What Is a Virtual Warehouse?

One of the many challenges that niche retailers face in today’s economy is being able to meet their customers’ growing expectations while keeping costs low. Ideally, retailers would have a large warehouse that holds a wide inventory, allowing them to fulfill and ship every order in just days. Real estate costs are on the rise, however, and retailers must choose to stock higher-volume products over items that do not sell as often. With the rise and convenience of online shopping, virtual warehouses have become an affordable, beneficial option for retailers wishing to expand their markets without breaking the bank.

The basics: A virtual warehouse provides the opportunity for retailers to advertise a whole new line of items online that they would not otherwise have room for on their own shelves. Through the distributor’s virtual warehouse services, customers can order products from the retailer’s website. The order is sent to the distributor’s warehouse, where it is picked, packed and shipped directly to the customer.

The benefits: Customers appreciate a fully-stocked inventory, with multiple ordering options and fast shipments. Taking advantage of a virtual warehouse gives retailers the ability to expand their customer base with new products, while increasing customer loyalty through superior services. Because the distributors provide the inventory space, in addition to the picking, packing and shipping labor, retailers can cut costs significantly while improving profits. Distributors expand business while reducing inventories, and with the ability to continually update prices online, distributors no longer have to honor outdated prices that are often found in catalogs.

If you are interested in exploring virtual warehousing or other order fulfillment services with Pioneer, please contact us.
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