Do You Need A Virtual Warehouse For Your Fashion Brand?
Traditionally, merchandise is stored in one giant warehouse -- where all orders are delivered from. This system makes monitoring goods easier because all items come and go from a single location.
However, the erratic fluctuations in customer demands and preferences make traditional logistic networks inefficient and inflexible. In addition to this, the need for a same-day or next-day delivery service has made the competition between businesses tighter, rendering the single-warehouse logic impractical.
A virtual warehouse eliminates the necessity to maintain a warehouse and an inventory to meet customer demands. This makes it more viable for small businesses to enter the textile industry and compete with more established brands in the market.
What is a Virtual Warehouse?
A virtual warehouse is a kind of distribution method where products are housed in a third-party service provider. Merchandise can be stored in available physical warehouses on an as-needed basis, making inventory management easier for smaller businesses to handle.
A virtual warehouse is made more efficient with the use of a platform that provides visibility to inventory assets in real-time similar to how a local warehouse facility does. Any industry can apply the concept of a virtual warehouse to improve its supply chain network.
In a supply chain where a virtual warehouse is integrated into, the network is consulted to determine the best way to deliver products to the customer. Specific inventory allocations can be made for particular purposes or market segments to ensure every demand is met.
Virtual warehouses are becoming more relevant to remain competitive in an environment that calls for fast shipping and rapid fulfillment of customer demands. They’re becoming the practical solution for retailers in all industries and niches, including those working in the textile business.
E-commerce businesses benefit the most from virtual warehouses because they don't have to maintain a physical facility where they need to keep an inventory. Whenever a buyer orders from their store, they can just buy the fabric online from trusted suppliers and have it delivered right on the customer's doorstep.
Still, product management and order fulfillment must be kept organized to ensure your company meets customer expectations.
A virtual warehouse can be used to serve multiple channels and create a more efficient supply chain network. The system can be used to increase profit margins while reducing business costs. Combining it with an enterprise resource planning (ERP) solution will even help automate back-office functions for a more effective inventory and customer management.
Benefits of a Virtual Warehouse
Here are the advantages of adopting a virtual warehousing method into your supply chain network:
1) Cost reduction
Eliminating the need to maintain a physical structure is a significant relief to operations overhead. You don't have to worry about security, maintenance, permits, and space leasing since you'll be outsourcing everything to a physical warehouse provider.
Virtual warehouses are designed to serve on an as-needed basis, so you can schedule when to hold your inventory and budget the associated costs of using the service.
2) Logistic efficiency
With a traditional physical warehouse, you'll probably have to ship products from one location and deploy it to several branches in different areas. The travel time and shipping cost of this practice can be inefficient and expensive.
Virtual warehousing introduces faster fulfillment of customer orders because distribution centers can be built closer to garment factories. In case you have multiple branches, you can assign the nearest fabric factory to deliver to your satellite sites. These methods reduce costs and ensure faster delivery times that customers expect from your brand.
3) Inventory flexibility
Frequent changes in product demand often lead to insufficiencies in available inventory. This can lead to production delays or even the inability to meet customer demand at the right time. Consumers who experience this will most likely look for another fashion brand with similar designs to the product they're looking for.
A virtual warehouse provides flexibility to fashion companies by giving access to multiple suppliers of the same type of fabric. You can easily source your materials from another garment manufacturer in case your go-to supplier fails to deliver on time.
With a virtual warehouse, it becomes easier to cope with fluctuating customer demands because you don't have to buy more than you need. Similarly, in case there's a surge in demand for a particular product, you can tap several fabric mills to meet customer expectations.
Does Your Brand Need a Virtual Warehouse?
In the textile industry, virtual warehouses work similarly to the business model used by Uber and Airbnb. These companies don't necessarily own hotel rooms and car fleets. Instead, they link those who have the resources to those who need it using an ingenious method.
Applying Uber and Airbnb’s business model, it’s plausible to have an online platform that connects the supplier to the fashion designer and create an environment for better collaboration.
Even if there exists a physical warehouse and the associated workforce to maintain it, your fashion company won't be able to tap into these resources without knowing their location and capability. Suppliers will only be able to serve those in their area, while fashion brands will have a limited list of garment manufacturers where they can source their products.
To benefit from virtual warehousing, you need a platform that collects and communicates data to your business in real-time. It should give you sufficient information that can help you achieve optimal decision-making actions for your fashion brand by making available suppliers visible.
A virtual warehouse is highly dependent on information systems that can track inventory in real-time to provide better operational efficiency. But developing a platform from scratch is inefficient, especially with the expensive hardware and the resources needed to program the software.
Luckily, you don't have to build a system that enables you to take advantage of virtual warehousing by connecting your fashion brand to textile suppliers worldwide. This is where Frontier comes into the picture by establishing a platform where suppliers and fashion companies can meet and expand their respective networks.
With Frontier, garment mills get to promote their services on a widely accessible online platform where thousands of fashion designers are registered. On the other end, fashion companies get to know more suppliers to help them meet customer demand.
Frontier for Virtual Warehousing
Frontier is an AI-powered digital fabric platform that presents the most powerful textile image exchange that businesses in the fashion industry can use. It makes communication between internal teams and between suppliers and fashion designers more efficient by giving them a single platform for exchanging feedback.
The Frontier platform makes it easy for you to search for fabric designs through the countless digital samples provided by garment factories. Ordering the fabric is also quick and simple since you can directly talk with the supplier about it through the platform. You don't need to order materials in bulk since you can quickly request the amount you need for production.
Frontier is cloud-based, so you don’t have to worry about having the right hardware and software to run the platform. All you need to do is register as either a fashion brand or a garment manufacturer on our website and wait to get approved.
If you’re still wondering how Frontier can help your business reduce its warehousing expenses, you can request for a demo or send us your inquiries about the platform.