Also called storage location, shelf location, rack location
A bin location is an address for stock inside a building. A common pattern is zone, then rack, then shelf, so A-03-2 means zone A, rack 3, shelf 2. Every product, or every batch of it, is recorded against the bin where it sits.
Without bin locations, stock lives in the memory of whoever put it away. When that person is on leave, orders wait while someone searches. With locations, a new helper can find a carton on their first day, and counts can be done one shelf at a time.
A wholesaler with 1,200 products across two floors might set up zones by category: A for staples, B for personal care, C for cleaning. Pick lists then send pickers shelf by shelf in walking order instead of across the building and back.