What is Virtual Warehousing?

Virtual warehousing is a relatively new concept, but no, it doesn’t involve putting on a VR headset and navigating a warehouse in a video game. Virtual warehousing allows businesses to allocate specific amounts of products to different marketplaces. Most of today’s e-commerce businesses see the value in selling their goods on a variety of marketplaces to avoid losing would-be customers. These marketplaces include a company’s own website, Amazon, and retail channels, among many others. Let’s dive into what virtual warehousing is and how you can use it to your benefit!

Before talking about virtual warehousing, it’s important to consider where your company wants to sell products. Do you have your own stand-alone website? Do you use Shopify? Do you have an Amazon shop? These are all just a few of the questions you should consider as part of the conversation around virtual warehousing, and to answer these questions well, you need to have data to show where your customers are searching for you.

Once you’ve determined where you want to sell your products, it’s time to start the virtual warehousing process. Let’s dive into how you do that.

How to implement virtual warehousing

The first step of virtual warehousing is adapting a software system that can enable you to do this. This software system is called a WMS and ties directly into running a warehouse facility—even if you don’t own your own warehouse and use a 3PL, they should have software that you can log into to perform virtual warehousing tasks.  

Each software system will have different nuances, but the idea behind virtual warehousing is that you are able to allocate a specific number of product to each marketplace you are selling on. If you make shoes and have 500 pairs of a specific model in your inventory, you may run into problems if you list all 500 pairs in the backend of your website, Amazon, and other marketplaces. You could end up overselling product on one of the marketplaces, leading to unhappy customers. A smarter approach would be to use data from sales on each marketplace to strategically allocate specific amounts to each—maybe you list 300 pairs on your website, 150 on Amazon, and send the other 50 to a retail partner.

A good software system will also allow you to set alerts for when products are running low in a specific marketplace, enabling you to always be one step ahead of the demand. The software should also allow for great visibility and data tracking, along with a user-friendly interface that makes the program an asset and not a liability.

How to pick a WMS

Picking a software program comes down to doing the research and carefully determining what program will align best with your business. ShipCaddie TWMS offers industry-leading virtual warehousing features, along with plenty of others like the ability to purchase shipping insurance and file claims in app, print labels, verify addresses, and do all things order and inventory management.  

Leave a comment with your favorite WMS software and why, and reach out to us for a ShipCaddie demo to get a feel for why we call it one platform for your growth.