An illustration showcases the steps of e-commerce order management, including order fulfillment and delivery.
Running a business

E-commerce order management

What is e-commerce order management?

E-commerce order management is a process used to help manage, track, and fulfill online orders from initial purchase to final delivery.

As someone who runs an e-commerce business, the last thing you want is for your customers to be dissatisfied. 

Whether it’s a delayed shipment due to low inventory or a confused customer that never received an order confirmation, issues can arise due to poor e-commerce order management.

On the other hand, you can leverage e-commerce order management systems to help streamline the online ordering process, allowing you to spend more time growing your business and less time manually monitoring every order.

Follow this introductory guide to learn more about how e-commerce order management works, its challenges, its importance, and the systems you can use to help improve your e-commerce order processes.

How e-commerce order management works

A graphic lists the eight steps of how e-commerce order management works.

To put it simply, e-commerce order management is the process of tracking an online order from its initial purchase to its final delivery to the customer. Throughout this process, data is collected at each stage of the order fulfillment process, providing beneficial information for your business and customers.

E-commerce order management may include everything from printing shipping labels to accepting customer payments. While the exact e-commerce process can vary from business to business, most e-commerce businesses follow a process similar to this:

  1. The customer places an order.
  2. The business enters the order into its system.
  3. The customer receives an order confirmation notification.
  4. The business passes the order along to its fulfillment location.
  5. An employee picks and packages the order.
  6. The business ships the order to the customer.
  7. The business informs the customer of the shipment.
  8. The order arrives.

In addition to their order, customers may also receive specific contact information or instructions to follow if they are unsatisfied with their order. The fulfillment process can also include an option for customers to leave a review—a helpful feature, as feedback can help attract other customers and help you improve your customer experience.

Challenges of e-commerce order management

As with anything, e-commerce order management can come with challenges. From struggling to keep up with changing inventory levels to locating a lost package, keeping an eye on all of your orders can be a difficult task.

On top of that, order management affects each stage of your e-commerce business, from purchase to delivery. Because of this, the difference between good and bad order management can lead to either a positive or negative experience for your customer.

In the past, e-commerce order management could be an especially tedious process, from manually emailing each customer to updating spreadsheets after every order. Fortunately, e-commerce order management systems (OMS), aka e-commerce order management software, exist that can help you streamline e-commerce order management and automate business processes.

But even with these systems, your business may still run into adoption challenges, including:

  • Difficulty of choice: Whenever you’re looking to make a decision for your business, you’ll want to feel confident that you’re making the right decision. Because of this, some people may struggle to decide which OMS to go with.
  • Cost: Order management systems can vary in price, with some offering free plans to others costing hundreds of dollars per month.
  • Implementation difficulties: For some business owners, implementing a new system may seem difficult. To help reduce difficulties, do your research and ensure that the OMS can integrate with the e-commerce platform and other order management tools you already use.

With these minor challenges in mind, let’s move on to the importance of efficient e-commerce order management and its powerful benefits for your business and customers.

Importance of e-commerce order management systems

A graphic showcases the benefits of using e-commerce order management systems.

Now that you understand what e-commerce order management is, you may wonder what e-commerce order management software can do for you and your customers. The use of an OMS can provide many benefits, including: 

