n8n Workflow Automation: The Setup Guide That Actually Works

n8n is one of those tools that looks simple in the demos and then takes you a full day to actually set up properly for the first time. Not because it's bad software. Because the docs assume you already know which decisions matter and which don't.

I've set up n8n on Docker, on a VPS, on Railway, and in more complex multi-instance configurations. Here's the version that works without the trial and error.

What n8n Is (And What It Isn't)

n8n is a workflow automation platform. You build visual flows that connect services: "when something happens here, do something there." Same category as Zapier and Make (Integromat), but self-hostable and significantly more powerful for technical users.

The key differences from Zapier:

For developers building serious automations, especially ones that involve AI, n8n's self-hosted version is almost always the better choice.

Self-Hosted Setup: The Fast Path

I use Docker Compose for every n8n installation. It's the most reliable setup and the easiest to maintain and upgrade.

# docker-compose.yml
version: "3.8"

services:
  n8n:
    image: docker.n8n.io/n8nio/n8n:latest
    restart: always
    ports:
      - "5678:5678"
    environment:
      - N8N_HOST=${N8N_HOST:-localhost}
      - N8N_PORT=5678
      - N8N_PROTOCOL=${N8N_PROTOCOL:-http}
      - NODE_ENV=production
      - WEBHOOK_URL=${WEBHOOK_URL}
      - N8N_ENCRYPTION_KEY=${N8N_ENCRYPTION_KEY}
      - DB_TYPE=postgresdb
      - DB_POSTGRESDB_HOST=postgres
      - DB_POSTGRESDB_PORT=5432
      - DB_POSTGRESDB_DATABASE=n8n
      - DB_POSTGRESDB_USER=n8n
      - DB_POSTGRESDB_PASSWORD=${POSTGRES_PASSWORD}
      - EXECUTIONS_DATA_PRUNE=true
      - EXECUTIONS_DATA_MAX_AGE=720  # 30 days
    volumes:
      - n8n_data:/home/node/.n8n
    depends_on:
      postgres:
        condition: service_healthy

  postgres:
    image: postgres:15
    restart: always
    environment:
      - POSTGRES_DB=n8n
      - POSTGRES_USER=n8n
      - POSTGRES_PASSWORD=${POSTGRES_PASSWORD}
    volumes:
      - postgres_data:/var/lib/postgresql/data
    healthcheck:
      test: ["CMD-SHELL", "pg_isready -U n8n"]
      interval: 5s
      timeout: 5s
      retries: 5

volumes:
  n8n_data:
  postgres_data:

Create your .env file:

# .env
N8N_HOST=n8n.yourdomain.com  # or localhost for local dev
N8N_PROTOCOL=https  # or http for local
WEBHOOK_URL=https://n8n.yourdomain.com/
N8N_ENCRYPTION_KEY=$(openssl rand -hex 32)  # Generate a secure key
POSTGRES_PASSWORD=$(openssl rand -hex 16)  # Generate a secure password

Start it:

docker-compose up -d

Access at http://localhost:5678 (or your domain).

HTTPS Setup (Required for Webhooks)

If you want webhooks from external services (Stripe, GitHub, etc.), you need HTTPS. Here's the Nginx reverse proxy config:

# /etc/nginx/sites-available/n8n
server {
    server_name n8n.yourdomain.com;

    location / {
        proxy_pass http://localhost:5678;
        proxy_http_version 1.1;
        proxy_set_header Upgrade $http_upgrade;
        proxy_set_header Connection 'upgrade';
        proxy_set_header Host $host;
        proxy_set_header X-Real-IP $remote_addr;
        proxy_set_header X-Forwarded-For $proxy_add_x_forwarded_for;
        proxy_set_header X-Forwarded-Proto $scheme;
        proxy_cache_bypass $http_upgrade;
        # Increase timeouts for long-running workflows
        proxy_read_timeout 300s;
        proxy_connect_timeout 300s;
    }

    listen 443 ssl;
    ssl_certificate /etc/letsencrypt/live/n8n.yourdomain.com/fullchain.pem;
    ssl_certificate_key /etc/letsencrypt/live/n8n.yourdomain.com/privkey.pem;
}

Get the SSL cert with Certbot:

certbot --nginx -d n8n.yourdomain.com

Building Your First AI Workflow

Let me walk through building a real workflow: a system that monitors RSS feeds, summarizes new posts with AI, and sends a Slack digest.

Workflow: AI RSS Digest

In n8n's visual editor, create this flow:

Here's the JavaScript code for the Code node that formats the digest:

// Code node: Format Digest
const items = $input.all();

const digestItems = items
  .filter(item => item.json.summary) // Only items with summaries
  .map(item => {
    const { title, link, summary, source } = item.json;
    return `*${title}*\n${summary}\n<${link}|Read more> | ${source}`;
  });

if (digestItems.length === 0) {
  return [{ json: { text: "No significant new content today." } }];
}

const digestText = [
  `*Daily Content Digest - ${new Date().toLocaleDateString()}*`,
  `_${digestItems.length} items worth reading_`,
  "",
  ...digestItems.slice(0, 10), // Limit to 10 items
].join("\n\n");

return [{ json: { text: digestText } }];

For the Claude integration, use the HTTP Request node to call the Anthropic API directly, or use n8n's built-in AI nodes:

// HTTP Request node settings:
// Method: POST
// URL: https://api.anthropic.com/v1/messages
// Headers: x-api-key: {{ $credentials.anthropicApi.apiKey }}
//          anthropic-version: 2023-06-01
//          Content-Type: application/json

// Body (JSON):
{
  "model": "claude-haiku-4-20250514",
  "max_tokens": 256,
  "messages": [{
    "role": "user",
    "content": "Summarize this in 2 sentences: {{ $json.content }}"
  }]
}

Error Handling: The Part Everyone Skips

Workflows that don't handle errors get abandoned. Here's how to build resilient flows.

Error Workflow Pattern. In n8n, every workflow can have a dedicated error handler. Create a workflow called "Error Handler" that:

1. Receives the error details
2. Sends a Slack notification with: which workflow failed, which node, the error message, a link to the execution log
3. Optionally: retries the workflow after a delay

Enable it in each workflow's settings: Settings > Error Workflow > select your Error Handler workflow.

Retry Logic for External APIs. External services fail. Add retry logic in your HTTP Request nodes:

• Retry on Failure: enabled
• Max Tries: 3
• Wait Between Tries: 5000ms

Conditional Error Handling. For workflows where a partial failure is acceptable:

// Code node: Handle partial failures
const results = $input.all();
const successful = results.filter(r => !r.json.error);
const failed = results.filter(r => r.json.error);

if (failed.length > 0) {
  console.log(`Warning: ${failed.length} items failed:`, failed.map(f => f.json.error));
}

// Continue with successful results
return successful;

Production Checklist

Before any workflow goes live:

• Error workflow configured and tested
• All credentials stored in n8n credential manager (not hardcoded)
• Workflow tagged with owner and purpose
• At least one test execution reviewed manually
• Rate limits considered (both for n8n and for connected services)
• Execution data retention configured (don't fill up your disk)
• Notifications set up for workflow failures

Common Issues and Fixes

Webhooks not receiving: Check that your WEBHOOK_URL environment variable exactly matches your public URL, including trailing slash. n8n is strict about this.

Database connection errors: If you see Postgres connection errors after a restart, check that the Postgres container is fully healthy before n8n starts. The depends_on with health check handles this.

Memory issues with large datasets: Use the Limit node aggressively. Process large datasets in batches. Don't try to process 10,000 records in a single workflow execution.

Workflow timing out: For long-running workflows, increase both the Nginx proxy timeout and n8n's own execution timeout in settings. Default timeout is 2 minutes.

API rate limits: Use n8n's built-in Rate Limit node or add Wait nodes between batches of API calls.

What to Automate First

The highest-ROI automations for most teams:

1. Weekly report generation: Aggregate data from multiple sources, generate AI summary, send to Slack
2. Lead qualification and routing: New form submission triggers qualification, routes to right person
3. Invoice processing: Email with attachment triggers extraction, approval routing, payment logging
4. Content distribution: Publish once, automatically distribute to multiple channels
5. Customer onboarding: New customer triggers welcome sequence, account setup, team notification

Each of these can be running in an afternoon with n8n.

Sources

• n8n Official Documentation
• n8n Docker Setup Guide
• n8n Community Forum

Further Reading

• Automating Email with AI: From Inbox Zero to Zero Touch
• AI Lead Generation: Build a System That Runs Itself
• Build Your First AI Agent in One Afternoon
• API Integration Patterns: What Works at Scale
• Monitoring AI Agents in Production