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Choosing the Best E-commerce Order Management Software

Choosing the Best E-commerce Order Management Software

By Abhishek Sebin on Oct 18, 2024

When running a successful online business, few tools are as critical as an e-commerce order management system. With higher customer expectations, ensuring efficient order fulfillment, inventory tracking, and shipping coordination is essential. This is where e-commerce order management software comes into play. The right software can automate repetitive tasks, reduce errors, and help scale your operations as your business grows.

But with so many options available, how do you choose the best one for your business? Whether you're a small startup or an established brand, selecting the right order management solution can feel overwhelming. Factors like integration with your ecommerce platform, inventory synchronization, and ease of use should all be considered before making a decision.

In this guide, we'll dive into the key features to look for, explore top solutions in the market, and help you identify the best software that aligns with your business goals. By the end, you'll understand how the right e-commerce order management system can help streamline your operations and improve your customer experience. Let's get started on finding the perfect fit for your online business!

What is an Order Management System (OMS)?

An order management system (OMS) is software designed to help businesses manage the entire lifecycle of an order—ideally, from the moment a customer places an order to its final delivery. This includes inventory management, order processing, fulfillment, and shipping in a single platform.

The best e-commerce order management system helps manage the complexities of online transactions more effectively. It is the backbone of the order-to-cash process, ensuring that orders are handled efficiently across different sales channels, including online stores, physical locations, and call centers.

Functions of an OMS

The primary functions of an Order Management System include:

Unified Inventory Management: This provides a real-time view of stock levels across all locations and sales channels, ensuring accurate availability information for customers.
Order Lifecycle Management: This function manages the complete order journey from initial placement through delivery and returns, including tracking order status and handling exceptions.
Customer Communication: Sends notifications to customers regarding their order status, enhancing transparency and customer engagement.
Integration with Other Systems: Interfaces with e-commerce platforms, payment gateways, and logistics providers to create a flawless workflow.

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With these core functions, an OMS can simplify what would otherwise be a complex and error-prone process.

Let's now explore how these capabilities translate into tangible benefits for your business.

Benefits of an Order Management System

Implementing an e-commerce order management system can offer several advantages directly impacting your business's bottom line.

Real-time inventory management and tracking

An OMS provides real-time visibility into inventory levels across various channels. By accurately tracking available-to-promise (ATP) inventory, businesses can avoid stockouts or overstock situations.

For example, suppose a retailer uses an OMS integrated with their warehouse management system. In that case, they can instantly see how many units of a product are available for sale at any moment.

Automated order processing and workflow

Automation is a crucial feature of modern OMS solutions. They can automatically process orders once placed, reducing the need for manual intervention. This speeds up the fulfillment process and minimizes human error in data entry and order handling.

For instance, when a customer orders online, the OMS can automatically route it to the nearest fulfillment center based on inventory levels and shipping capabilities.

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Integration capabilities with e-commerce and payment platforms

An effective OMS effortlessly integrates with various e-commerce platforms (like Shopify or Magento) and payment gateways (such as PayPal or Stripe). This integration allows businesses to manage orders from multiple sources in one place.

For example, a business that sells on both its website and Amazon can use an OMS to consolidate orders from both channels into a single dashboard, making management easier.

Reporting and analytics tools for insights

Reporting capabilities within an OMS provide valuable insights into sales trends, inventory turnover rates, and customer behavior. Businesses can analyze this data to make informed decisions about stock replenishment, marketing strategies, and customer engagement initiatives.

For example, by examining sales reports generated by the OMS, a retailer might identify that certain products sell better during specific seasons, allowing them to optimize their inventory accordingly.

Now that you understand the benefits of an order management system, how do you assess whether your business needs one? Let's explore that next.

Assessing Business Needs for OMS

Assessing your business's specific needs is crucial before selecting an OMS. Not all systems are created equal, and finding the right fit requires evaluating several key factors.

Evaluate order volume and inventory requirements

Understanding your current order volume and inventory needs is the first step in selecting an appropriate OMS. Different systems are designed to handle varying scales of operation.

Order Volume: Analyze the number of orders processed daily, weekly, or monthly. For instance, a small business handling 100 orders a week may require a different system than a larger retailer processing thousands of orders daily.
Inventory Management: Evaluate how your inventory is currently managed. An effective OMS should provide real-time visibility into stock levels across multiple channels.

Consider scalability requirements for future growth

As businesses evolve, their operational needs change. Selecting an OMS that can scale with your business is essential.

