Choosing the Right Ecommerce Order Management System for Your Business
Last updated on May 17th, 2022 at 05:12 pm
If you’re an online merchant, you know the challenges that come with ecommerce order management related to capturing, tracking, and fulfilling orders.
Not only do you have to align your inventory and orders across multiple channels and your ecommerce platform (making sure not to send the wrong product), but you also must manage complex shipping schedules and order profiles to ensure reasonable shipping costs and on-time delivery times. From there, you’re caught dealing with tracking fulfillment through third-party logistics.
And after all that, you need to report, analyze, and evaluate each transaction to understand the impact your management process has on the customer experience and, ultimately, customer satisfaction.
Manually performing these processes pushes businesses to a breaking point. It’s easy to make mistakes, displease customers, and overwork employees.
If you’re still tracking your orders and inventory in spreadsheets or working with a legacy system that wasn’t designed for ecommerce, you need an order management system (OMS).
What Is Ecommerce Order Management?
Ecommerce order management refers to the process of managing and fulfilling orders from your online sales channels. This process includes everything from order routing to suppliers and printing shipping labels to customer relationship management and returns.
Outdated order management processes rely on manually-updated spreadsheets and large ERPs. However, today’s brands and retailers have more complex needs that these outdated processes can’t fulfill. To be successful in ecommerce, you need technology that can be customized and scaled to meet demand and market shifts—this is where an ecommerce order management system comes in.
What Does an Order Management System Do?
Order management systems are nothing new. An OMS is a tool or software that tracks sales, orders, inventory, and fulfillment. It delegates the processes required to get products to the customers who ordered them.
While the process of order management hasn’t changed, buyer expectations and the sales landscape have.
Today’s ecommerce order management systems need to touch nearly every facet behind operating your business, including:
- Sales channels
- Product information
- Inventory levels and location
- Customer service (think returns and refunds)
- Order printing, picking, packing, processing, shipping, and tracking
To have a fully integrated OMS means your business is entirely automated, you have real-time inventory visibility into your ecommerce platforms, and everything is running smoothly and efficiently.
What Processes Does an OMS Control?
Today’s ecommerce order management systems treat the entire supply chain as an interconnected ecosystem. This allows you to automate your merchant processes from order to fulfillment.
A fully-integrated system should:
- Accept orders and payments from any channel origin or currency
- Simplify your fulfillment process by routing orders from warehouses and suppliers based on proximity
- Streamline inventory levels across all systems and sales channels
- Provider order details to warehouses or suppliers for fulfillment
- Track customer orders
- Forecast accurate stock levels to avoid stock-outs
- Work seamlessly with internal functions such as accounts receivable and payable to generate invoices and accept payments
As a business owner, we know you understand the steps of selling a product to a customer. But let’s look at a typical customer transaction and what an OMS does throughout the process.
1. The Customer Shops Your Store
Whether they’re shopping online, in person, or through a catalog, this step always begins with customers browsing your inventory on your ecommerce platform.
In ecommerce transactions, the OMS will notify you when a shopper adds something to their online cart. If a customer bails on the purchase, you have the opportunity to pinpoint why or provide an incentive to get them to return to your site and complete their other.
2. The Order Process Begins
If you make a sale, your inventory numbers are updated immediately by your OMS. If applicable, your ecommerce order management system creates a unique tracking number for your customer. Then, the system links that number to the customer’s order.
During this, your OMS updates your projected sales information to include this transaction. You’re getting the data in real-time.
3. The Accounting System Collects Payment
As your customer provides payment information for their order, your OMS works with your accounting system, such as Quickbooks Online, to verify payment capture and generate a receipt or invoice.
4. The Order is Fulfilled
Once the order is placed successfully, the shipping and tracking process begins.
The OMS updates the process from leaving the warehouse (yours or your supplier’s) all the way to final delivery.
All of this takes place for every single customer transaction. It’s challenging to manage each step of the process manually—and the risk of human error—which is why you need a sound order management system to streamline these processes and keep them in one centralized location.
What About Dropshipping?
In a traditional supply chain, there are two different order processes.
The consumer order is the one between the customer and retailer at a point of sale (online or physical store).
The purchase order is the order between a retailer and its vendors. The purchase order happens first as the retailer buys wholesale inventory, while the customer order happens second.
Most back-office and virtual storefront technologies are created to handle one or the other type of order. It’s vital to choose ecommerce order management software that understands this change of sequence and the hybrid nature of dropshipping orders.
Why an Ecommerce OMS Is So Important
So, you now know that an OMS can streamline your processes, but let’s get into the benefits in more detail.
Using an order management system in ecommerce can help you run the internal operations of your business, reduce manual processes, save time and money, and reduce errors. It will also play nice with your existing systems so that you won’t see a dip in productivity.
Ecommerce Order Management is a One-Stop Solution
An OMS is a centralized platform serving as a source of truth with all the parts needed to run the internal operations of your business.
Without a fully-integrated order management system, you may have separate tools for accounting, customer service, POS, inventory visibility, and warehouse management. With an OMS, you can access all of this data and work with suppliers to manage inventory from one centralized system.
When choosing an OMS, look for one that will provide almost instant information on inventory levels, orders, and sales forecasts. Having this centralized information allows you to make strategic decisions and adjustments quickly. You can spend more time creating effective marketing campaigns and removing the guesswork from replenishing inventory.
Every ecommerce business is unique and rapidly evolving, so an OMS must be adaptable to your needs. If it isn’t, you’ll miss opportunities because of working inefficiently.
