What is an order management system (OMS) in ecommerce?
An order management system (OMS) is a digital tool for managing an order’s lifecycle. It keeps track of all data and processes, such as order entry, inventory management, fulfilment, and customer care. Both the retailer and the buyer benefit from the visibility provided by an OMS. Customers can verify when an order will arrive, and businesses can have near real-time inventory visibility.
What is order management process?
The back-end process for managing and fulfilling online orders is known as eCommerce order management. Everything from order routeing and shipping label printing to refunds and subscription administration is covered.
Automation and integration are provided by order management systems (OMS) at every stage of the order journey. This enables brands to provide consistent consumer experiences across all channels at scale. Operators can use eCommerce order management systems to manage orders coming in from different sales channels and leaving using multiple fulfilment points. It streamlines service provider automation and consolidates data into a single interface.
Do I need an order management system?
There are a few key indicators that you need an OMS.
1. You can’t scale to meet peak demand
You’re in trouble if you’re manually processing orders or if your systems are siloed and can’t communicate with one another.
An OMS can automate procedures and workflows, allowing orders to be processed more quickly and delivered to customers sooner.
2. Lack of supply chain visibility is holding you back
Do you know the quantity and location of all of your stock? Where are your customers in relation to your distribution centre/s? A single, central hub for your sales, orders, inventory, and fulfillment is essential for any sort of automated fulfilment workflows, customer service, customer communications, and reporting.
An OMS displays every order from every channel, providing total visibility to all stakeholders.
3. Manual work. Human error. Tediously slow order lifecycle
Buying online does not provide the same level of immediate enjoyment as shopping in a store. Consumers anticipate their purchases as soon as they are made. They’re checking their emails every day for shipping confirmation and then waiting for their package to arrive. You risk losing consumers if your order processing time is slow (manually processing orders, correcting any errors, etc.).
An intelligent order management system automates activities and workflows, expediting the delivery of an order to the consumer.
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Why is an order management system important?
There are countless advantages to using an OMS system.
1. Order Accuracy Improvement
Order fulfilment without an OMS is a dangerous business. Manually processing orders with spreadsheets exposes you to human error. Human error from manual process management is the root cause of inventory or fulfilment issues for 62 percent of merchants.
This not only ruins consumer experiences (especially if the wrong product is shipped to the wrong customer), but it also causes logistical difficulties. The number of returns you’ll have to process skyrockets, as does the amount of money you’ll have to spend rectifying orders that are incorrect.
2. Process orders from start to finish faster
While delivery costs are still important to modern customers, the time it takes for a product to move from order to delivery is crucial. When shopping online, 43% of customers expect next-day delivery, which retailers must achieve in order to attain repeat customers.
By verifying stock across all your warehouses, an OMS can streamline the picking and packing process. It locates the closest fulfilment centre with available inventory to the consumer. It sends order information to that location immediately so that the goods can be chosen, packed, and dispatched ASAP.
3. Happy customers are informed customers
Shipping is a sensitive topic for today’s consumers. Customers value more than just the timing of their purchase fulfilment. Customers want to know the status of their order, including its present location and expected delivery date, in 97 percent of cases.
Merchants can use an OMS to assist them in satisfying these requirements. When customers request an update on their order (or return), most platforms will offer built-in tracking sites.
It’s this kind of openness that keeps customers from posting bad reviews all over the internet. TrustPilot reported that 77.4% of all negative reviews are caused by a brand’s lack of communication after the sale.
4. Fulfilment on a global scale
The worldwide ecommerce market is estimated to be worth $4.5 trillion because customers from all over the world can shop at ecommerce stores. Their sole restriction prior to an OMS was the processes required to accept and fulfil overseas orders.
Order management software aids ecommerce enterprises in expanding their global reach. With an OMS, retailers can:
- Accept payment in a variety of currencies for overseas orders.
- Send order details to 3PL partners in each country automatically.
- Reduce shipping timing and costs by routing to the customers nearest warehouse
How does an OMS work?
An order management system collects orders from all of a company’s sales channels and consolidates them in one location (OMS). A corporation selling on Shopify, Amazon, eBay, and in a physical store, for example, may access, manage, and fulfil all of their sales orders with a single login interface.
This makes managing the order process a lot easier. Rather than logging into each individual sales channel or POS system, everything can be managed from start to finish in one place.
There are four main pillars covered by an OMS:
- Orders – Managing sales from all channels on a single platform.
- Inventory – synchronisation in real time across all channels, as well as accurate forecasting to avoid stock-outs.
- Fulfilment – Streamlining picking, packing, and warehouse operations, as well as interfacing directly with shipping providers.
- Returns – Providing a single location for your team to complete returns from beginning to end, as well as book-in returned merchandise to your warehouse inventory.