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Order Management & Order Processing Guide For Growth

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As ecommerce technology continues to evolve with user-friendly apps, social media shopping capabilities, and third-party platforms, online businesses are constantly adapting to new selling environments and buyer preferences. This ebb and flow can make online order management a real challenge, and often requires the use of backend tools to meet (and hopefully exceed) customer expectations.

With the aid of order management software and solutions, ecommerce stores can address these concerns in a flexible, efficient, and cost-effective way. Order management helps brands easily fulfill any order volume and deliver high-quality customer service with every interaction.

What is order management?

Order management encompasses the receiving, routing, tracking, and fulfilling of customer orders. This process begins once an order is placed, and ends when the customer receives their goods. In certain cases, it may even include the return process, since this is also a component of the product lifecycle. As you continue to grow and innovate your ecommerce brand, it becomes increasingly important to streamline your approach to order management — which is most often achieved with advanced automations (via intuitive software).

What is order processing?

why you need order management system

Order processing is rooted in the workflows or processes that guarantee customer orders are properly prepared and delivered. Order processing is an integral part of the order fulfillment strategy for a product-based brand, wherein consistency and accuracy are intrinsically linked to customer satisfaction levels. Depending on the size or scale of your operations, order processing might happen within a central warehouse or distribution center to complete the necessary steps associated with picking, packing, and shipping.

6 stages of order processing

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Successful order processing involves a number of moving parts that come together to offer a cohesive customer experience. Each stage of order processing is just as important as the next, because missing even one piece of the puzzle means orders cannot be fulfilled accurately or on time. Here’s a quick overview of every step in the order processing cycle.

Successful order processing involves a number of moving parts that come together to offer a cohesive customer experience. Each stage of order processing is just as important as the next, because missing even one piece of the puzzle means orders cannot be fulfilled accurately or on time. Here’s a quick overview of every step in the order processing cycle. 

1. Receiving 

Order processing kicks off whenever a customer places an order with your business through any of your active selling channels. This initial step includes accepting the order as well as collecting payment from the customer for their items. Once that’s finished, the order details are passed on to the appropriate warehousing or fulfillment center, where designated team members begin preparing the products for shipment. 

Note that to simplify receiving on the backend, you’ll need a multichannel or omnichannel fulfillment tool to automatically transfer information (like shipping info and delivery addresses) from your ecommerce sales channels to your order management system. 

2. Picking

Picking is the second stage of order processing, and the first of two steps related to order fulfillment. At this point, select items are retrieved from your warehouse; since warehouses are typically lined with shelves that are each stocked with different SKUs or product types, the fulfillment team needs to be able to locate the right product as efficiently as possible. The way your warehouse is organized — plus any additional warehouse management system or inventory management tools you use — directly impacts the time it takes to pick each order.

3. Packing

After every item has been picked, they’re then transferred to a packing station. This second step in fulfillment (third in overall order processing) has more responsibilities than simply packing items and sending them off for shipping, however. It’s also the time to make sure each product has the required packaging, cushioning, or padding to reach the customer in good condition. 

For example, fragile items like glassware have to be packed with bubble wrap or air pillows, and placed in a suitably-sized box. Implementing these practices will help avoid using excess materials and minimize the dimensional weight while still providing sufficient shipping protection.

4. Shipping

Now that the order has been picked and packed, next comes the shipping stage. Anyone working at the shipping station has to carry out three main tasks: attaching the correct shipping label and packing slip to the order, marking the order as ‘shipped’ in the appropriate sales channel system, and emailing the customer to confirm shipping costs and/or tracking numbers. 

Remember that picking, packing, and shipping will only go according to plan if you have the necessary products on hand. In the event a customer orders a product that’s out of stock, you can either turn them away, or opt to delay delivery through backorders or dropshipping.

5. Tracking

Once an order has left your warehouse, it’s time to move into tracking mode. Not only can the customer see their order status along the delivery route, but order management systems allow your business to track the package’s progress, too. And because packing and delivery errors are all but eliminated thanks to cutting-edge order processing and management solutions, there’s a much greater chance the order will arrive exactly as expected.

6. Following up

The final stage of order processing is centered on after-sales communication, like following up with customers to collect feedback, making sure they’re satisfied with their purchase, and assisting with any returns or refunds (if needed). But this step isn’t all about boosting your brand’s image — staying in touch with your customer base can help you determine why they keep coming back to your online store, and support you in increasing the lifetime value (LTV) of each customer, as well. 

What’s more, identifying recurring problems can also help your business improve its customer engagement. Understanding the root issues tied to customer dissatisfaction will allow you to address things head-on and prevent similar obstacles from cropping up in the future.

What is an order management system?

An order management system (OMS) is the software used to organize and automate order entries and order processing. Order management systems offer a complete view of every customer order and allow merchants to manage the entire order fulfillment process in one place. That’s because most modern systems are equipped with a two-way sync, where relevant order information is shared between your OMS and your preferred ecommerce platform (thus providing tremendous visibility into every stage of your fulfillment services). 

With the right system in place, businesses can understand inventory performance and pertinent KPIs, make informed inventory decisions, and ultimately, increase their revenue year-over-year.

