Ecommerce Order Management
The back-end procedure for managing and completing online orders is called ecommerce order management.
What is that?
This covers everything, from managing subscriptions and refunds to order routing and producing shipping labels.
Order management used to rely on cumbersome ERPs and manually updated spreadsheets. The brands and marketplace sellers of today cannot be supported by these antiquated systems and procedures.
Brands want flexible, scalable, and adaptive solutions to be competitive. They require operational technologies that can scale in response to demand and market changes. An order management system can help in this situation.
Every stage of the order journey is automated and integrated by order management systems (OMS). This enables businesses to offer standardized customer experiences at scale and across all channels. Operators can handle orders coming in from various sales channels and leaving from various fulfillment sites thanks to ecommerce order management systems. It collects data inside a single interface and allows automation between service providers.
How Does Order Management in E-Commerce Work?
An order management system's objective is to provide a product to a client as quickly as possible. Each item in the customer's purchase is managed throughout its entire path, from the time it is added to the cart to the time it is delivered to the customer's door, as well as any subsequent returns.
The procedure for fulfilling orders
Every company has a different strategy for fulfilling orders. This may depend on the clients, the fulfillment sites, the returns procedures, and the suppliers. Although procedures might differ, the following phases are often included in order fulfillment procedures:
- A consumer places an order with the company.
- The order is entered into the company's system.
- The client is informed that the order has been received by the company.
- The closest warehouse or fulfillment facility receives the order.
- The order is taken from the shelf by an employee.
- The firm ships the order and produces the shipping labels.
- The order is sent by the company.
- A notification that the order is being sent is sent to the client.
- The order is delivered.
Order management systems make order fulfillment easier
The purpose of an order management system is to automate, simplify, and reduce the cost of the fulfillment process.
These processes are optimized to lower shipping and administrative expenses, improve data quality, and pick and pack in the most effective manner. Many order management systems also offer features that make processing credit cards and returns more efficient. In order to adapt to the way you do company, the best operational software will interact with the top ecommerce tools and platforms.
The Importance of Ecommerce Order Management Systems
Without an order management system in place, the majority of ecommerce businesses cannot expand.
Customers need quick, economical, and customized order fulfillment.
Manual error is not an option. Instead of sorting through backorder SKUs, contacting carriers, or printing documents, staff members could be concentrating on improving the brand experience.
Companies must create ways to distribute things ever-faster in an era where two-day delivery has become standard. Delivery times are getting shorter. The key here is the automation that an order management system can offer.
When a client puts an order, an OMS can select the warehouse or fulfillment site that is most convenient for the order's final destination. Order specifics and even order past might be used to determine the fulfillment strategy. The warehouse's personnel will then get an automated fulfillment request so they may prepare the order as quickly as feasible and send it out using a reasonable carrier.
A method for managing orders reduces human error.
Human error is the main cause of fulfillment issues in many warehouses, costing companies a lot of time and money. By giving you notifications to let you know when stock levels fall below a certain threshold or when you have too much and need to liquidate it, an order management system may conduct multichannel inventory management and warehouse optimization. This will stop shipment delays, marketplace costs, and clientele loss.
The ability to quickly and directly communicate with numerous warehouses at once regarding which merchandise to select and pack might be improved by an order management system. As a result, employees are less prone to create delays by forgetting or losing orders.
A system for managing orders will be able to expand with your business. A growth in omnichannel fulfillment requirements won't overwhelm a well-implemented order management system, unlike older systems or manual input. Its carefully created software will be able to scale as your business grows and stay up with you.
Increased multi-channel opportunities
Purchasing via a business's website is no longer the only form of ecommerce. Brands must be direct to all consumers. Nowadays, sales take place across websites, online shops like Amazon, and social media platforms like Facebook, Instagram, Pinterest, and YouTube. This is known as multichannel and omnichannel marketing. When orders are coming in from so many different locations and client traffic is moving across scattered platforms, tracking and fulfilling order status may become exceedingly difficult. Customer satisfaction and fulfillment time may be impacted by this.
Data, inventory turnover ratio, and order routing across channels may all be centrally stored and tracked via order management systems. One of the main benefits of an online order management system in the current e-commerce landscape is this.
Order Management Essentials
Brands should search for an order management system that supports their current infrastructure if they want to take advantage of the ecommerce boom. The ability to manage orders effectively may make or ruin your company. Here are some considerations to make.
It integrates across company systems
The capacity of a distributed order management system to interface with business infrastructure, service providers, and supply chain technology is a crucial feature. The majority of order management programs may be integrated with your accounting program, inventory manager, warehouses, customer service divisions, and other programs. Some even provide an App Store or, in the event that neither is accessible, open APIs that may be used to create third-party connections. Order administration will be as simple and automatic as possible thanks to integrations with your existing systems.
Automation replaces manual procedures
The better, the less manual procedures there are. Manual procedures are much more prone to human mistake and will never match the pace of order management software.
It offers a worldwide service
Our world is becoming more and more globalized. Every day, brands accept orders from outside their boundaries. The majority of order management systems are capable of facilitating international e-commerce orders and payments from any nation and currency. In addition to increasing a brand's retail presence, this enables them to gain knowledge and develop as a result of their experiences in new areas.
It reports and anticipates stock requirements
To prevent overordering or, worse still, overselling, many order management systems can forecast how much safety stock you'll need. This may be crucial in Q4 and other periods of unanticipated demand changes. A merchant-fulfilled approach can also be supported by an order management system that links to your inventory channels.
It functions on all channels
Order management systems may satisfy client expectations on all e-commerce platforms and sales channels you would anticipate, including your website or e-store, marketplaces, or whatever main sales channel you use to sell. As your firm expands, managing these orders through a single channel will become more and more difficult. Your team will become burned out and more prone to blunders without a mechanism to connect the sales orders and data from each channel, as each one has its own logins and procedures.
