diff --git a/lib/wpwatch.js b/lib/wpwatch.js
index aa00a3583..bf60b55ee 100644
--- a/lib/wpwatch.js
+++ b/lib/wpwatch.js
@@ -43,7 +43,15 @@ module.exports = {
           });
       });
 
-    const compiler = webpack(this.webpackConfig);
+    const compiler = webpack({
+      ...this.webpackConfig,
+      context: this.serverless.config.servicePath,
+      output: {
+        libraryTarget: 'commonjs',
+        path: this.serverless.config.servicePath+'/.webpack/service',
+        filename: '[name].js'
+      }
+    });
 
     // Determine if we can use hooks or if we should fallback to the plugin api
     const hasHooks = compiler.hooks && compiler.hooks.beforeCompile;