What Is Virtual Warehousing & What Are Its Benefits For Retailers and Business Owners?

What Is Virtual Warehousing & What Are Its Benefits For Retailers and Business Owners?

Your customers may think your products all come from a giant warehouse out back.

But that’s not how successful businesses do it these days. Thanks to virtual warehousing software, your apparel business can fulfill and ship customer orders a lot faster than in the old “single warehouse” days. 

For the logistics help you need to stay competitive in today’s “next-day-delivery” environment, you need to check out the best business management software solutions for retailers. This means doing your homework, and that starts with understanding what the software can do for you. Online businesses or e-commerce stores, in particular, have unique needs that must be considered.

Let’s start at the beginning.

Why Do Virtual Warehouses Matter?

With the rise of fast shipping (popularized by Amazon and leading fashion brands), virtual warehouses are all but a necessity to stay competitive, particularly for e-commerce businesses.

According to ScienceDirect, a virtual warehouse is “a state of real-time global visibility for logistics assets such as inventory and vehicles.” Simply put, it is software that gives you a comprehensive view of your assets and materials for logistics and fulfillment purposes. 

This means you can store your inventory anywhere in the world and distribute it on an as-needed basis.

Benefits of Virtual Warehousing

Virtual warehousing can deliver faster shipping options. That can deliver other benefits as well. Meeting the consumer’s expectation of fast delivery means you will improve your online customer service and customer satisfaction, for example. 

Retailers and business owners also benefit from virtual warehousing in the following ways:

  • Distribution centers can be built closer to manufacturing units, reducing transportation costs.
  • Virtual warehousing doesn’t eliminate the need to keep adequate safety stock, but you won’t have to maintain as much safety stock as you did before.
  • Sharing real-time inventory data is easier, minimizing backorders.
  • Service levels are improved.
  • Inventory forecasting is more effective, lowering inventory costs.
  • Reduced delivery time means faster order fulfillment.

Challenges of Virtual Warehousing

Some of the challenges associated with virtual warehousing include:

  • Finding the best system to manage stock virtually
  • Handling inventory transfers between channels
  • Coping when product is not readily available at specific channels
  • Finding the right inventory configurations and warehouse locations for your inventory
  • Dealing with cost fluctuations of transferring inventory between locations 

Virtual Warehousing Software

Finding the right virtual warehousing software for your needs is crucial to taking advantage of the benefits. Virtual warehousing software cannot fix or avoid inventory management problems or distribution issues in and of itself; you have to ensure it works with your existing software solutions to enjoy all that it has to offer.

For example, it is important for virtual warehousing software to integrate with your Enterprise Resource Planning software in order for it to work effectively.

Other software solutions that virtual warehousing software should fully integrate with include:

  • Inventory management software to help you manage multiple sales channels, divisions, warehouses and suppliers. From designs, materials, specs and costs to suppliers, you’ll be able to maximize accuracy and profitability.
  • Order fulfillment software to improve deliveries speed and customer satisfaction with increased efficiency and transparency.

These are middleware services/third-party integrations available; ApparelMagic offers API access to integrate with a variety of ecommerce, Factor, 3PL/Warehouse, or shipping solution, or B2B, B2C, or POS systems.

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