With more and more consumers opting to make their purchases online, the eCommerce industry is getting bigger — not to mention more complex.
Having a strong system to oversee online orders is the difference between effectively managing those complex operations and experiencing supply chain chaos.
That’s why an eCommerce order management system (OMS) is crucial for any business selling products online. Here’s how they work and what your business can gain from adopting one.
What is an eCommerce order management system?
An eCommerce OMS is a program that monitors and controls online purchases. From the time a consumer purchases an item until the moment it arrives on their doorstep, this tool provides details about the order and its status.
An OMS does it all, from monitoring inventory levels across several locations to combining customer order data from different sales channels. It even helps eCommerce businesses automate processes to reduce manual mistakes and ensure correct and efficient order fulfillment. The best OMS will also integrate with your existing eCommerce solutions, like sales platforms and accounting software, to share data seamlessly across tools.
How does an eCommerce order management system work?
From inventory control to order fulfillment, an eCommerce OMS combines several aspects of your company’s operations for maximum efficiency. Here are the main steps an OMS follows:
- A customer places an order: When a consumer orders something via your eCommerce management system, the OMS updates inventory levels across all your sales channels. These real-time updates prevent customers from purchasing items that aren’t actually available. And, when you are running low on certain SKUs, the OMS can alert you that it’s time to replenish a product.
- The platform issues an invoice: If payment isn’t required upon ordering, the platform will generate an invoice to send to the customer, outlining the total cost and payment terms.
- The fulfillment process begins: The OMS sends a notification to the team that will pick and pack the order, whether it’s stored in a warehouse, retail shop, or outside third-party logistics (3PL) provider.
- Shipping labels are generated: A great OMS automatically generates packing slips and shipping labels, making it easier for warehouse teams to prepare orders for shipment.
- The order is tracked: Once the package ships, it’s assigned a unique tracking number. If the OMS can integrate with shipping carriers, you can track that shipment’s progress until it reaches the customer’s door.
Sometimes, your OMS might have an extra step: processing returns. If a customer needs to send back a product, the OMS can manage the reverse logistics process. It will issue a return shipping label to customers online and automate driver pickups (when possible). Once you receive the item, the platform will refund the purchase.
The importance of an eCommerce order management system
Businesses trying to thrive depend on an OMS because it lowers the chance of mistakes created by human input, simplifying procedures. Your team has more time to focus on other tasks, and your customers experience faster fulfillment.
Here are the main reasons that having an eCommerce OMS is so important:
Faster delivery
The OMS is also an order processing system, meaning order fulfillment moves faster at a time when consumers expect fast and consistent service. By choosing the best warehouse or fulfillment site based on order data and past performance, the OMS will ship out an order from the best possible storage location.
The system’s automated creation of shipping labels and real-time notifications further accelerates the fulfillment process to ship packages sooner.
Decreases in mistakes
Correcting human errors in manual processes, such as misdirected order routing or incorrect inventory counts, may be expensive and time-consuming.
An OMS reduces the risk of human error by accurately updating inventory throughout all sales channels. The system monitors the whole supply chain, tracks stock levels, and notifies authorized users when SKUs are low to reduce the possibility of stockouts or overselling. This accuracy guarantees accurate and timely order fulfillment, preserving smooth operations and raising client satisfaction.
Scalability
Managing growing order quantities and widening sales channels may become taxing as an eCommerce company develops. An OMS handles omnichannel fulfillment’s intricacy without compromising effectiveness, and it can grow with your company. This adaptability helps your company expand with ease.
More multichannel options
From their online store to marketplaces and social media, most companies in today’s eCommerce scene have to consider online order management across several sales channels. If someone purchases the last item you have in stock via eBay, you need that to update on other selling platforms, like your website and Amazon storefront. No matter where the order comes from, this integration guarantees accurate inventory information, helping companies satisfy consumer expectations.
Key features to look for in an eCommerce order management system
Choosing an OMS requires you to pay close attention to important elements that will simplify your processes. Decide what you’re hoping to achieve by implementing an OMS to make the best decision for your operations.
Here are six characteristics to look for.
1. Provides a real-time view of inventory
A strong OMS offers real-time visibility into your inventory at every fulfillment point and sales channel. This ability is crucial for maintaining proper stock levels. Constant inventory data updates ensure correct and timely order fulfillment.
2. Automates the order fulfillment process
Automating the order fulfillment process helps the system decrease the danger of human mistakes, speed up order processing, and reduce the number of touchpoints, which is a central function of a good OMS.
This covers everything from creating shipping labels to order routing to creating a picking path for workers, guaranteeing fast and effective delivery of your purchases.
3. Provides insights by product, sales channel, and customer
An effective OMS should analyze your sales by different metrics, like client or product line. These insights help you understand which products are performing well, how different sales channels contribute to your revenue, and which customer demographics drive the most value. This information will help you decide how best to maximize business processes and boost profitability.
4. Operates reverse logistics
Maintaining a good customer experience depends on quickly handling returns and exchanges, and the reverse logistics features of a top-class OMS should make it easy to handle returns. Find a system that automates return label production, tracks returned products, and links with inventory management software to rapidly handle refunds or exchanges.
Hopefully your inventory management software will enable you to limit the number of returns and exchanges by analyzing sales and customer data to spot trends in these areas.
5. Integrates with other sales channels and software
If you want to build a coherent operational environment, your OMS needs to integrate smoothly with your existing systems and sales channels. Integration helps data flow naturally across your systems, whether it’s synchronizing with your eCommerce platform, CRM, ERP, or marketplaces like Amazon and eBay. This link allows for better coordination, less human error, and a more effective process.
6. Forecasts replenishment
Maintaining ideal inventory quantities depends on accurate forecasting. Real-time data and sales patterns enable a smart OMS to estimate demand and manage restocking.
For example, if the OMS notices that your inventory is moving at a much quicker rate than usual, it can use this data to anticipate demand and proactively reorder items — especially if you’re using a generative AI tool like Fishbowl AI insights. This function helps prevent stockouts, resulting in lost sales opportunities and unhappy consumers, and overstocking, which ties down capital and results in storage expenses.
Choosing the best order management system for your eCommerce business
Selecting the best OMS for your company requires thoroughly evaluating several important criteria:
- Consider your company’s needs: Determine what you need from an OMS. Are you struggling to manage multiple sales channels? Do you need automation to prevent human error from inventory updates? Asking these questions helps pinpoint the OMS aspects most critical to your company.
- Check integration capacity: Make sure the OMS you decide on can easily interact with your current CRM, eCommerce platform, and other systems you depend on. This integration is important for maintaining accurate real-time data across your company.
- Think about scalability: Rising order volumes, support of multichannel operations, and changing customer expectations should all be manageable by the OMS. Scalability guarantees that as your company grows, your OMS continues to meet your needs. Choose a solution that can scale with you.
- Review price and support options: Match the OMS’s features and capabilities to its price to ensure it falls within your means, and consider the vendor’s customer service quality. A budget option might be appealing, but if no one can help you when the system crashes, it might not be worth the money you save.
Ready to optimize your eCommerce order management?
Easily integrate Fishbowl’s sophisticated inventory control solutions to simplify your processes and streamline your operations. Fishbowl’s advanced features and QuickBooks integration let you manage orders throughout their lifecycles, track inventory, and provide exceptional customer experiences.
Take your eCommerce business to the next level with Fishbowl, and download our app today.