The demand for automated order management systems is growing each year. By 2026, it is forecasted to almost double, and this is entirely justified. Today, every fourth person worldwide prefers to make purchases online. With the increasing number of customers, companies face the necessity to process large volumes of orders. This poses certain challenges in organizing and controlling their business processes.
To promptly and efficiently handle the growing volume, online businesses are increasingly turning to automated OMS. In our article, we will explain what an order management system for ecommerce is, how it works, and which solution to choose for your business.
What Is An Order Management System for Ecommerce?
An order management system for ecommerce (OMS) is a software solution designed for the automated management of the entire lifecycle of an online order. OMS enables companies to process, track, and manage orders from the moment a customer places a request to its successful delivery. An order management system is particularly valuable for companies that receive orders through multiple sales channels.
An order management solution provides ecommerce companies with the capability to manage all operations from a unified platform. This eliminates the need for manual decision-making and allows employees to focus on more crucial activities, such as building customer relationships and increasing revenue.
Ideally, OMS for ecommerce should seamlessly integrate with other company systems. For instance, integrating OMS with your ERP system will help prevent data input duplication across different platforms. Alternatively, integrating OMS with a Warehouse Management System (WMS) allows for tracking inventory flows and planning purchases.
Advanced order management platforms also provide retailers with reports and analytical information. They enable tracking key performance indicators (KPIs) such as average order fulfillment time, percentage of product returns, and delivery costs.
Impact of OMS on the Order Lifecycle
The speed and efficiency provided by OMS shape the customer experience and their perception of your company. The faster you complete the order cycle, the more likely they are to make a repeat purchase from you. Let’s examine how OMS interacts with the order at each stage of the cycle, starting from its creation and ending with successful delivery.
Tracking customer interests
Order management begins when a customer adds items of interest to their cart through an online store, application, or other online channels. At this stage, the order management system records each of their actions, saving temporary data about the buyer’s session. This ensures the preservation of added items during subsequent visits to the website.
OMS also retains information about carts even if the purchase is not completed. This allows your business to analyze customer behavior, understand reasons for abandonment, and optimize marketing strategies. Based on cart data, OMS can suggest additional items or offer discounts, creating personalized promotions.
Order processing
Once the customer clicks the “buy” button, the OMS captures all the details of the order: customer contacts, delivery address, payment method, and other relevant information. The order management system then confirms the order and transfers all the data to the warehouse.
Payment processing
Modern OMS can ensure secure payment processing by interacting with payment gateways and security systems. This guarantees the protection of customer confidential data.
After a successful payment, the OMS updates the order status and notifies the customer of the successful transaction. The order management system automatically generates corresponding financial documents, such as a receipt or invoice. These can be provided to the customer for accounting or other purposes.
Order fulfillment
Once an order moves to the “paid” status, it transitions to the fulfillment stage. The OMS automatically communicates with the inventory system, selects the warehouse closest to the buyer, and generates lists for picking. During the shipping stage, the OMS provides the option to independently print shipping labels.
Order shipment
When the order is ready for shipment, the OMS notifies the customer and provides additional information about the estimated delivery date and associated costs. The customer can track the order, plan for receiving the item, and keep track of their expenses. In turn, the company has the ability to monitor the order status and assess the timeline for its completion.
Return management
Upon approval of a return request, the OMS automatically generates a return label, facilitating the customer’s return shipment. Company staff can track the progress of the return processing in real-time and respond promptly to any potential delays or unusual situations.
Order closure
After successful delivery, the OMS automatically updates the order status in the system, marking it as completed. It then creates an archival record for future analysis and notifies the customer of the successful order completion.
Key Advantages of Order Management Systems
The development of ecommerce and multi-channel sales strategies underscores the importance of OMS. From the moment a customer adds a product to the cart to order closure, each stage requires careful control and prompt response. OMS enables companies to automate and optimize every stage of the order lifecycle, providing them with a range of advantages:
Fast delivery
Modern consumers have high expectations for delivery speed and service. Companies use order management systems to meet these expectations and compete successfully for customer attention and loyalty. By automating processes such as warehouse picking, packing, and shipping, OMS accelerates order fulfillment. This allows your company to deliver products to customers within specified timeframes.
Order accuracy
People are prone to making mistakes when managing large volumes of information. These errors can cost time, money, and damage the reputation of any business. By automating order fulfillment, OMS eliminates the risks associated with manual order processing. You can reduce the likelihood of errors while simultaneously saving labor costs.
