What is Order Management in E-Commerce?

Order management in e-commerce is the process of handling a customer’s order from the moment of purchase to product delivery. To put it precisely, it’s the end-to-end sales cycle of receiving, processing, and fulfilling a customer order.

An order management system (OMS) aids merchants in coordinating multichannel sales, handling real-time inventory, printing shipping labels, initiating fulfillment tasks, handling customer inquiries, and managing returns. It makes full use of almost every department in the organization, including the warehouse, accounting, and delivery partners.

Through the use of automation and integrations, a modern e-commerce OMS enables retailers to expedite the delivery process while accumulating all data into a unified interface. This leads to high levels of customer satisfaction.

Moreover, it supports an efficient and smooth running of business operations, helping merchandisers to uphold their order processes and fuel their business credibility. Not only that, but it can also cut down on costs related to shipping, returns, and errors.

For example, a business that’s selling magazines on a subscription basis uses OMS to help customers automatically place orders. Then it confirms payment, creates shipping labels, sends the order to the warehouse, cross-checks inventory, and delivers the product.

With a modern order management system for e-commerce, businesses can grow their workflows and handle increased order volume.

How Does the E-Commerce Order Management Process Work?

The order management process in e-commerce involves a series of steps that need to work in sync from start to finish. They are pre-ordering, placing the order, order routing and fulfillment, warehouse management, shipping and tracking, and return or exchange processing. It entails a series of interconnected steps that create a fluid order-to-cash flow.

Let’s look at the step-by-step process of order management in e-commerce:

Step 1: Pre-Ordering

The order management process in e-commerce starts when the customer adds a desired item or product to their online shopping cart. The vendor is notified about some activity in the cart, causing the system to adjust available inventory.

Step 2: Order Placement

The customer places the order, after which the system stores details, e.g., order history, payment preferences, volume of orders, delivery address, etc. This is followed by communication with back-office systems, sending the order to the warehouse, where inventory is checked. This step is also when the customer’s payment is verified.

Step 3: Order Routing and Fulfillment

After the inventory is checked by the warehouse and a green signal is given for the supply, the order enters the next stage. It starts processing, where the shipping cost is calculated, carriers are selected, and packing slips are printed.

Throughout this course, the communication with the warehouse is kept smooth. Oftentimes, inventory may be running low or may run out completely due to a large order. In that case, an order is placed with the purchasing department.

Step 4: Warehouse Management

The OMS is a potent structure that automatically orders more items from suppliers for low-inventory or out-of-stock products. It notifies the warehouse employees where to find items, how to bundle them for shipping, and flags other important details, like if an item requires extra care in handling.

Step 5: Shipping and Tracking

The next step involves the items being picked from the warehouse and carefully packed for shipping. They may also be checked for quality control.

After packaging, the order is shipped via the chosen delivery method. The system alerts the customer that the item is out for delivery, and they receive a tracking number.

Some systems may display a progress indicator that lets the customer know at which stage of the process their order is and updates it throughout the delivery process.

Step 6: Return or Exchange

Through the order management system, businesses can proactively process refund or exchange requests and keep the customers notified. This upholds the organization’s reputation, fueling positive customer feedback.

What Are the Benefits of Order Management in E-Commerce?

In the fast-moving B2B world, integrating an order management system offers many benefits to businesses, namely enhanced operational efficiency, a centralized order management process, real-time data, automation, and 24/7 access.

Let’s dive into a detailed exploration of the five key benefits of order management in e-commerce:

Enhanced Operational Efficiency

A key advantage of order management is the automated workflows that help expedite the buying and selling process. This operational efficiency streamlines the picking, packing, and shipping phases. So, the quicker the order is managed and delivered, the quicker customers make the transactions.

Furthermore, OMS provides a bird’s-eye view of the inventory levels, allowing businesses to prevent overselling and stockouts. All in all, it helps businesses significantly reduce operational costs while optimizing order fulfillment processes.

Centralized Order Management Process

The order management system provides a centralized view of the complex e-commerce ecosystem. It simplifies operations and protects against errors.

Because of the unified view of all sales channels, including fulfillment and distribution centers, and warehouses, it helps in reducing costs and revenue loss.

Real-Time Data

With its advanced technology, businesses can utilize order management to swiftly address any issues that may arise. It provides insights into sales trends and products, also allowing businesses to track key metrics and identify potential gaps.

As a B2B merchant, customer satisfaction is the top determinant of your business’s success. Order management offers insights into customer preferences, purchase patterns, and more to help you target customer happiness by personalizing product offerings.

Automation

As automation becomes the new norm globally, the order management system also facilitates organizations through automatic order processing. This enables them to reduce the risk of manual errors across departments, ensuring quicker delivery times.

As a result, companies have more free time to focus on core activities that position them on the growth ladder and target customer satisfaction.

24/7 Access

The order management system is easy to access from any device or platform. Businesses are able to process orders remotely at any time of the day. Due to the 24/7 access, they gain more control over the processes, leading to better customer service and streamlined order processing.

What Are the Challenges of Order Management in E-Commerce?

With so many movable components in the order management process, it opens doors to a lot of challenges. Some of these challenges include inventory invisibility, shipping errors, poor communication between systems, and integration and scaling issues.

Let’s dissect them one by one.

Inventory Invisibility

Inaccurate or disorganized inventory data can prove to be detrimental to your business reputation. Timely managing stock levels, streamlining multichannel processes, and avoiding overselling are crucial.