Handling Increased Orders: Your chosen OMS should be capable of managing spikes in order volume during peak seasons or promotional events without requiring a complete overhaul. For example, a cloud-based OMS allows businesses to adapt quickly to increased demand without significant infrastructure changes.
Flexibility for Expansion: Look for systems that offer modular features or can easily integrate additional functionalities as your business grows. This ensures you won't outgrow your system as you expand into new markets or product lines.

Identify integration needs with existing platforms

A successful OMS must integrate with your existing software solutions to ensure smooth operations.

Compatibility with E-commerce Platforms: Ensure that the OMS you choose can integrate with popular e-commerce platforms like Shopify, WooCommerce, or Magento. This integration is crucial for maintaining data consistency across sales channels and streamlining workflows.
Third-party Software Integration: Consider other systems your business relies on, such as accounting software or customer relationship management (CRM) tools. A robust OMS should facilitate data flow between these systems to avoid silos and enhance operational efficiency.

For instance, Postship integrates with multiple automation, marketing, payment, and carrier platforms to enhance e-commerce workflow.

Specialized in providing branded revenue-optimized order tracking pages, real-time notifications, and return management systems that convert refunds into exchanges, Postship simplifies customer experience and improves online businesses.

By carefully evaluating these factors, businesses can select an OMS that meets their current requirements and supports their long-term growth objectives. But before that, you need to understand the different types of OMS available. See below.

Types of Ecommerce Order Management Systems

Several types of OMS are available. Each offers different features and benefits, depending on your business model.

Cloud-based OMS for scalability

Cloud-based order management systems are hosted on remote servers and accessed online. This type of OMS offers significant scalability, allowing businesses to grow without physical infrastructure constraints.

Examples:

NetSuite: This cloud-based solution provides real-time visibility into inventory and sales across multiple channels, making it ideal for businesses anticipating growth.
ZOHO: Known for its integration capabilities with platforms like Amazon and Shopify, ZOHO allows businesses to manage orders efficiently across various sales channels.
On-premises OMS for local control

On-premises order management systems are installed locally on a company's servers. This type of system offers businesses complete control over their data and operations, which can be essential for companies with specific regulatory or security requirements.

Examples:

IBM Sterling Order Management: This system is designed for larger enterprises that require robust control over their order processes.
SAP Commerce Cloud: Aimed at both B2B and B2C companies, this on-premises solution provides intelligent sourcing and fulfillment capabilities while allowing businesses to control their data security and compliance needs.
All-in-One Platforms for comprehensive solutions

All-in-one order management platforms combine various functionalities into a single solution. It includes inventory management, customer relationship management, shipping logistics, and analytics. These platforms are designed to handle every aspect of e-commerce operations simultaneously.

Examples:

SkuNexus: This platform provides comprehensive features integrating inventory control with order processing across multiple sales channels.
Cin7 Core: Designed primarily for manufacturers and product sellers, Cin7 includes tools for inventory management, sales integration, and reporting.

Similarly, Postship offers an all-in-one solution for post-purchase requirements. We give your customers one place to track their orders from multiple carriers.

PostShip's branded tracking page improves convenience, reduces confusion, and enhances loyalty.

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Selecting the right type of e-commerce order management system depends on your business's specific needs regarding scalability, control, and integration capabilities.

Now that you understand the different types of OMS, how do you choose the best option for your business?

Choosing an E-commerce Order Management System

Selecting the right Order Management Software is crucial for optimizing e-commerce operations. A suitable OMS can streamline processes, enhance customer satisfaction, and drive sales. Here's a detailed guide on evaluating different OMS options.

Evaluating Order Management System Options

Compare features and pricing of different solutions

When comparing OMS solutions, consider the following features:

Integration Capabilities: Look for software that integrates well with your existing systems (e.g., e-commerce platforms, payment gateways, and shipping carriers). For instance, Postship integrates with multiple carriers and other applications for automation, marketing, and payments to facilitate smooth e-commerce workflow on Shopify.
Inventory Management: Choose an OMS that provides real-time inventory tracking to prevent overselling and stockouts. Linnworks excels in this area with its extensive inventory control features.
Order Fulfillment Automation: An effective OMS should automate order processing tasks like picking, packing, and shipping label generation. This can significantly reduce errors and improve efficiency.
Reporting and Analytics: Look for systems that provide insights into order volume, customer behavior, and operational efficiency. These analytics can inform business decisions and strategies.

