Introduction to Order Management System

If you have a small retail business, you need the best order management system to keep up with multiple customers orders.

Mario Lawson
Mario Lawson | 3 years, 3 months ago | Retail
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Customers and retailers share the same goal, i.e., get the product to the customer’s doorstep as quickly and securely as possible. For the customer, a simple desire to buy a product may be all that’s needed to realize this goal. However, if you’re a retailer, you need the best order management system to keep up with multiple customers orders. 

This is particularly true if you are an eCommerce retailer. You may not be familiar with this, but, the only thing more important to online shoppers than money is time. That’s why about 70% of online customers will head elsewhere to shop for a product simply because they can’t’ afford to wait for backorders. Numerous studies have revealed that in the case of free shipping, 87% of them would patiently wait for two extra days. And which better way to arrange free shipping, returns, and overall retail management than with a flexible and efficient order management system? 

Many retailers believe they can handle orders themselves, or through hired hands. However, according to a recent study, it was revealed that human errors accounted for 46% mismanaged inventory. Therefore, an order management software might be all you need. 

Before we proceed, let’s get a few fundamental points out of the way. 

What is an Order Management System (OMS)?

An order management system, as the name suggests, helps users track sales, online orders, stock inventory, and ensure timely fulfillment of orders. By doing so, it entirely facilitates all the processes, collaborations, and partnerships necessary for goods to move from a retailer to their intended buyers. With the help of effective order and inventory management software, your eCommerce business has a central platform for managers all orders generated by your different sales funnels. 

Using a centralized management system, you can control your customer interactions and their order related information. Also, your POS system for retail and accounting data will remain firmly within your reach, all through a single outlet.

In addition, the OMS collects data about vital aspects of your business. This enables you to analyze large amounts of business data and derives meaningful insights. These insights help inform you to make smarter choices, which ultimately leads your retail business along the path of success. 

Many who run an eCommerce business already have an order management system in place. Hence, we can safely say it is integral to your retail store, if you wish to meet regulatory standards and remain secure from security risks. However, many businesses that have an OMS in place don’t have the right system in place. 

This largely explains why the number of dissatisfied clients and the losses many online retailers experience. However, there are several functions that a management system provides that helps you overcome these challenges. 

The Order Management System and Its relevance to Ecommerce

order management system

If you’ve ever wondered what an OMS can do for your retail business plan and long term success, here are few examples to get you started. 

Locate inventory

Inventory management remains one of the most significant challenges for many retailers. It’s easy to see why, because profit and time losses compound when the right systems to manage aspects of retail business like inventory management and product warehousing. If you’re a business owner with the inventory at multiple warehouses, it’s easy to get overwhelmed by trying to track what goes on in all these locations. 

But with the proper management system, you don’t have to worry about your product levels or running out of stock. 

Manage returns

So far as eCommerce is concerned, they are bound to be returned. It is inevitable. Hence you need the best tracking system to help you offset the number of paid orders, Thereby regulating many other aspects of the business that are directly or indirectly affected by high returns. 

Track orders

Every aspect of your online orders are under control, thanks to your order management system. As mentioned earlier, OMS is great at helping with small business inventory management. However, it doesn’t stop there; the system’s primary functions are the integration of inventory with orders coming in. So that you know much is being sold, how many are left, and which channels are generating the most orders. 

Fulfill Orders

In the last five years, we’ve seen a significant increase in the number of warehouses. It has significantly increased the ease of fulfilling orders at different locations all over the country and abroad. In this case, retailers who might even be out of advertising ideas generate good sales purely based on their reputations for speedily delivery of orders. Mind you; customers will usually favor delivery speed. 

Using an Order Management Software vs. an Ecommerce Platform

Usually, you’re better off with a dedicated management system than using your default eCommerce platform for managing orders. It is not very advisable, especially if your business brings in any revenue of about $3 million or more. 

However, small business owners who intend to remain small (sincerely hope you don’t) can do just fine with their eCommerce order management system. Nevertheless, we need to mention some scenarios in which using your eCommerce site might not favor your business. Some of these scenarios are if you:

  • Expect growth down the line

  • Have several active sales-channels 

  • Use different warehouses to fulfill your orders

  • Use a sophisticated order fulfillment process

  • Receive orders from multiple locations/countries

  • Combines both dropshipping and inventory holding to fulfill orders

Using an order management software grants you the flexibility required to shift between the different segments of order fulfillment at a higher level and remain focused on customer satisfaction. 

6 Criteria for Choosing the Best OMS

Now that you want to decide the best order management system for your business, there are certain things we need to get right. One such thing includes the marketing and gift card advertising ideas you have in mind. Because this will have a direct effect on the sales channels, you’ll use it to generate orders and increase revenue.  

Here are six criteria to consider when choosing an OMS for your business. 

  • Supplier considerations

  • Scalability

  • Customer functionality

  • Fulfillment integration, warehouse, and 3PL

  • Site integration

  • Reporting abilities

Having these principal considerations in mind, you can find a good match for your business by combining your retail POS system with the right software for order management. 


Different order management software varies in their benefits and specific features. However, as we mentioned earlier, they usually share some primary features. These features can guide you to select the best order management system for your business. However, no matter which approach you take for your business, default eCommerce platform or an OMS, try and first do the following:

  • Identify the objectives, processes, and goals of your business.

  • Compare software and research OMS to find the best for you.

  • Analyze the costs, benefits, and features that coincide with your business plan

If you want a complete view of the order to product delivery lifecycle, then a dedicated OMS is very useful for your business. You have a birdseye view of the multiple channels that bring in orders. Also, you get to fulfill each order without the headache related to inventory management or canceled orders. All these give you the freedom to focus on other vital aspects of business growth and expansion.


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