Better inventory control
One of the most significant advantages of OMS is its ability to enhance inventory control. Utilizing data and analytics, OMS accurately forecasts demand for products, enabling companies to maintain an optimal level of inventory. This minimizes the likelihood of shortages or excess stock in the warehouse.
Multi-channel order fulfillment
OMS excels in managing orders across various channels. Whether it’s online platforms, physical stores, or other sales channels, OMS easily integrates and automates the order fulfillment process. This enables your company to reach a broader audience and efficiently fulfill orders, regardless of the sales channel chosen by the customer.
Enhanced customer service
The benefits of OMS also extend to improving customer service quality. With precise order processing, timely delivery, and accurate customer information, businesses using OMS elevate service standards.
Cost reduction and increased profitability
Minimizing errors, optimizing inventory, and streamlining fulfillment operations enable businesses to reduce operational expenses. Simultaneously, the customer loyalty facilitated by OMS contributes to profit growth. Satisfied customers are more inclined to make repeat purchases and recommend your brand to others.
Challenges Associated with Implementing an Order Management System
Order management systems are an excellent way to ensure fast and efficient order fulfillment. However, their implementation comes with certain challenges that should be taken into account when planning the system’s deployment. Here are the most common issues:
Integration complexity
Integrating OMS with existing systems, such as inventory management systems, CRM, and ecommerce platforms, can be complex. Compatibility or data migration issues may arise. Choose an OMS with flexible integration capabilities and API connections to mitigate these challenges.
Costs
Implementing order management software can incur significant costs, including licensing, integration, and employee training expenses.
Develop a comprehensive financial plan that includes all associated expenses. Assess the long-term benefits compared to the initial investments and consider the scalability of the OMS for future growth.
Scalability issues
As the business grows, the OMS should scale accordingly. Inflexible systems may struggle to adapt to increased order volumes and expanded operations.
Choose an order management system with scalability in mind. Regularly assess its system performance and plan for future updates and enhancements.
What to Consider When Choosing an Order Management System?
There are numerous OMS options for ecommerce, each promising automation and easy integration with third-party systems. To make an informed decision when choosing an order management system, it’s crucial to determine which features are key for your business. Explore various systems, focusing on those that best align with your requirements. Pay special attention to the following features:
Integration capabilities
Check how easily the OMS integrates with your current systems (CRM, ERP, warehouse management system). Seamless integration ensures a smooth flow of data and helps avoid operational silos.
Scalability
Special attention should be given to the flexibility and scalability of OMS. It should cope with the constant increase in the number of orders, the expansion of the product range, and the implementation of new sales channels. This is especially relevant for online businesses, where dynamic growth and unpredictable changes in demand have become the norm.
Multichannel support
It is desirable for the OMS to integrate with other ecommerce platforms. It should easily handle orders from online stores, marketplaces, mobile applications, and other online channels. This will ensure a consistent and unified approach to processing all orders.
Level of automation
Evaluate the level of automation provided by the OMS. The order management system should streamline order processing by reducing manual interventions and enhancing overall efficiency. Pay attention to features such as automated order routing, inventory updates, and order confirmation.
Reporting and analytics
Evaluate the reporting and analytics capabilities of the OMS. It should provide comprehensive information on order fulfillment, inventory levels, customer behavior, and other key metrics. Reliable reporting tools help analyze sales and avoid potential issues.
When choosing an OMS, it’s worth considering comprehensive solutions offered by order processing software like Ysell.pro. They include all the necessary tools for efficient ecommerce order fulfillment. The Ysell.pro order management system provides centralized management of all orders from various channels, offering a unified database. It easily integrates with popular platforms such as Amazon, Ebay, Shopify, Woocommerce, and more.
Users of the OMS system can easily track orders, manually adjust them if necessary, and leave notes with packing instructions. Integration with barcode scanners, automatic invoice creation, and warehouse configuration supported by Ysell.pro software can simplify and accelerate the entire order fulfillment cycle.
Conclusion
In the conditions of growing competition in ecommerce, it is more important than ever for businesses to use the order management system. A good OMS enables efficient processing of the growing volume of orders, reduces costs, and increases profits.
The capabilities of comprehensive order fulfillment software, including integration with online platforms, will allow you to expand your online presence and generate additional revenue streams. This is also an excellent opportunity to support omnichannel capabilities, which modern consumers expect from ecommerce companies.
By focusing on modern technologies and flexibility in order management, you can evolve and compete successfully in the dynamic online market.
