Order Management System: How an Order Management System can Help Your Business

An Order Management System (OMS) is a system that retrieves orders from various sources and syncs them in the correct order. An OMS is a critical and crucial tool to smoothly and efficiently complete your daily eCommerce fulfillment operations, as well as provide a great customer experience. Furthermore, mastering your entire order fulfillment process can significantly improve your customer retention rates. After all, a more efficient order management approach helps maintain customer satisfaction while also increasing your bottom line.

What is Order Management?

Order management, also referred to as order fulfillment, includes everything from tracking incoming orders to managing the operations required to complete them. While some online retailers believe that the order management process ends once the order is shipped, a strategic approach always includes the after-sales experience as well as eCommerce returns and refunds management.

Order management, in a nutshell, consists of order fulfillment, picking, packing, and shipping, as well as after-sales support and dealing with eCommerce returns and refunds. A workflow for order management assists your employees in coordinating tasks and synchronizing inventory data across multiple systems.

Why OMS is Important for Growing eCommerce Businesses?

As your company grows and order volume increases, it becomes increasingly difficult to manage all orders without the assistance of automation or some sort of system in place. Here are just a few of the reasons why modern eCommerce businesses must implement order management automation.

Workflow Automation Saves Time

Automation boosts productivity and reduces costs while also ensuring orders are accurate and delivered on time, resulting in a positive customer experience.

Connect Your Sales Channels

It's challenging to manually manage multiple sales channels and process orders using spreadsheets. An Order Management System connects all of your sales channels, including marketplaces such as Amazon, eBay, BigCommerce, Magento, and OTTO, as well as direct-to-consumer (DTC) channels such as Shopify, WooCommerce, etc.

Simplify the Return Process

Customers expect a clear return policy and ease of returning a product. Order management automation facilitates returns.

How Are Orders Handled by Online Retailers?

Back in the day, most retail companies used manual processes to manage and fulfill orders. Even today, paper-based processes are not uncommon. These time-consuming tasks pose a high risk of lost orders, frustrated customers, and revenue loss. Manual processes have many unforeseen mishaps that can cause irreversible damage to any business.

It is critical to automate and streamline this process when scaling an eCommerce business today so that you are better prepared to deal with an influx of orders. With a solid inventory and order management system, this is possible.

Types of Order Fulfillment

Fulfilling orders is a huge undertaking, one that grows in size and complexity as the volume of your orders grows. To begin, you must decide the way you will fulfill your orders.

Three ways to fulfill orders:

• Self-fulfillment: The self-fulfillment approach is precisely what it sounds like regarding order fulfillment: you fulfill your orders and have complete control over everything from inventory storage to picking, packaging, and dispatching.

• Third-party fulfillment: A third-party fulfillment service is another option. When it comes to logistics, it is common to outsource to a 3PL (third-party logistics) firm:

  • When picking, packing, and shipping orders is too time-consuming.
  • When there is not enough inventory storage space.
  • When more time must be made available to concentrate on other parts of the business (e.g., marketing).
  • When you do not want to handle your distribution system.

• Dropshipping: Dropshipping is a method of online selling in which the retailer does not own the items they sell.

What is Order Processing?

Order processing is a stage in the order management process that entails selecting orders, packaging them, and delivering them to a shipping carrier. It is a step-by-step procedure that includes:

• Order selection (taking and collecting items to fulfill orders)
• Sorting (separation of items according to destination)
• Packing (includes weighing, labeling, and packing)
• Consolidation (gathering packaged orders into loading units ready for transportation)

Order Picking

The order picking technique, as the name suggests, is locating and gathering products within a warehouse in a specific number ready to fulfill your customers' demands, and it is a component of the overall order management process.

Because order picking has a substantial impact on supply chain productivity, it is one of the most closely scrutinized logistical activities inside of an eCommerce business.

There are multiple ways of order-picking, which include:

• Piece picking: Picker to part (also known as piece picking) is a picking method in which the order picker moves to collect the components needed for a single order. This is also known as selecting a single order.
• Batch picking: Each order picker is given a batch that contains a large number of orders. They then enter the warehouse and retrieve all of the orders at once before returning them to the packing counter.
• Zone picking: Each order picker is allocated to a certain warehouse region and only chooses products from that zone. If an order includes items from many locations, they will be consolidated at the warehouse's packing bench.
• Wave picking: All order pickers, like zone pickers, are assigned a territory from which to collect the merchandise. Each picker will gather many orders at the same time and transport them to a central packing station. A professional packer will then package the goods, while the order pickers continue to collect items from the warehouse shelves.
• Sorting Systems: The choosing strategy of a sorting system requires essentially no movement on the part of any order picker. Instead, an automated device such as a conveyor belt or automatic storage transports the products to the packing table.
• Pick-to-box method: The pick-to-box method follows the same logic as sorting systems, except that when an item is selected, it is instantly placed into a packing box.
• Automated warehouse picking methods: Other automated warehouse picking methods include picking to light, which involves an order picker following lights in a warehouse to seek certain products, and mobile scanner-based picking.

What is Order Packing?

Order packing, as the name implies, is a component of order management that entails packing all essential products from a single order into an appropriate box or package before shipping it to the customer.

Order packing entails choosing appropriate packaging, weighing the final parcel, printing relevant labels and invoicing, and deciding on a courier to execute delivery.

For a variety of reasons, the packing process is crucial and is frequently done within a warehouse at a central location known as a packing area or packing bench:

• Prevent the products from being damaged during delivery.
• Cost-efficiency
• Improve brand identity (e.g., personalized packaging)

Shipping and Delivery Process

Before you can ship your products to customers, you must first decide on your shipping pricing strategy and delivery options. Consider the following eCommerce shipping strategies:

• Free shipping: Offering free delivery is one of the most effective ways to reduce shopping cart abandonment.
• Real-time carrier rates: Consider using platforms that interact in real-time with many carriers to provide delivery options and live pricing, allowing clients to choose and pay for the service they want.
• Flat rate shipping: When a single rate is applied to a package, regardless of size or weight, it is referred to as flat rate shipping. It's a simple technique to make shipping easier for your consumers and can boost revenue.
• Expedited shipping: Expedited shipping refers to the procedure of sending a package at a faster-than-usual rate. What is considered expedited is largely determined by your company's policy.
• International shipping: You must also decide whether or not to offer your customers international shipping. This can be challenging because you will most likely need to compute different shipping prices for each country to which you wish to sell items.

To get you started, here's a list of some well-known courier services:

• Royal Mail
• Hermes
• DPD
• Parcelforce
• Yodel

Post-Purchase Experience

Providing an excellent after-sales experience is crucial for customer retention, and many large online retailers include it as part of their entire fulfillment strategy. There are several ways to improve your customers' post-purchase experience:

• Consider sending a thank you message along with a purchase verification email.
• When the product is dispatched, sending an email to the customer can increase engagement.
• It's a good practice to follow up with customers for feedback and if there is anything that needs to be improved.
• To encourage continuous purchases, a discount can be offered.

Returns and Refunds in eCommerce

Handling eCommerce returns and refunds is the final step in the order management process. Your return path must be specified and documented for your team to follow. You should brief your team on the exact rules and regulations your business follows. For example, your team should be briefed on these:

• How will you deal with returns?
• Will a returns label be included with each order?
• Would you rather your customers ask for returns?

Conclusion

Finally, optimizing your eCommerce order management will assist you in streamlining your business procedures, increasing client satisfaction and retention, and boosting profitability. An Order Management System is critical to the success of your eCommerce business. By mastering your entire fulfillment process, you can improve customer satisfaction and retention rates while also increasing your bottom line.