Everything you need to know about ecommerce order management
At first glance, ecommerce order management seems straightforward enough. An order comes in, you process it, ship it, and await a review from your delighted customer. How hard can it possibly be?
Well, as it turns out, it’s a bit more complicated than that.
In the competitive realm of ecommerce, customer expectations are sky-high, and your competition is only ever a click away. So, streamlining your processes and mastering the art of order management is essential if you’re to stand out in the crowd.
Ready to boost efficiency, delight your customers, and scale your operations all in one hit by upping your ecommerce order management game? Then you’ve come to the right place. In this handy guide, we’ll cover:
- An ecommerce order management definition
- A breakdown of the order management process
- The benefits of an efficient order management system
- The challenges of ecommerce order management and how to overcome them
- Features of the best order management systems
- How to choose the right system for your business
- Tips and best practices for exemplary ecommerce order management
Ready to get going? Then, let’s roll up our sleeves and get to work. Ecommerce order management mastery awaits!
What is ecommerce order management?
Ecommerce order management is the process that tracks, manages, and fulfills customer orders. Think of it as the brain behind your business, silently orchestrating everything from that first click to the moment a package lands on your customer’s doorstep – and beyond.
However, order management doesn’t operate in a vacuum. Rather, it’s an integral part of your entire ecommerce ecosystem that touches nearly every other aspect of your online empire. We’ll dig into each component in the next section. However, for now, here’s a list of the primary components:
- Order placement
- Order processing
- Inventory management
- Order fulfillment
- Shipping and delivery
- Post-purchase customer service
What is the ecommerce order management process?
As you’re probably beginning to see, the order management process extends way beyond the basics of the initial sale and delivery hustle. Let’s dig a little deeper into each component to help you master the entire sequence like a pro.
1. Order placement
A smooth order placement process is crucial, as it sets the tone for the entire customer experience. The journey begins when a customer places their order through your online store or marketplace. From a seller perspective, this step involves:
- Capturing the customer’s details
- Verifying payment
- Generating an order confirmation
2. Order processing
Order processing is the bridge between purchase and fulfillment, ensuring that the right products are ready to be shipped without delay. This stage includes:
- Confirming the order
- Checking inventory availability
- Preparing the order for fulfillment
3. Inventory management
Effective inventory management is critical because it helps prevent stockouts and oversupply issues by balancing customer demand with available resources. Essential functions include:
- Keeping track of stock levels
- Managing replenishments
- Ensuring that you have enough products available to meet continued demand
4. Order fulfillment
Speed and accuracy are equally important here because customers expect their orders to be fulfilled quickly and correctly every time. This stage covers:
- Picking the items from your inventory
- Packing them securely
- Preparing them for shipment
5. Shipping and delivery
A reliable shipping process can make or break the customer experience. So, even though you’ve technically already made your money at this point, it’s still a critical stage of the process. Your responsibilities include:
- Coordinating with carriers
- Providing tracking information
- Ensuring timely delivery
6. Post-purchase customer service
The order management process doesn’t end once the package is delivered. Providing excellent after-sales service is essential for building customer loyalty and encouraging repeat business. Post-purchase customer service includes:
- Handling returns and exchanges
- Answering customer inquiries
- Dealing with any other issues that arise
What are the benefits of an efficient order management system?
Investing in an efficient ecommerce order management system (OMS) can be a complete game-changer for your business. It’s not just about keeping the wheels turning. It’s about putting the pedal to the metal and driving your business forward with precision and purpose.
Here’s a list of all the ways an OMS can be the turbo boost your business needs to leave competitors in the dust
Improved customer satisfaction
At the heart of every successful ecommerce transaction is a happy customer. When your customers receive their orders as promised and with clear communication every step of the way, their satisfaction—and your reputation—skyrockets.
Fun fact: 73% of shoppers say the customer experience is a key factor in their purchasing decisions. So, when you consistently deliver on your promises, you’re not just making sales—you’re building a fan base of delighted customers who are more likely to become repeat buyers.
Reduced errors and delays
We’ve all had our fair share of those gut-wrenching moments when we realize a mistake has been made. But with an OMS handling the nitty-gritty details, you can breathe easy. The result? Fewer “oops” moments and way less nail biting!
By automating repetitive tasks and streamlining operations, you can slash manual errors and costly delays. In fact, 50% of organizations believe that automation reduces or eliminates the chances of human error. Now that’s something to smile about!
