For buyers, the work is complete once they click the “Buy Now” button. All they have to do now is relax and await the delivery of their ordered products. However, if you run an online store, here is when the real work begins. Each new order initiates a complex chain reaction that starts from payment acceptance to picking, packing, and finally shipping the order to the correct location. As a small online business, you may be able to complete this procedure with a few cardboard boxes, a few postal stamps, and a legal pad. However, as your business grows, you will need to consider dedicated tools to handle the influx of orders. With that in mind, we’ll walk you through the order management process for ecommerce businesses.
How Is Order Management Defined?
Order management refers to the collection of processes used by a business to track, fulfill, and handle an order from the time it is placed by a client to the time it is securely delivered. It now extends beyond delivery as well. If your firm allows the return of orders, the procedure truly stops when your consumer retains the merchandise after the return deadline has expired.
Order management is critical to the success of any ecommerce firm, regardless of its size. Not only does this ensure that you retain revenue, but it also contributes to customer retention and brand loyalty.
The slightest errors—from processing delays to shipping errors—can result in financial losses due to refunds and reshipping expenses, as well as long-term negative consequences for your brand’s reputation. That is precisely why an order management system is required. They are an all-in-one order management solution that will assist you in keeping your customers satisfied.
What Is A Customer Relationship Management System (CRM)?
Order management systems are software applications that track and manage customer orders. They cover the entire process from start to end and simplify workflows to provide the smoothest possible stock management and fulfillment. Simply said, OMS systems organize and automate operations so that you can track your inventory, monitor the delivery process, and ensure consumers receive the correct order in the correct condition.
Suppose you own an online store and a client makes an order for your products. The OMS would validate the payment, transmit the order to the inventory storage, track the products as they were chosen, packed, and sent, and ultimately ensure they were delivered properly. Additionally, the majority of OMS solutions track any customer care interactions that happen along the process, such as alerting consumers about a delay or performing refunds or exchanges.
OMS solutions gather critical performance and efficiency indicators, allowing your firm to identify what works and identify possible areas for development.
Why Is Order Management Critical?
The last thing any seller wants to do is expand the business only for the sake of expansion. However, order management is not a luxury. It is a requirement for businesses of all shapes and sizes. The following are just a few of the significant issues that the correct OMS can resolve for your business.
Maintain Precise Stock Levels
Both over-stocking and under-stocking of products create complications. If you overstock, you risk losing consumers to competitors who can provide what they want instantly. If you understock, you risk losing buyers to competitors who can provide what they want quickly. An OMS ensures that you have the correct quantity of goods on hand at the right moment, ensuring that your earnings remain constant and your customers remain pleased.
Reduce Fulfillment-Related Errors
In theory, the order fulfillment process is straightforward, especially for small businesses. However, as your business grows, you will get orders from all around the world via a variety of sales channels. By utilizing the automation and simplified processes provided by an OMS, you can worry less and accomplish more.
Amass Useful Data
An OMS enables you to view all of your order data and sales in one location, making it easier to get valuable insights into your processes and make business adjustments based on cold, hard statistics. Additionally, real-time data collection enables the detection of issues as they occur.
Time Is Money
How frequently have you been contacted by a customer regarding shipping? A cargo that has been delayed? An issue with a certain product’s SKU? What about a refund? By utilizing an OMS, you can automate all of this and free up time to focus on other important aspects of your organization.
The Process Of Order Management
Order management is divided into seven distinct phases. Consider the picture below, which summarizes the primary processes that often occur when a customer places an order. As you can see, this is a lengthy chain involving a variety of procedures and players. And, just like with any chain, it takes one weak link to bring the whole thing crashing down. Let’s take a closer look at the order fulfillment lifecycle in further depth below.
1. Acceptance Of An Order
The first stage is the most enjoyable, someone sees your website and makes a purchase. But before you spend that sweet money, there are a few things that must occur behind the scenes.
2. Transmission Of Orders
After the consumer places an order, your warehouse or fulfillment partner receives both the customer and order information.
This is accomplished through the use of automated processes in an order management system. It may update the order status and route the order to your fulfillment representatives with all essential information such as the SKU and customer preferences.
3. Order Selection
A product is purchased and the order fulfillment procedure begins. Now it is time for a procedure that cannot be fully automated unless you want to use robots to manage your inventory.
Typically, the procedure goes as follows:
- The purchase order is received by a team member
- Selects the correct SKU from the inventory
- Delivers items to a different site for packing
It is suggested that you utilize a barcode scanning-capable inventory management solution. This assists in tracking items from sourcing through the packing and is intended to reduce human error to the greatest extent feasible.
4. Order Packaging
After obtaining the item, the picker transports it to the packaging station. As a general rule, it is up to another member to verify the accuracy of the order and then pack it for shipment.
5. Order Shipment
Here, you have succeeded. Your goods have been picked up, purchased, and packed neatly. All that remains is to ship it. Though it is not as straightforward as strolling down to the courier office and depositing it in the large red box.
The warehouse/packing crew is responsible for the following:
- Choose a delivery method
- Create a shipping label for each purchase you receive
- In your OMS, mark the product order as shipped
- Communicate with the consumer regarding the progress of their order
6. Order Fulfillment
This is the point at which the courier partner picks up the product and delivers it directly to the consumer. It is out of your control; therefore you must do everything possible to maintain control over the remaining process.
7. Follow-up On Internal And External Level
The item has been delivered. It has been delivered to the customer. However, you cannot simply abandon the process; you must continue to work with your customers and staff to make changes and further optimize the process.
Make Things Simple With An Order Management System
Ecommerce firms have a plethora of tool alternatives. Therefore, where to begin? We suggest taking a moment to consider what you truly require. What are your issues of contention? What might you do better? Consult with colleagues and employees and avoid making rash decisions or selecting the most costly instrument for its purpose. Bear in mind that the objective is to discover the best product for your organization, whether that’s a specialized OMS or something more adaptable like an advanced, tech-enabled shipping aggregator like NimbusPost.