Managing orders is a fundamental part of any online retail business, but it’s not always a simple process. Everything from customer satisfaction to your bottom line can be affected by order management. With a streamlined approach, you can ensure your operations are smooth and efficient and avoid the headaches of missed sales, delays and upset shoppers.
Having control over your orders is more important than ever. Customers and businesses are fragmented across websites, marketplaces, social media and other channels, which adds complexity to your orders. You need a multichannel presence for shoppers to find your products, and you need to do this while also managing your other responsibilities.
Learn why order management is important, how to streamline your processes and how to provide a great experience for your customer.
What is order management?
Order management, also known as order fulfillment, refers to everything from tracking incoming orders to managing the processes required to fulfill each of them. Your customer’s experience doesn’t end once the order is shipped, and your online order management process shouldn’t, either. Take a strategic approach by including the after-sales experience, including returns and refunds.
Order management workflows can coordinate tasks among your staff, and synchronize inventory data between systems. This can cover such areas as order placement, picking, packing and shipping, as well as customer satisfaction.
Why is order management important for ecommerce?
As your business grows and order volume increases, it’s difficult to keep up with managing all orders manually. Here are some of the reasons why ecommerce management tools are important and how order management automation benefits high-volume ecommerce websites.
Automated systems can be especially useful for ecommerce businesses experiencing rapid growth. After a customer places an order, these systems immediately go into action, which increases productivity and avoids the wasted time and additional errors associated with manual processes.
Integrates sales channels
Managing multiple sales channels simultaneously is especially difficult when you’re doing it manually through spreadsheets. An order management system (OMS) connects all of your sales channels, including marketplaces such as Amazon, eBay and Walmart and direct-to-consumer channels like Shopify.
Customers expect a transparent and easy returns policy. Order management automation ensures that returns are seamless. For example, an order management system can automatically print return labels for customers or select a return address for the warehouse closest to the customer. These systems can help customers not only track online orders but also track returns.
Additionally, order management systems can track stock levels across multiple locations, analyze order data across multiple sales channels and coordinate with third-party logistics providers. Essentially, order management systems help businesses be more efficient while providing better customer service.
What are your options for order fulfillment?
Ecommerce sellers have a few options for fulfilling orders. There are three main types of order fulfillment:
- Self-fulfillment: This model requires you to fulfill your own orders, taking care of everything from storing inventory to picking, packing and dispatching.
- Third-party fulfillment: Using a third party can save your company time with fulfillment and reduce the need to store as much inventory.
- Dropshipping: This approach routes orders directly to your manufacturer when customers place orders. The manufacturer handles fulfillment on your behalf.
What are the steps of order processing?
Order processing is a sequential procedure that encompasses order picking, packing and the delivery of items to a shipping carrier. This process starts with taking and collecting items to fulfill orders, sorting them according to destination, and packing and consolidating them into loading units.
The order picking process consists of locating and collecting products within a warehouse to fulfill orders. This step sits within the overall order management process. Order picking is one of the most controlled logistics processes in an ecommerce business. There are several ways to tackle it.
- Piece picking (or picker to part) is a picking method where the order picker simply moves to collect the items needed for one order. This can also be referred to as single-order picking. Use this method for large volumes of inventory with small quantities per pick and short cycle times.
- Batch picking is when each order picker is assigned a batch of orders. They enter the warehouse and pick these orders in one go, returning the items to the packing desk. This is a faster strategy that can be used to reduce warehouse travel time for pickers.
- Zone picking involves assigning each order picker is a specific area within the warehouse and only picking products from that zone. You can use zone picking in combination with other strategies in large warehouses for additional efficiency.
- Wave picking is similar to zone picking, but all order pickers are given a specific area to collect items from. Each picker will gather several orders at once and take them to a central packing bench. You can organize orders into groups based on criteria such as warehouse location or shipping details.
- Sorting system is a picking method that requires little or no movement from order pickers. Instead, the items are brought to the packing bench via an automatic system, such as a conveyor belt or automatic storage.
- Pick to box method follows a similar approach as sorting systems, but when an item is picked, it is placed straight into a packing box. Pick to box and sorting systems can each be used to expedite orders.
- Pick to light is a type of automated system whereby an order picker will follow lights in a warehouse to find certain products.
- Mobile scanner-based picking is also an automated approach that guides employee actions and ensures accuracy and tracking.
Order packing consists of placing every item in an order into an appropriate container before shipping to the customer. This process involves the selection of suitable packaging, weighing the final parcel, printing out relevant labels and invoices, and selecting a courier to complete the delivery.
Order packers are the last people to see and touch your products before shipping, making them a crucial checkpoint for spotting simple errors such as incomplete orders, damaged products or mistakes in counts, stock-keeping units or shipping labels.
What are your shipping and delivery options?
Before you can ship products to customers, you’ll need to decide on your pricing strategy for shipping and define what shipping methods your business will use.
There are a variety of ecommerce shipping strategies to choose from, including:
- Free shipping. This option keeps your business competitive and is a great way to reduce shopping cart abandonment. Start by determining how you’ll incur the resulting costs, such as paying out of your own margins or increasing product prices.
- Flat-rate shipping. This option offers shipping at one price, regardless of order size or weight. It’s an easy way to simplify shipping for your customers and can encourage sales.
- Expedited shipping options. These are add-ons that can vary by business, but standard options include two-day, next-day or same-day delivery service.
- Real-time platforms. This option covers platforms that integrate in real time with multiple carriers to generate shipping options and live pricing — allowing customers to choose and pay for the service that they want.
If you’re selling online internationally, you’ll also need to research the costs and requirements associated with foreign locations. After you’ve selected your shipping strategies, it’s time to figure out how to calculate your shipping costs. Many elements can affect shipping costs, including package dimensions, weight, destination, shipping service, shipping carrier and total value of the order.
How do you manage the post-purchase experience?
Creating an effective after-sales experience is crucial for customer retention, and it’s a sometimes-overlooked component of order management.
Generally speaking, ecommerce retailers should aim to send a minimum of three confirmation emails — when the order is placed, when it’s on its way and when it’s been delivered. Each of these touch points presents an opportunity to offer personalized messaging or offer incentives toward further purchases.
You should also be ready for negativity in the after-sales experience. Monitor social media and respond to reviews, especially if they’re critical. Have a plan to take care of your ecommerce platform’s returns and refunds. Define your route to return and ensure that you document it for your staff and customers through an official returns policy.
Perfect your order management to boost business growth
When you improve order management, you’ll streamline business processes, improve customer support, which will support higher rates of customer satisfaction, customer retention and profitability. Order management software can easily automate these processes and enable your business to scale. After you’ve streamlined your order management process, review it on an ongoing basis to find new ways to improve your efficiency in your business and marketplace operations.
Interested in learning more about how a modern order management system can help your business become more efficient? Discover how Rave Coffee used Linnworks automation capabilities to increase their orders 100%!