How an Order Management System (OMS) Works

An order management system can streamline and automate your order processing.

When a customer orders a product, they expect to receive that item quickly and efficiently. As a seller, it’s your job to fulfill that order and ensure it arrives in one piece (literally).

That said, fulfilling and tracking orders can be a massive hassle. How can you streamline this process? Many sellers have started using an order management system (OMS) to create customer orders and process them in one place. 

Modern OMS systems utilize automation to streamline fulfillment further, saving sellers a significant amount of time. But how can you rely on an OMS to streamline the supply chain and fulfillment process?

 

What is an Order Management System?

An OMS software controls an ecommerce order throughout its entire lifecycle. After a customer places an order, the data is transferred to the OMS, where it will follow every step of the fulfillment and shipping process. 

Sellers can also use an OMS for other tasks, such as inventory management and post-sales activities.

There are many reasons why sellers will want to invest in an OMS. These systems ensure accuracy in the supply chain, allowing buyers to track the status of their orders.

Related content: Warehouse Management Options

 

How an OMS Works

Here are a few things you can expect from an ecommerce order management system:

• Placing the order. Your OMS will connect to a form that customers fill out when placing their order. This form is automated and will be processed immediately after payment is made.

• Fulfillment. At the warehouse, employees can see the products in the order, customer information, and shipping details. All the warehouse employees need to do is pick, pack, and ship the order.

• Inventory management. The OMS can also monitor your inventory levels and notify the seller when stock is running low or must be liquidated. Some OMS platforms can forecast sales and trends and adjust accordingly for busy seasons.

Benefits of an Order Management System

An OMS offers advantages at every stage of the supply chain. Here are the most essential benefits to consider.

 

Manage Orders Better

An order management system typically operates in cloud environments, allowing it to work virtually and connect to various platforms. 

Sellers can easily search for orders, check their status, and contact the customer in one place. Since OMS systems are automated, sellers will receive an alert if any issues arise. 

An automated order management system also includes analytics and metrics to ensure a stellar fulfillment performance. This is why an OMS can manage orders better than manual processes.

 

Automation

An order management system for ecommerce includes automation, which means the system handles various tasks independently. Some of these automated capabilities include inventory management, routing, and shipping. This reduces manual labor and enhances accuracy.

 

Efficiency

Since an order management system can integrate with and manage multiple channels, it’s a more efficient system than manually performing these tasks. Plus, OMS systems can track and update your order status in real-time, eliminating guesswork for both you and your buyers.

 

Product Management

When you set up your OMS, you can upload all your SKUs into the system. Your OMS will do more than manage your inventory; it can also optimize your product catalog and identify opportunities to bundle items, ultimately maximizing sales.

 

Seamless Integration

There are numerous OMS options available, and most integrate with the largest ecommerce and fulfillment platforms. If you have a multi-channel strategy, you can utilize your OMS to integrate your existing sales and warehousing platforms.

 

Sales Forecasting

Many OMS platforms use predictive analytics to forecast sales and trends. 

Predictive analytics is a type of machine learning that analyzes past sales data to predict future outcomes, such as busy seasons. As a result, you can optimize stock levels and access automated replenishment, establishing better relations with vendors.

 

Shipping Tracking

One of the biggest benefits of an OMS is its ability to track shipments. Many platforms set an estimated delivery date and track the fulfillment process to ensure the order arrives by that specific day. If any issues arise, sellers can access a suite of tools to discover the problem and find a solution.

 

Insights

Since an OMS aggregates data across every step of the supply chain, it can provide insights into your entire selling process. 

Most OMS platforms track various sales metrics, such as average order value and order defect rate. OMS systems offer reports, allowing sellers to view a comprehensive picture of their performance.

 

Order Management System Tips

Sellers will only benefit from an OMS if they optimize it to meet their specific needs. Here are some tips to maximize the use of your order management system.

• Prioritize scalability. Find an OMS that allows you to scale when needed and that will adapt to your evolving needs.

• Train your staff. OMS platforms can be highly technical, so invest in ongoing training for your employees to ensure they understand all the nuances in your system.

• Consider your existing platforms. Evaluate all the channels you currently use for the most powerful omnichannel strategy. This can include your online store, third-party marketplaces, POS, and social media channels. Find an OMS that integrates with these channels to ensure seamless order processing and fulfillment.

• Optimize inventory management. Automated inventory management is one of the most impressive capabilities of an OMS. Optimize this even further with real-time inventory tracking and stock level monitoring.

• Custom reporting. Every business is different, so identify the metrics that are most beneficial to you and leverage your OMS to create custom reports. These metrics can include inventory turnover, sales trends, customer satisfaction, perfect order rate, and fulfillment accuracy.

• Update your platform. Most OMS systems will update automatically; if yours doesn’t, subscribe to update notifications to take advantage of new features and other improvements. 

• Customer experience. Utilize your OMS to benefit your customers, such as offering sustainable packaging options, reducing order errors, streamlining returns and exchanges, and providing various shipping options.
• Stay compliant. Your OMS should comply with all data protection laws in regions where you operate. It should also maintain data privacy, including safeguarding your customers’ information.

The Best OMS Platforms

Do you own an eCommerce business and are looking for the best OMS systems? Here are the ones we recommend:

• Extensiv. If 3PL control is what you’re looking for, Extensiv should be your choice. This platform can automate order processing and integrates with several sales channels and 3PL systems.
• Shippo. Shippo is one of the most recognizable names in the shipping industry. It features a robust API that automates many fulfillment processes. Sellers can do several tasks in one place, such as creating labels and managing shipping. Shippo integrates with numerous platforms to centralize fulfillment.
• Shopify. While Shopify is an overall ecommerce platform, it includes multiple tools and apps to enhance the functionality of your online store. That said, Shopify has order management tools to streamline processing and fulfillment. Some of these tools have more features than others, such as custom reporting.
• Salesforce Commerce Cloud. If you have a Salesforce CRM, you can add their Commerce Cloud function to handle order fulfillment. Salesforce Commerce Cloud is packed with features like omnichannel inventory management, pre-built fulfillment flows, and order support.
• Veeqo. When shipping on Veeqo, sellers can pay lower shipping rates and pass those savings onto buyers. Veeqo also includes additional tools, such as order routing and inventory management.

 

Is an Order Management System Right for You?

An order management system will streamline your entire supply chain. This type of software tracks an order throughout its lifecycle, ensuring there are no issues during fulfillment and shipping.

While an OMS system is a powerful tool, it’s not a seller’s only option. Sellers can also partner with an eCommerce agency that can create a high-level selling strategy.

Author

Stephanie Jensen has been writing ecommerce content for seven years, and her copy has helped numerous stores rank on Amazon. Follow her on LinkedIn for more insight into freelance writing and creating high-quality content.

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