Request demos and trials to test usability

Before making a commitment, request demos or free trials from potential vendors. This allows you to evaluate the software's usability firsthand. During the trial, assess:

User Interface: Is it intuitive? Can your team navigate it easily?
Functionality: Does it meet your specific operational needs?
Customer Support Accessibility: How easy is getting help during the trial?

Testing different solutions can help you choose an OMS that aligns with your team's workflow.

Seek customer reviews and recommendations

Customer reviews provide valuable insights into how software performs in real-world scenarios. Look for:

User Feedback: Check platforms like G2 or Capterra for reviews on various OMS solutions. Pay attention to comments regarding customer support, ease of use, and overall satisfaction.
Case Studies: Some vendors publish case studies showcasing how their software has benefited specific businesses. These can provide concrete examples of performance metrics improvements.

Vendor Support and Considerations

Importance of reliable customer support

Reliable customer support is critical when selecting an OMS. A responsive support team can help resolve issues quickly, minimizing disruptions to your operations. Look for vendors that offer:

24/7 Support Options: This ensures assistance is available whenever you need it.
Multiple Contact Methods: Options like chat, email, and phone support can enhance accessibility.

Understand the vendor's track record and reliability

Researching a vendor's history can provide insight into their reliability. Consider:

Years in Business: Established vendors may have more experience in handling various operational challenges.
Client Portfolio: A diverse client base across different industries can indicate versatility and reliability in service delivery.

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Read about the best practices to streamline your order tracking: Streamline Your Shopify Order Tracking Efficiently!

Cost Considerations

Understand pricing models

Different pricing models cater to various business sizes:

Free Plans: Suitable for startups or small businesses with limited order volumes (e.g., Despatch Cloud).
Basic Plans: Often include essential features at a lower cost but may have limitations on order volume or integrations.
Professional Plans: Typically offer comprehensive features suitable for larger enterprises needing advanced functionalities.

Determine the right plan for current business size

Choosing the right plan depends on your current business size and anticipated growth. Evaluate:

Current Order Volume: Estimate your monthly order volume to select a plan that accommodates growth without incurring unnecessary costs.
Future Scalability Needs: To avoid switching systems later, ensure the chosen OMS can scale with your business as it grows.

Evaluate the total cost of ownership

When choosing an OMS, understanding the Total Cost of Ownership (TCO) is essential. TCO includes not only the initial purchase price but also ongoing costs such as:

Licensing Fees: Subscription-based models often have hidden fees that can accumulate over time.
Implementation Costs: Consider any costs associated with integrating the new system into your existing operations.

Assessing TCO helps prevent unexpected expenses down the line.

After considering the suitable OMS, let's explore some of the top e-commerce order management systems available today.

Top E-commerce Order Management Systems

Here are a few top-rated e-commerce order management systems that have received positive feedback from businesses:

SkuNexus

SkuNexus is recognized for its comprehensive capabilities in managing inventory, orders, and warehouses.

Key Features:

Real-Time Order Tracking: Provides updates on order status from placement to delivery.
Automated Order Routing: Based on inventory and shipping logistics, it automatically directs orders to the nearest fulfillment center, ensuring faster delivery and reduced costs.
Multichannel Integration: Centralizes order management across various platforms, maintaining synchronized inventory levels.
End-to-End Inventory Management: Tracks products throughout their lifecycle, preventing overstocking and stockouts.

SkuNexus is particularly noted for its flexibility and scalability, making it suitable for businesses of all sizes looking to optimize their operations.

Brightpearl

Brightpearl is designed as a complete retail operating system that streamlines various business processes.

Key Features:

Comprehensive Management: Integrates inventory management, order processing, warehousing, fulfillment, and accounting into one platform.
Automation of Routine Tasks: Reduces manual workload by automating repetitive tasks across sales channels.
Real-Time Reporting: Offers insights into sales trends and inventory levels to inform decision-making.

Brightpearl is ideal for retailers seeking an all-in-one solution that enhances operational efficiency.

Linnworks

Linnworks excels in integrating multiple sales channels into a centralized interface.

Key Features:

Multichannel Inventory Syncing: Ensures consistent stock levels across all platforms to prevent overselling.
Order Management Optimization: Streamlines the entire order process from capture to fulfillment.
Stock History Reporting: Provides detailed reports on inventory changes over time for better management.

Linnworks is particularly beneficial for businesses looking to manage diverse sales channels effectively.

Veeqo

Acquired by Amazon, Veeqo focuses on automating order management and shipping processes.

