Individual components of cold-formed storage rack system are most vulnerable to local and torsional buckling under gravity as well as lateral loads.The capacity-based design of cold-formed storage rack system consists of deterministic allocation of strength and ductility in the structural elements and performance evaluation by suitable techniques. Nonlinear time history analysis (NTHA) and nonlinear static pushover analysis (NSPA) are most commonly followed techniques for seismic performance evaluation of any structural systems. Although, NTHA is the most accurate method of seismic demand prediction and performance evaluation, it is computationally heavy and even requires the selection and employment of an appropriate set of ground motions. This paper deals with analytical investigation of efficient configuration of conventional pallet racking system on the basis of seismic performance by using NSPA. This analytical study on conventional pallet racking system subjected to lateral loads is focused: i) to identify the local buckling failure modes of components of storage rack systems, ii) to evaluate the effect of local buckling on ultimate lateral load carrying capacity, and iii) to propose structural alterations for components of rack system so as to obtain most efficient configuration of conventional pallet racking system. Two different configurations of conventional pallet racking system are modeled and analyzed on the general purpose FE platform under monotonic unidirectional lateral loads. The results of NSPA show that pallet racking system with horizontal and inclined bracing is more efficient as evidenced from good estimates of the overall displacement, base shear and yielding capacities.