  • Increased efficiency in fulfillment times: By utilizing an e-commerce OMS, you can help minimize delays in e-commerce order processing and use integrated e-commerce shipping services to help automate tasks and eliminate human error that can occur when you do everything manually. That way, your customer can receive their order faster with a reduced risk of delivery issues.
  • Ensure inventory level accuracy: Many OMS also include or integrate with inventory management software, allowing you to tap into real-time inventory data. By getting a bird's-eye view of your inventory across sales channels, you can get an accurate measurement of your inventory without having to worry about manually keeping track of it yourself.
  • Improved customer experience: Because order management software for e-commerce can lead to quicker order fulfillment times, it can help you get your products to your customers even sooner. Many OMS also offer the ability to provide your customers with live shipping updates and tracking features, keeping them informed every step of the way.
  • Central place to manage returns: With an e-commerce OMS, you’ll have a central place to facilitate and manage returns, from issuing return shipping labels to tracking the products as they return to your warehouse. This will make things easier for you and your customers, as they will get their problems resolved much more quickly.
  • Provides a holistic view of operations across all channels: One of the biggest benefits of using an order management system for e-commerce is that it can integrate across a variety of company systems, including multi-channel inventory management software, customer service departments, accounting systems, and more. In addition, OMS can help you monitor all of your sales channels at once, whether it's your website, social media, or other online marketplaces
  • Centralized reporting and analytics: E-commerce order management software can also provide a place for you to access centralized reporting and analytics that you can use to make decisions and monitor the performance of your business. Whether it’s live inventory data or real-time sales information from all of your sales channels, an OMS can provide you with actionable insights and consolidated data that you can use to help improve your business’s performance.
  • Increased scalability: Unlike outdated methods like manual entry, e-commerce order management software can easily handle more orders as your business grows. That way, you can continue to grow your business without fear that you’ll be unable to keep up with the growing demand and number of e-commerce orders.

From automating timely tasks to reducing the risk of human error, implementing e-commerce order management software is a solid way to upgrade your e-commerce business’s online order process.

Key features of efficient e-commerce order management software

A graphic showcases the top features of e-commerce order management systems.

With an understanding of the benefits OMS can bring to your business, you might be ready to dive right in. But not all e-commerce order management software is created equal. To make sure you’re choosing one of the top order management systems, you’ll want to consider one with the following key features:

Supports multiple sales channels

Whether you sell your products on Amazon, Shopify, eBay, or elsewhere, choosing an e-commerce order management software that supports multiple sales channels is a surefire way to simplify your e-commerce order management.

From providing real-time tracking of new orders across sales channels, including fulfillment statuses, refunds, returns, and shipping history, you’ll be able to easily check the status of all of your orders, no matter the sales channel.

By selecting an OMS with integration capabilities that match your current e-commerce sales channels or marketplace use, you can spend less time worrying about back-end operations and more time reaching new customers.

Automation capabilities

As a self-employed individual, you know how valuable your time can be. Whether it’s sending order confirmation emails or manually performing an inventory analysis, these tasks can cut into your everyday life. Fortunately, an efficient OMS can help you automate these tasks.

Real-time analytics

An online order management system can also help you track valuable analytics all in one place. Whether it’s tracking products, cost of goods, or analyzing profitability trends from all of your sales channels, you’ll have easy access to a big-picture view of the performance of your business.

With access to this critical real-time data, you can use it to make better-informed decisions for you and your business. On top of that, these real-time analytics can help prevent issues from human error, such as overstocking or a stockout.

Customer management capabilities

Another benefit of e-commerce order management software is the ability to manage important customer information. From order history to geographic location, an OMS can provide you with personalized information that you can use to inform your digital marketing for e-commerce strategy.

Integration capabilities

In addition to supporting multiple sales channels and integrating with e-commerce platforms, some OMS seamlessly integrate across other important company infrastructures such as customer service departments, inventory management systems, and accounting software. Some OMS even have an app store, allowing you to see all of the possible integrations and third-party connections the e-commerce order management system supports.

For example, integrating an OMS with accounting software gives you easy access to all of your financial reporting, where every transaction is accurately recorded and reported. Additionally, you can use accounting software to get a holistic view of your cash flow, allowing you to make informed business decisions without leaving your OMS.

On top of that, integrating an OMS with accounting software can help streamline your accounting process and take away the heavy lifting of manually recording journal entries or individual transactions.

By selecting e-commerce order management software compatible with the tools you already use, you’ll no longer have to hop between tools to get the information you’re looking for. 

Run your business with confidence

As a small-business owner, you know how important your time is. Whether your goal is to eliminate repetitive, time-consuming tasks or effectively analyze your sales channels in one place, your business can benefit from accounting software that allows you to integrate to your e-commerce order management system to accurately record sales, revenue and fees to your books.

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