All of your channels may be combined into one user experience using an order management system. Your team will spend far less time filling orders and orienting new employees as a result.
The Step-by-Step Ecommerce Order Management Process
Offering a best client experience directs the order management lifecycle. An order management system works to satisfy client demands all the way through order placing, delivery, and even returns and reimbursements.
Even before the consumer submits a sales order, the order management process begins. When a consumer adds an item to their online basket, the order management system could take note and immediately change inventory. You may receive a notification from the system if the item has been abandoned or if it is currently in the cart.
Making an order
The order management system interacts with your back-office systems to process order data and authenticate credit card payments when a customer decides to make a purchase. The order can be sent to fulfillment once it has been authorized.
An OMS will choose the best warehouse based on proximity to the order destination based on the order parameters. Based on predetermined parameters, it will then automatically determine shipping rates and the quickest carriers. Additionally, it could create shipping labels and packing slips, as well as inform your warehouse management system of any changes to the inventory levels.
The OMS may contact your vendors and suppliers to have product shipped to that warehouse in advance if an SKU is out of stock. If your order management system can automatically generate a buy order when inventory levels are low or reach a reorder point, stock-outs can also be avoided. By providing information on where in the warehouse an item may be found, warehouse KPIs to watch, what goods to ship together, and whether an item needs special treatment, the system can improve staff productivity.
The order management system may notify the client that their purchase has shipped once the warehouse chooses, packs, and sends the goods. On the basis of their delivery address and order details, it may also let them know when to anticipate receiving it. Whether the shipment is going to the client's house or a shop location, you and the customer may follow it as it goes.
Refunds and returns
Even if an unhappy consumer returns an item, a successful return and refund process may significantly contribute to mending relationships.
A refund request may be processed instantly by an order management system, which will also connect with your back-office systems to carry out the reimbursement. In order to guarantee that data is correct and updated as the process progresses, it can also link to your returns provider.
Order Management Challenges
You must be aware of the difficulties before deciding to deploy an order management system. Order management systems provide benefits, but there are also drawbacks that prevent some businesses from implementing them.
Finding the ideal OMS to suit all of your online business demands might be difficult because there are so many available. You could encounter several difficulties, such as the following:
- A poorly integrated order management system with your current website or e-commerce platform
- A system for managing orders that isn't constantly updated to reflect changing consumer wants or demands
- An order management system that makes it more difficult to see your inventory and place supplier orders
- Before deciding on a course of action, do your research, ask questions, and consider your alternatives.
An order management system might cost anywhere from a few hundred dollars per month to several thousand. You may need to select a more focused operations system if your business cannot afford an ERP system with all of its features.
Difficult to implement
Fear of a complex system they can't grasp is one of the main barriers preventing businesses from implementing order management software. Find a vendor that provides a demo, guided implementation, and continuing assistance to address this problem. It might be difficult to convert to a different order management system once you deploy one that doesn't work, so don't be hesitant to ask questions.
The Advantages of an Ecommerce Order Management System
You'll start to wonder how you survived without an order management system after you have one in place. In today's digitally altered retail world, where changes in demand can occur at any time, an OMS is a need. Here is a list of the advantages of using an order management system for online stores.
Reduced expenses and improved earnings
When it comes to keeping expenses low and revenue high, automation is your friend. An order management system gives you access to the automation features you need to succeed. One way the system may help with inventory control is by automatically creating reports on your stock that show you exactly where you have low levels and what has to be liquidated. In order to know what things to budget for and when to have them in stock, it can utilize previous data to forecast future inventory patterns.
Another benefit of automation is that it eliminates manual tasks wherever feasible. You will lose clients and money due to human mistakes. Additionally, it reduces profitability and takes employees' focus away from high-value, brand-building tasks.
A better working environment
An order management system has a good effect on your staff in addition to replacing manual procedures. They won't have to speed up labor-intensive manual operations to handle increased demand as your company expands.
They may concentrate their efforts on what really matters—your consumers.
An order management system's greater efficiency will be welcomed by the staff as well. The solution will enable employees to perform better work by providing immediate information and integrating that data across the supply chain.
Increased client satisfaction
An order management system's favorable impact on the customer experience is its most significant advantage. The ultimate goal of order management systems is to deliver the goods to the client more quickly, decrease errors, and enhance the customer experience. Your clients will get advantages from the use of an order management system.
The innovative experience you and your consumers require
Every sales channel in your e-commerce ecosystem can efficiently complete orders with the help of an order management system.
Your business will find it difficult to stay competitive without contemporary, integrated, and specialized order management software.
You don't want your clients to think of your business when they hear the terms "dated," "slow," or "old fashioned." They'll notice the improved customer experience you can deliver with the proper order management technology, and your business will expand as a consequence.
Direct to consumer brands and ecommerce businesses are continuously coming up with innovative methods to meet and even exceed changing consumer expectations. The well-known free two-day shipping guarantee of Amazon Prime has raised customers' expectations for shipment times to an almost impossible level. Additionally, customers now anticipate being able to track their parcels and getting regular email and even SMS updates on the progress of their orders.
These predictions suggest that in the upcoming years, ecommerce will move toward being speedier and more customized. At this point, the only way to stay up with the pace and carry on inventing is with a strong order management system.
The days of handling client orders through separate channels and coordinating departmental communications randomly are long gone. In the world of e-commerce, an order management system is the way of the future.
The fastest, most customized, and error-free order fulfillment experience is what customers have grown to expect, and it can only be provided by using this way. As an online shop, you are continually required to think more quickly, individually, and technologically. In each of these areas, the order management solutions of today are created to offer unrivaled client pleasure.