Better inventory management
Inventory management is the ecommerce equivalent of walking a tightrope. One misstep, and you’re either tumbling into the abyss of stockouts or teetering on the edge of an unsellable pileup. An efficient OMS keeps your inventory in check by balancing stock levels in real time so you never miss a beat.
What does that mean for you? Fewer frantic emergency reorders, less capital tied up in overstock, more time and resources to spend on other growth areas, and much less pressure on your overworked coffee machine!
Increased efficiency and productivity
We’re all aware of the old saying, “Time is money.” An OMS helps you save both by embracing that other well-used mantra: “Work smarter, not harder.”
By automating and optimizing various aspects from processing to fulfillment, you can streamline operations, boost productivity by 15-25%, and turn orders around faster than you can say “free shipping.” Talk about getting more bang for your buck!
Enhanced scalability for business growth
As your business scales, so does the challenge of managing orders. But with an OMS in your corner, you’re ready to tackle anything that comes your way. Whether you’re expanding into new markets or launching new products, a system that grows with you ensures you’re always on the right track.
Need further proof that a solid OMS is the backbone of business expansion? Research shows companies with effective order management processes are 2.5 times more likely to hit their growth targets. Hello, profitability!
Data-driven insights for continuous improvement
While dealing with data may not be everyone’s cup of tea, it’s non-negotiable in today’s fast-paced ecommerce world, and the most successful businesses learn to harness its power—typically, using an OMS.
With detailed analytics and reporting, you can make more informed decisions, drive continuous improvement, refine your processes, and stay ahead of the competition. And the best part? It all happens with just a few clicks—no data degree required!
What are the biggest challenges in ecommerce order management, and how does an OMS overcome them?
Even the most seasoned ecommerce businesses need help with order management. From dealing with fluctuating inventory levels to handling returns, the complexities can pile up fast. But don’t worry—this is where an order management system becomes your best ally.
Let’s dive into some of the most common challenges and how an efficient OMS helps you overcome them.
Inventory inaccuracies
The problem
Keeping tabs on constantly shifting inventory can feel like herding cats. One moment, you’re flush with stock; the next, your best-sellers have vanished into thin air. Whether you’re facing overselling disasters or stockout nightmares, your reputation and bottom line will both be on the chopping block.
The solution
Order management systems provide real-time inventory tracking to ensure accuracy across all channels. With automated updates and reorder point setting, you’ll always know precisely what’s in stock and have your next shipment locked and loaded. So, there’ll be no more of those dreaded “sold out” notifications after a customer has already placed an order.
Handling returns and exchanges
The problem
Unfortunately, returns are a fact of life in ecommerce. But that doesn’t make them any less of a headache. Processing them, issuing refunds, and restocking items can quickly become a head-spinning logistical nightmare.
The solution
OMSs streamline the post-sale process, making it easier to track returned items, issue refunds promptly, and update inventory. The result is a smoother experience for both your customers and your team, with the added potential for turning customer pain points into opportunities to impress!
Coordinating with multiple sales channels
The problem
Selling across various online marketplaces in addition to your own website and social media channels is great for reaching more customers. But it’s also complicated. Coordinating sales, inventory, and fulfillment across every channel simultaneously is almost impossible without a software sidekick.
The solution
The best OMD solutions integrate all your sales channels into one streamlined hub. This unified approach makes coordination a snap, ensuring that orders from every channel are processed with maximum efficiency and minimum fuss.
Managing shipping logistics
The problem
Shipping might be the final leg of the order journey, but it’s often the trickiest. From coordinating with multiple carriers to juggling shipping costs and nailing delivery times, it’s a maze of potential headaches from which no aspirin can save you.
The solution
Handing over the reins to an OMS allows you to automate shipping processes, compare carrier rates, and keep customers in the loop with real-time tracking information. Not only does this lighten the load on your team. It amps up the customer experience by ensuring packages land on their doorsteps right on time, every time.
Dealing with high order volumes during peak seasons
The problem
Peak holiday seasons can be a double-edged sword. While the sales surge is great, it also puts a sledload (sometimes, quite literally) of pressure on you and your team. A flood of orders combined with a new wave of temporary staff can easily lead to delays, mistakes, and unhappy customers.
