What is FIFO (first in, first out)?
October 30, 2026
FIFO, or first in, first out, means the oldest stock is sold or used first. In the warehouse it is a way of rotating stock so older items go out before newer ones; in accounting it is a way of valuing stock and cost of goods sold.
Why it matters for online retailers
For products with expiry or best-before dates, FIFO stops old stock going out of date on the shelf. For finance, FIFO gives a stock valuation that follows the order you actually bought your stock in.
FIFO in the warehouse
- Put new deliveries behind or below older stock.
- Pick from the oldest batch first.
- Track batch numbers and expiry dates where they matter.
FIFO for stock valuation
Under FIFO, the cost of each sale is taken from the oldest stock you bought. For example, if you bought 100 units at £5 and then 100 at £6, and sell 150, the cost of goods sold is 100 × £5 + 50 × £6 = £800, and the 50 units left are valued at £6 each.
FIFO vs LIFO vs FEFO
- FIFO: first in, first out.
- LIFO: last in, first out. Not allowed under UK accounting standards.
- FEFO: first expired, first out, used when expiry dates matter more than arrival dates.
How StoreFeeder handles it
StoreFeeder includes FIFO stock valuation, and batch and FIFO control for products with expiry dates, so pickers are directed to the right stock.
Read more about StoreFeeder inventory management.
Frequently asked questions
Is FIFO required in the UK?
FIFO is a common method for valuing stock in the UK; LIFO is not permitted under UK accounting standards. Ask your accountant which method suits you.
What is the difference between FIFO and FEFO?
FIFO sends out the stock that arrived first; FEFO sends out the stock that expires first.
Does FIFO affect profit?
Yes. When prices are rising, FIFO uses older, cheaper costs, which gives a lower cost of goods sold and a higher stock value.
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