Save Time and Reduce Errors to Improve Inventory Accuracy
We all make mistakes—especially if you’re taking orders with one system, printing shipping labels with another, and personally coordinating between your supplier or shipping departments.
What can an ecommerce order management system do for your business? If you’re spending less time organizing departments and updating policies and processes, you can put your energy into other facets of your business. An OMS will reduce human errors in order processing, accounting, shipping, tracking, delivery, and inventory levels. How? There are fewer steps required to bring these components together.
With a one-stop solution for seamlessly making all of your business’s moving parts work together, you’ll experience greater accuracy and turnaround time. You can focus more on satisfying customers and growing your business.
Track Inventory Levels by Channel
With ecommerce, you can reach consumers where they are by offering your products through a wide variety of online channels. Your customers may choose to purchase items in-store, buy solely online, or incorporate a mix of both with buy online, pickup in-store.
Managing inventory is already a complex endeavor, but it’s even harder when you’re managing thousands of products across several channels. An ecommerce OMS can help you manage inventory across all of your sales channels by understanding which products sell best through which channels and making more-informed restock decisions. It also lets you view bestselling products by sales channel or region.
Who doesn’t want to save money?
By investing in an OMS, you’ll quit wasting money on separate ecommerce platforms. Instead, you’ll have everything you need in one program.
You’ll also save money by analyzing the data provided by your OMS in real-time. Think about it: if your inventory data shows that certain products aren’t selling as well as they should or being returned at a high rate, you can figure out why.
You might decide to remove products from your store or improve the product photos or descriptions to increase sales. This interconnected data will increase the overall financial health of your ecommerce business by giving you the information needed to improve your bottom line.
Integrating with Existing Systems
It’s common for business owners to hesitate to switch to an OMS because they rely on other systems or manual processes that have been in place for a long time.
They worry that an OMS may not interact well with their ecommerce suppliers, email marketing systems, or accounting software. Or they don’t see that an OMS adds value if it requires them to replace something that’s been working for years.
Hope is not lost. A modern ecommerce order management system can integrate with most existing systems without a hitch. You can simply interact with a program you trust within your OMS, and then everything will work together.
Weaving an existing system into your order management system reduces the steps needed to complete a task. You’ll no longer need to worry about manually moving data from one system to another.
If you’re suspicious about how an OMS will integrate with you or your fulfillment center’s existing processes, you may be pleasantly surprised. The best ecommerce order management software is adaptable, so you can incorporate it in a way that doesn’t disrupt your existing processes and improves your customer experience. Having this versatile, fully-supported system will help you stand out among your competitors.
Introducing Omnichannel Selling
Another benefit of a well-implemented ecommerce order management system is the data that allows for better-informed, more efficient decision making.
Adding additional platforms to your ecommerce ecosystem can be labor-intensive and complex. You can save time and reduce operating costs by unifying suppliers, inventories, customers, and sales channels in one software platform.
In today’s retail landscape, customers expect a cohesive omnichannel retail experience. You can ensure that their experience is consistent with automated order entry, processing, and shipment tracking software.
If you’re considering expanding to omnichannel retail, you need a consolidated view of relevant data, including customer orders, supplier pricing, shipping information, and more. When this data is analyzed inside an OMS, you can spot issues more quickly and adequately respond to market shifts as needed.
Next-Level of Scalability
Modern order management systems are able to be customized to your business and can scale alongside your company. Unlike manual processes or legacy solutions, a spike in omnichannel fulfillment needs won’t overwhelm a robust ecommerce order management system. An ecommerce OMS is specially designed to scale with your company as you grow.
How to Choose the Right OMS for Your Ecommerce Business
The right order management system in ecommerce can be a game-changer for your ecommerce brand. Now that we’ve convinced you that you need one, here’s how to choose the right one for your business.
1. Define Your Objectives
Engage your internal stakeholders in a discussion about your goals and objectives. By the end of this step, you’ll know which features you absolutely need versus those that are nice to have.
During this phase, think about your future business priorities as they relate to your current fulfillment process, inventory control, shipping carriers, shipping costs, payment processing, and other factors that will ultimately impact the scalability of your chosen inventory management software.
2. Create a Request for Proposal (RFP)
Drafting one will help you and any potential vendors understand the technical requirements and limitations of any future system you implement.
Your RFP should include order volumes, lists of SKUs, existing software, hardware, and networks. You should also provide a timeline for implementing key features of the system and details on system training and enablement.
3. Research Your Options
Compile a list of vendors to compare and reach out for demos or free trials. Evaluate their customer satisfaction on review sites to understand the customer experience you can expect. It’s unlikely that your first pick will be an ideal fit, so have a backup plan.
4. Evaluate the Responses
As you receive proposals, determine a method of scoring each of them based on your objectives. Pick the top three finalists to examine further.
5. Ask the Right Questions
As you review your top picks, the following questions will help you choose the ecommerce order management system that’s right for your business:
- Is it possible to eliminate manual processes through system automation?
- Can the system support multiple warehouse locations or various dropship suppliers?
- Do they provide reporting and forecasting to aid in strategic business decisions?
- Do they support native and third-party integrations?
- Is there access to an API that will allow you to innovate in the future?
- Will you be able to manage sales and complex processes across multiple channels, currencies, and locations?
Find the Right Fit
Choosing the right OMS is like choosing a life partner for your business. With ecommerce order management capabilities, you can digitally transform your business operations and supply chain to sell more and keep your customers happy.
To find the best fit, you must understand your needs now, as well as those in the future. Understand the capabilities and limitations of the choices presented to you.
With this guide, you’re on your way to making the right decision and ensuring the long-term success of your ecommerce business by implementing an order management system.