The solution
A robust OMS is built to handle scalability, allowing your operations to expand seamlessly as demand spikes. Automated processes, real-time updates, and optimized workflows mean that even when orders and staffing requirements surge, you can handle volume without compromising quality or speed.
Features to look for in an order management system
Ready to choose your secret weapon (AKA your new OMS) and rock ecommerce order management like never before?
You might already have an inkling of the features you need to shoot for the stars, but let’s make sure you’re fully locked and loaded. Here’s a quick rundown of the must-have features that will keep your operations humming along like a well-oiled machine:
- Real-time inventory tracking
- Integration with multiple sales channels
- Automation capabilities
- Analytics and reporting tools
- Customer communication tools
- Scalability and customization options
How to choose the right order management system for your business
Selecting the right OMS is like assembling the ultimate tool belt—you need the tools that suit your purposes right now and all the little extras that will help you tackle additional challenges that come your way further down the line.
Here’s a few tips and best practices to ensure you make the right choice.
How to assess your business needs
Don’t go all gung ho or make a snap decision before you’ve taken the time to step back and identify your must-haves. Here are the questions you should be asking yourself to narrow down your list of options:
- Do you need to integrate with multiple sales channels?
- What’s your current and expected order volume?
- Do you need to manage inventory across multiple warehouses or locations?
- How critical is integration with your existing ecommerce tech stack?
- Do you require specialized reporting or analytics?
- What is your ideal budget?
How to evaluate OMS providers
Not all OMS providers are created equal. So take the time to compare different systems, considering factors like price, ease of use, customer support, and integration capabilities:
- Cost: Does the price fit your budget, and is it a good value for the features you’re getting? Oh, and don’t forget to do your due diligence and factor in any hidden fees.
- Ease of Use: Your team should be able to hit the ground running, and a complicated system will only slow you down. So, look for an OMS that’s intuitive and user-friendly.
- Support: When something goes wrong (and let’s face it, it will), you want a provider that offers top-notch customer support. Make sure help is just a call or click away.
- Integration: Your OMS should play nicely with the other tools in your tech stack. At a bare minimum, it should integrate with your ecommerce platform, CRM, and any other essential systems.
Top tip: When doing your research, don’t just take the information you’re given at face value. Be sure to check out user reviews and case studies to see how each option performs in the real world.
Best practices for exemplary ecommerce order management
Once you’ve got the know-how and the right technology in place, the sky is the limit! But, precisely how do you go about transforming your ecommerce order management processes from ordinary to exceptional?
Let’s examine some of the specific ways you can make the most out of your investment.
Implement accurate inventory tracking
- Use stock forecasting features to eliminate guesswork and set re-order points that meet that Goldilocks ‘just right’ standard, whatever the season.
- Implement a Just in Time (JIT) Inventory strategy to minimize excess warehousing costs.
- Integrate periodic inventory audits to ensure your digital inventory matches your physical stock.
Optimize order processing workflows
- Automate invoicing and order confirmations for fast, error-free order processing.
- Sync with your warehouse management system to streamline picking and packing processes.
- Configure your OMS to prioritize high-volume or high-value orders, ensuring your most important shipments are processed and shipped first.
Streamline shipping and fulfillment processes
- Compare shipping rates across multiple carriers, selecting the best option based on cost and delivery speed.
- Automate shipping label creation.
- Enable real-time tracking to keep your customers informed at every stage of the delivery.
Utilize data and analytics for continuous improvement
- Utilize reporting tools to identify peak order periods and adjust staffing and resources to meet demand.
- Monitor how long your process takes from order placement to fulfillment, identify bottlenecks, and implement further optimizations to improve speed and efficiency.
- Regularly analyze customer feedback to spot trends and areas for improvement.
Ensure excellent customer service at every stage
- Integrate your OMS with your customer service platform to manage inquiries from one centralized dashboard.
- Automate follow-up emails to check in on customer satisfaction and encourage repeat business.
- Simplify the returns processing by issuing return labels directly from your OMS.
Master ecommerce order management with Linnworks
Ready to take your ecommerce order management strategy to the next level? Follow these action points to see how we can help and get ready to supercharge your operations. Together, we’ll make sure your online enterprise is on the fast track to success.
- Learn more about Linnworks order management software.
- Get a free demo to see how our systems can help simplify your existing processes.
- Take an interactive product tour to discover how easy it is to sync your inventory and automate fulfillment routing.
- Contact our team with your questions for expert advice tailored to your unique business needs.
