FEFO vs FIFO: Why First-Expired-First-Out Matters for Perishable Inventory

If you sell products with expiry dates, you've probably heard that you should rotate stock using FIFO — First-In-First-Out. Ship the oldest inventory first. Simple.

But FIFO has a flaw that costs businesses thousands in write-offs every year: the oldest stock isn't always the stock that expires first.

That's where FEFO comes in.

What's the Difference Between FIFO and FEFO?

FIFO (First-In-First-Out) means you ship products in the order they arrived. The batch you received first gets picked first.

FEFO (First-Expired-First-Out) means you ship products based on which batch expires soonest — regardless of when it arrived.

The difference sounds small. In practice, it's the difference between selling inventory and writing it off.

Why FIFO Fails for Perishable Inventory

FIFO assumes that older stock always expires before newer stock. That's often wrong.

Here's a real scenario:

This happens constantly with perishable goods:

• Suppliers ship different production batches with different expiry dates
• Promotional stock sometimes has shorter shelf life
• Bulk purchases may come from older production runs
• Returns re-enter inventory with less shelf life remaining

FIFO can't account for any of this. It only knows arrival date — not expiry date.

How FEFO Solves the Problem

FEFO ignores arrival order entirely. It looks at one thing: which batch expires first?

In the same scenario:

• March 1 batch: Expires September 30
• March 15 batch: Expires August 15

FEFO picks the March 15 batch first — because it expires sooner. By the time you reach the March 1 batch, you still have until September 30 to sell it.

No write-off. No waste. No expired products reaching customers.

The Real Cost of Getting This Wrong

Sticking with FIFO when you should be using FEFO creates three problems:

1. Write-Offs from Expired Stock

This is the obvious one. Stock expires on the shelf while newer (but longer-dated) inventory ships out. Depending on your margins and inventory volume, this can cost thousands per month.

2. Expired Products Reaching Customers

If your team is manually managing FIFO and makes a mistake — or if expired stock isn't clearly segregated — you risk shipping expired products.

The consequences:

• Customer complaints and refunds
• Negative reviews (especially brutal for supplements, food, and cosmetics)
• Potential regulatory issues (FDA, FSMA, EU Cosmetics Regulation)
• Brand damage that takes months to repair

3. Compliance and Audit Failures

Many regulations don't just suggest FEFO — they expect it. FDA's 21 CFR 111 (dietary supplements), FSMA (food), and EU cosmetics rules all require proper stock rotation and expiry management.

An auditor who sees expired stock on shelves next to fresh inventory — or worse, evidence that expired stock shipped — will have questions. "We use FIFO" isn't a satisfying answer.

Why Most Businesses Struggle to Implement FEFO

If FEFO is clearly better, why isn't everyone using it?

Because it's harder to manage manually.

FIFO is simple: stamp a received date on each batch, pick in order. A warehouse worker can do it without looking anything up.

FEFO requires knowing expiry dates: every batch needs an expiry date tracked. Every pick decision needs to compare expiry dates across batches. Every new receipt needs to be slotted correctly.

With spreadsheets, this becomes a full-time job. And spreadsheets don't talk to your inventory system — so even if you track expiry dates perfectly, your pickers might not see them at the moment of picking.

Most businesses end up in a messy middle ground:

• They intend to use FEFO
• They track expiry dates somewhere (a spreadsheet, a notes field, sticky notes on shelves)
• Pickers try to grab the right batch
• Mistakes happen
• Stock expires
• They write it off and move on

What Automated FEFO Actually Looks Like

The only way to reliably implement FEFO at scale is to automate it.

Here's what that means in practice:

1. Every batch has an expiry date in the system — not in a spreadsheet, not in someone's head. In the inventory system.
2. Every order automatically gets assigned the earliest-expiring batch — the system makes the decision, not the picker.
3. Pickers see exactly which batch to grab — lot number, location, expiry date. No guesswork.
4. Expired stock is blocked automatically — it can't be assigned to orders. It can't ship. The system prevents it.

When this works, FEFO happens on every order without anyone thinking about it. Write-offs drop. Expired shipments stop. Auditors see clean rotation.

FEFO and Recall Readiness

There's another benefit to FEFO that's easy to overlook: it forces you to track batches properly.

You can't do FEFO without knowing which batch is which and when each one expires. That same data is exactly what you need for:

• Recalls: Which customers received batch #12345? With batch-level tracking, you can answer in minutes.
• Audits: Show me your stock rotation records. With automated FEFO, you have a complete history.
• Expiry forecasting: Which batches are at risk of expiring before they sell? You can see it coming and run promotions.

FIFO doesn't require this level of tracking. You can do FIFO with just a received date and a location. That's simpler — but it leaves you blind when something goes wrong.

Which Products Need FEFO?

Any product with an expiry date benefits from FEFO, but it's especially critical for:

• Dietary supplements and vitamins — potency degrades, regulatory requirements are strict
• Food and beverage — obvious spoilage risk, FSMA traceability requirements
• Cosmetics and skincare — shorter shelf life for natural formulations, customer sensitivity to expired products
• Pet food and treats — same as human food, plus emotionally invested customers
• Medical and lab supplies — expired reagents produce invalid results, patient safety concerns
• Specialty chemicals — shelf-life limits, safety implications

If your products have expiry dates on the label, FEFO should be your default.

How to Switch from FIFO to FEFO

If you're currently using FIFO (or nothing), switching to FEFO requires three things:

1. Track Expiry Dates at the Batch Level

Every batch needs an expiry date recorded when it's received. Not just in a spreadsheet — in a system that connects to your picking workflow.

2. Automate Batch Assignment

Manual FEFO doesn't scale. You need a system that automatically assigns the earliest-expiring batch to each order.

3. Show Pickers the Right Batch

The batch assignment is useless if pickers don't see it. Lot numbers and expiry dates need to appear where pickers actually look — ideally in your existing order management workflow.

FEFO in Veeqo

If you use Veeqo for inventory and order management, you've probably noticed: Veeqo doesn't do batch tracking or FEFO natively.

Veeqo tracks SKU quantities. It doesn't track which batch is which, when each batch expires, or which batch should ship first.

That's why we built TraceLot.

TraceLot adds batch/lot tracking with expiry dates to Veeqo. It automatically assigns the earliest-expiring batch to every order (FEFO), syncs lot numbers to Veeqo order notes so pickers see them, and blocks expired stock from being sold.

Setup takes about 10 minutes. No IT project, no workflow changes, no data migration.

Summary

If you sell products that expire, FEFO isn't optional — it's the only rotation method that actually prevents write-offs and protects customers from expired products.

The only question is whether you implement it manually (and deal with the inevitable mistakes) or automate it (and let the system handle it on every order).