Key Features:

Custom Automation Rules: Allows businesses to set up rules for order assignments based on various criteria.
Address Validation: Automatically checks customer addresses to minimize shipping errors.
Built-in Shipping Software: Facilitates label generation and tracking through major carriers.

Veeqo is well-suited for e-commerce businesses that prioritize automation in their fulfillment processes.

Oracle NetSuite

NetSuite provides a robust cloud-based solution tailored for mid-sized businesses.

Key Features:

Comprehensive ERP Capabilities: Integrates financials, CRM, and e-commerce functionalities into one system.
Detailed Exception Management: Offers dashboards and exception queues to handle order discrepancies efficiently.
Scalable Architecture: Grows with your business needs, making it suitable for expanding enterprises.

Oracle NetSuite stands out for its extensive feature set that supports complex business operations.

Postship integrates with multiple automation, marketing, payment, and carrier platforms to enhance e-commerce workflow. Specialized in providing branded revenue-optimized order tracking pages, real-time notifications, and return management systems that convert refunds into exchanges, Postship simplifies customer experience and improves online businesses. Book a demo today!

Now that you know some top OMS solutions, it's essential to consider the potential challenges you might face when selecting and implementing a system.

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Also read: Creating Product Bundles on Shopify: A Simple Tutorial

Challenges in Choosing an OMS

Choosing an e-commerce Order Management System is critical for businesses aiming to streamline their operations and enhance customer satisfaction. However, several challenges can complicate this process. Here's an in-depth look at three significant challenges:

Handling complex order structures and workflows

Complex Order Structures
E-commerce businesses often deal with intricate order structures, including multiple items, variations (like sizes and colors), and different fulfillment methods (such as in-store pickup or direct shipping). An effective OMS must manage these complexities without causing delays or errors.

For instance, if an OMS cannot handle multi-package orders, it may treat a large order as a single shipment, leading to inefficiencies and increased processing times.
Workflow Management
Additionally, the workflows associated with order processing can vary significantly across different businesses. Some may require specific routing rules based on inventory levels or shipping priorities. An OMS that lacks customizable workflows can hinder a business's ability to adapt to unique operational needs.

For example, a retailer that experiences seasonal spikes in demand may find it challenging to configure their OMS to accommodate fluctuating order volumes without incurring additional costs or delays.

Compatibility issues with existing systems

Integration Challenges
One of the most common hurdles when selecting an OMS is ensuring compatibility with existing systems such as Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), and various e-commerce platforms.

A lack of efficient integration can lead to data silos, where information is not shared effectively across systems. This can result in errors like incorrect inventory counts or delayed order processing, ultimately affecting customer satisfaction.
Bidirectional Syncing
Moreover, many OMS solutions struggle with bidirectional data syncing. Businesses may face significant operational challenges if an OMS cannot accurately sync inventory levels or pricing information between various platforms.

For example, inventory data must be updated in real-time across all sales channels to avoid overselling out-of-stock products, damaging customer trust, and leading to lost sales.

Cost of implementation and ongoing maintenance

Initial Investment
The initial cost of implementing an OMS can be substantial. Online businesses must consider the software purchase and the costs associated with integrating the system into existing operations. This includes potential expenses for training staff on the new system and configuring it to meet specific business needs.

For instance, a small retailer transitioning from manual order processing to a sophisticated OMS may incur significant upfront costs that could strain their budget.
Ongoing Maintenance Costs
Beyond the initial investment, ongoing maintenance costs can add up over time. These costs may include subscription fees for cloud-based solutions, updates to keep the system secure and efficient, and potential costs associated with troubleshooting issues or adding new features as the business grows.

Companies must weigh these ongoing expenses against the benefits provided by the OMS to ensure it remains a viable investment over time.

Despite these challenges, understanding these issues and choosing the right e-commerce order management system will ultimately lead to long-term operational efficiency and enhanced customer satisfaction.

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Let's summarize the key points below.

Conclusion

Selecting the best e-commerce order management software is crucial for optimizing your business's operations and improving customer satisfaction. A well-chosen OMS streamlines inventory management, automating order processing, and enhancing integration with existing systems. It reduces manual errors and ensures your business can scale up as it grows.

While choosing the right OMS may seem challenging, focusing on features like integration capabilities, automation, and scalability will help you make an informed decision. Additionally, consider your business's specific needs, budget, and long-term goals to ensure you invest in a system that supports sustainable growth.

Automate the order returns process with PostShip and ensure a smooth return experience that keeps your customers returning. Start using PostShip and watch your revenue grow! Schedule a demo today or check our free plan for the first hundred orders!