To prevent sales mishaps from happening, leverage a comprehensive order management system that offers real-time visibility about inventory availability across channels and systems.

Other than that, you should look to efficiently manage reorder points and coordinate what is displayed online with what is actually available in the warehouse.

With your inventory management catered for, sales loss and customer dissatisfaction don’t stand a chance.

Shipping Errors

Another major challenge in e-commerce order management is shipping errors. When orders aren’t delivered on time and in good condition, it portrays a poorly coordinated logistics network, ultimately decreasing the perceived credibility of a company.

On top of that, delays, lost packages, or damaged goods lead to a negative impact on the customers. This deters them from buying from you again, and they may turn towards your competitors for a better experience.

To curtail these errors, it is essential to partner with more than one shipping carrier that is reliable. This would decrease the chances of risk attached to shipping delays. Moreover, a robust tracking system that offers real-time updates goes a long way in solving many of the shipping and delivery errors.

Many times, fragile items aren’t packaged properly, which may lead to damage. This issue can be contained by optimizing packaging to protect the products.

Poor Communication Between Systems

Managing an omnichannel order fulfillment system is not an easy task. In fact, it substantiates a complex structure of a plethora of channels and systems that need to be aligned in order to work efficiently.

Even if one system crashes or lags, it can prove disastrous for the business. It entails a sequence of interlinked touchpoints and stakeholders who work synergistically to provide the best products to their customers.

A key reason why systems may not be working to their full potential is due to poor communication. This causes a hindrance in handling orders properly, tracking product availability, and restocking timely.

Implement a double-check system to catch errors, e.g., scanning and verifying items. Ensure the order details are properly mentioned and communicated across systems. Track inventory in transit with a rigorous OMS software. This helps streamline your business operations and reduce errors.

Integration and Scaling Issues

As businesses grow, they require potent systems and integrations that can grow with them. And this needs to be done without compromising efficiency or customer satisfaction.

Businesses that fail to handle demand spikes often have to deal with lost sales, inventory discrepancies, and greater returns. At the same time, omnichannel complexity, lack of unified data, and communication gaps give birth to operational bottlenecks.

Hence, it is necessary to streamline workflows with an automated and comprehensive OMS. This would not only give you the overall efficiency that you need but also provide analytical insight into improving customer satisfaction.

How Does SubscriptionFlow Facilitate OMS Processes for Businesses?

SubscriptionFlow offers businesses a seamless and efficient order management process. It acts as the bridge between subscription logic and order fulfillment tools.

With its advanced automation, integration, and scalability capabilities, smooth subscription lifecycle management, and analytical insights, it puts businesses at the forefront of empowerment.

SubscriptionFlow’s OMS services serve a range of industries, including e-commerce, SaaS, courier companies, digital media, e-learning, and telecom, among others. With its history of assisting numerous businesses achieve their shipment and payment targets, SubscriptionFlow is a leading OMS facilitator.

Let’s explore the various ways SubscriptionFlow facilitates the order management process for businesses:

Integration with E-Commerce Platforms

Popular e-commerce platforms such as Shopify, Wix, and WooCommerce can be directly integrated with SubscriptionFlow. This enables a frictionless synchronization of customer data, orders, and products.

Through this fusion, businesses can easily process and track orders, as well as streamline shipping for subscription products. Moreover, this integration offers a centralized view of customer and order data within the OMS.

This enriches visibility and operational efficiency.

Advanced Automation

Billing and invoicing are essential components of the order process. With SubscriptionFlow, you can attain full automation for recurring subscriptions, reducing manual intervention and saving precious time.

Automated systems enable companies to promote faster payment processing. It integrates with various payment gateways to guarantee security. This, in turn, increases the cash flow with proper revenue recognition.

SubscriptionFlow also offers different pricing models like usage-based, tiered, or volume-based pricing. This level of customization helps businesses cater to a diverse customer range.

In addition, customers have the option to upgrade/downgrade their subscription plans mid-cycle. SubscriptionFlow handles prorated billing seamlessly, ensuring billing accuracy and customer happiness.

Data-Driven Analytics

With a robust analytics structure, SubscriptionFlow allows businesses to obtain real-time insights into core activities and metrics. These include ARR, churn rate, MRR, customer lifetime value, and customer behavior.

Moreover, businesses can identify trends to tailor their offerings. On top of that, SubscriptionFlow makes it easier for businesses to forecast revenue so they can target growth.

Smooth Subscription Lifecycle Management

SubscriptionFlow prioritizes ease of use for customers. It enables them to manage their own subscriptions through an all-encompassing self-service portal. Through this portal, customers can easily upgrade/downgrade or cancel their plans.

This billing software ensures that the transition is smooth like butter and entails minimal disruptions.

To take it a step further, SubscriptionFlow makes life simpler for customers by offering group subscriptions. Through this implementation, a customer’s multiple subscriptions can be consolidated into a single invoice. This saves them the challenge of managing several invoices and makes financial planning effortless.

Integration and Scalability Capabilities

Seamless business systems integrations ensure data consistency. SubscriptionFlow allows a frictionless integration process with various systems like CRM, ERP, and accounting software through robust APIs.

SubscriptionFlow is a billing platform that is designed to handle scaling businesses. It emphasizes customer retention, allowing companies to handle an expanding clientele flexibly.