For many businesses—especially high-growth merchants—the act of managing and fulfilling orders across multiple sales channels and fulfillment locations is tricky. Between order placement and delivery lies an ocean of challenges like inventory visibility, order profiles, and returns.
One solution to solve these problems? An order management system (OMS) that tracks stock levels across warehouses, combines order data across multiple sales channels, streamlines fulfillment, ships orders fast, manages returns and exchanges, and centralizes reporting.
In this guide, we’ll cover a wide range of details, from which tasks an OMS should handle to the benefits of having a centralized dashboard. And we’ll help you evaluate the type of OMS your business needs.
An order management system (OMS) is a digital tool used ito track sales, orders, inventory, and fulfillment. It streamlines the order lifecycle, from receipt of order to delivery, ensuring accuracy and efficiency. It includes processes like order entry, resource allocation, and monitoring order status.
For example, Shopify, a leading ecommerce platform, offers a built-in OMS as part of its service. With Shopify’s system, ecommerce businesses can process multichannel orders—including in-store purchases, online store sales, and other marketplaces—and manage them all from a single platform.
An OMS is a comprehensive solution to streamline end-to-end fulfillment, from order entry to delivery. Some systems, like Shopify’s, also provide distributed order management to coordinate fulfillment across multiple warehouses and locations.
Top features include:
An OMS tracks inventory levels by channel, automates the order fulfillment process, handles reverse logistics, manages customer information, and merges order and financial data. In short, it ensures the customer gets what they ordered, and lets both you and the customer know when the order has arrived.
The beauty of modern-day business is that brands can reach customers through a variety of channels. Customers can purchase items in-store through point-of-sale (POS) software, self-serve through a brand’s direct-to-consumer ecommerce store, in online marketplaces or social media channels, or even combine online and offline activity with delivery options like buy online, pick up in-store (BOPIS).
An OMS helps retailers manage and synchronize inventory across the multiple locations they’re fulfilling items from, whether from a physical retail store, or a fulfillment center or warehouse. It’s a tool designed to help ecommerce brands that plan to invest in their inventory management process over the next two years.
With an OMS, you can:
OMS solutions like Shopify offer multilocation inventory management, allowing businesses to track stock across up to 1,000 warehouses, fulfillment centers, and stores. These systems also enable you to create purchase orders for suppliers and transfer inventory between locations, while providing a comprehensive view of stock levels and movement.
A modern OMS treats the supply chain as an interconnected ecosystem, allowing merchants to automate their internal processes from order to fulfillment.
To push orders through the processing, picking, and shipping process in as little time possible, ecommerce merchants can rely on an OMS to:
A good OMS should route orders to the best location, not only in terms of a customer’s proximity to your warehouse, but also for prioritizing orders within the same destination market, minimizing split fulfillments, or ranking priority locations.
Your OMS can help you avoid upsetting your customers and provide a fuss-free returns experience for everyone involved. It might also support self-serve returns in your online store, enabling customers to initiate returns whenever it’s most convenient for them, without the hassle of contacting a representative over the phone or email.
It can automatically print return labels in case a customer needs to send items back. The return address will differ based on the customer’s location, letting you receive and process refunds in as little time as possible. Customers can also check the status of their return with online tracking.
Not only that, but customer service teams get immediate information on any product a customer has shipped for return. All customers get the same level of service regardless of what they purchased, and how or where they bought it.
An OMS can act as a customer relationship management (CRM) platform, allowing merchants to access all information they have on a customer, including previous orders, lifetime value, and their location.
With the insights into customer data they gain from an OMS, merchants have the ability to hyper-personalize any marketing messages they send to customers when trying to secure another sale.
For example, an ecommerce brand can pull data from their OMS to create the following customer segments:
The brand then develops a distinct marketing strategy for each customer segment. Those located in Europe won’t get the same marketing emails as your US audience. Expensive items are recommended to customers with a high AOV—those who are more likely to buy. Bestsellers are put front and center in your emails to one-time customers.
Email personalization that acknowledges what was previously purchased and is value-added has been proven to yield 10% to 15% higher conversion rates—and it’s made easy with customer reports automatically generated with an OMS.
It’s all well and good to see all your order data in one central location. But an essential part of running an ecommerce business is judging whether you’re actually turning a profit—and if so, where and how, so you can zone in on making more.
Most OMSs have the ability to integrate with other back-office functions—particularly your finance software. The platform can pull information from your accounting software to merge inventory and sales data. You’ll be able to gain insight into accounts payable and receivable, as well as automate the production of invoices and purchase orders, , with no manual data entry required.
Whether you’re searching for your first OMS or looking to replace your existing one, here are four great options to consider.
Shopify is an all-in-one ecommerce platform for scaling brands. Our platform comes with a built-in order management system, with which you can process orders in-store, from your online store, or from other sales channels and marketplaces.
You can also track, manage, and fulfill orders from one central dashboard. Shopify will also automatically route orders to the best fulfillment location based on order-routing rules set by the merchant.
Shopify’s OMS also offers:
One success story is Snarky Tea, a business that transformed its fulfillment operations using Shopify’s built-in OMS.
Snarky Tea, founded by Jenni-Lyn Williams, grew from a small business into a direct-to-consumer company with hundreds of products. With rapid growth and publicity from Vogue, the Oscars, and Shark Tank, the company faced challenges managing inventory, fulfillment, and shipping efficiently.
By integrating Shopify’s order management solution, Snarky Tea achieved:
Jenni-Lyn describes Shopify’s OMS as a game changer, saying, “The more I can do within Shopify’s ecosystem, the better. It saves us from unnecessary headaches and helps us stay organized.”
Tired of having to choose between scalability and control?
ShipHero is another order management solution for growing ecommerce brands. Built in the cloud, this platform is designed to help businesses more easily manage their inventory, streamline fulfillment processes, cut down on errors, and boost their overall operational efficiency.
It’s also known for its user-friendly interface, which allows ecommerce businesses of any size to easily customize workflows to their unique needs. Plus, ShipHero offers a robust suite of tools for managing multiple sales channels, optimizing order routing, and automating tasks—freeing up time and resources for businesses to spend on other projects.
ChannelApe IOMS is a powerful platform for strategic inventory operations, helping businesses unite their sales, fulfillment, finance, and customer service. It’s touted as a company’s “mission control for operations,” and offers a streamlined approach with helpful dashboards to consolidate metrics in real time for a comprehensive look at how a business is performing.
Specifically, ChannelApe can help businesses get better visibility into their supply chain, which can help them scale operations and reduce mistakes. Plus, companies can tap into advanced tools for inventory and order management, including rules governing holds, routing, edits, fraud, and more.
Manhattan Associates is a supply chain and omnichannel commerce software provider. They offer solutions that help businesses get the most out of their supply chain operations, inventory management, and order fulfillment processes.
Manhattan Associates is especially keen on the idea of unified commerce, and their cloud-based solutions are geared toward helping businesses succeed across several areas of commerce: workforce retention, cloud technology transformation, fulfillment through storefronts, transportation and distribution, profitable fulfillment, and inventory forecasting. They are known for their expertise in supply chain technology, and they are able to provide tailored solutions to meet a business’s specific needs.
A good OMS offers several key advantages:
