed 5 Nov 2026).