How does an order management system help your business scale?

Professional Female Worker Uses Digital Tablet

Investing time and money into an order management system can feel a bit daunting if you’re a young ecommerce company operating with a small team. A legacy ERP like NetSuite can cost large sums of money and sometimes a year to fully implement — not to mention, these legacy systems were never built to support the agility and multichannel nature of modern direct-to-consumer brands.

Whether you're selling on Amazon, Shopify, BigCommerce, or any other combination of marketplaces, retail platforms, and big-box retailers, having a reliable OMS is inextricably tied to your ongoing success. To stay ahead of your competitors, delight your customers, and become a leader in your product category, order management is really the best way to take your brand to the next level (and beyond).

The following are the top five reasons why your ecommerce business needs an order management system integrated into your existing operational workflow.

1. Order accuracy

Order accuracy is a key element to increase customer satisfaction, and order management systems make sure each of your sales orders are fulfilled exactly right every time. As your shop grows and you see a higher volume of orders, human errors are much more likely to occur if you’re still relying on manual processes. Hiccups like shipping the wrong product or using the wrong mailing address can, unfortunately, damage the reputation of a burgeoning ecommerce business. But by incorporating a trusted OMS, you can receive and ship the right products with ease and efficiency. Streamlining your daily tasks with order management software allows you to fulfill orders quickly and correctly, so you can scale up without becoming overwhelmed.

2. Faster deliveries

Even if you’re not an expert in ecommerce fulfillment, when you use order management solutions you’re bound to feel like one. With advanced management systems, order routing, and automation, picking and packing can be done in considerably less time and with much less difficulty on your part. This means rather than falling behind trying to fulfill every order on your own, you’ll have a much better turnaround for your products to reach the customer. And these faster deliveries translate to an improved customer experience, plus more hours in the day for you to spend on developing new SKUs or building your brand. 

3. Accurate stock counts 

Keeping an accurate record of your stock counts is essential for avoiding the dreaded snags of overselling or understocking. Order management systems ensure your stock counts are more precise than ever, due to real-time data, automatic inventory control features, and the ability to connect into multichannel and multi-distribution ecosystems. When the order management process is in effect, you won’t have to worry about the risk of backorders or delayed shipments, because you’ll feel confident the items a customer ordered are on your shelves and ready to go.

4. Remote management

A wonderful, sometimes overlooked perk of order management systems is that business owners don’t need to be on premises in their warehouse. Inventory and order management can be done from a distance with the help of order management systems, a benefit that feels increasingly important given the shift toward remote work we’ve seen over the last several months. This flexibility and autonomy is incredibly valuable for merchants of all kinds, and is a great resource to utilize as we continue to navigate new safety protocols within our work environments.

5. Automate the order process

An order management system is a one-stop shop for handling all aspects of order fulfillment, automatically. Order processing is notably more efficient when using management tools, since the synchronization between your chosen system and ecommerce platform offers full visibility into your processing operations. Automations also allow you to track the entire journey of an order, from when the customer clicks ‘buy’ to when the item shows up on their doorstep. 

This insight is paramount in ensuring packages always arrive on time and intact, regardless of what’s ordered or where it’s going. On top of that, order management systems can also help replenish stock if/when demand accelerates. Many OMS, like Skubana, can automate purchase orders, send inventory alerts, and transfer inventory to areas of higher sales demand.

 

Industry trends that will impact the future of order processing

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There are a number of industry trends on the rise that will largely impact the future of order processing and order management as a whole. By studying these trends and making pivots to accommodate consumer behavior and buying patterns, you’ll be able to keep your customers happy, loyal, and position your company for even greater growth.

Continued adoption of cloud technologies

Cloud-based software is no longer the way of the future — it’s the best way of conducting business right now. In fact, today’s cloud technology offers countless opportunities for retailers to drive revenue while simultaneously meeting their customers’ unique needs. That’s because cloud services eliminate undesirable data silos, and instead share all inventory and order information within one central (and convenient) database. 

Cloud access helps business owners to closely track each phase of order processing, whether they’re physically at the warehouse or working from a remote location. In other words, little to no hardware is required at your fulfillment center, which cuts down on costs in a significant way and allows verified users to access these cloud systems from anywhere in the world. 

Increased use of multiple warehouses

If the last few years have taught ecommerce sellers anything, it’s the importance of diversifying warehouse storage across region, country, or even the globe (whichever is most applicable). When goods are stored in multiple, distributed warehouses, it gives your approach to order processing some notable advantages, like faster delivery times and lower shipping costs — which then also supports greater customer satisfaction. 

The key to successfully managing multiple warehouses is first investing in quality software solutions that’ll make monitoring your different locations a breeze. By implementing advanced order and inventory management systems, you’ll have a much easier time overseeing your network of warehouses (and likewise reduce the risks of operating out of a single facility). 

Greater reliance on automations

While automations are certainly on trend within the world of order processing software, they’re far from a flash in the pan. Rather, automations will continue to improve and evolve so they’ll serve the flow of order management even further. As tools like location tracking and real-time inventory reporting become more and more fine-tuned, the impact these resources can have is almost limitless — decreasing carrying costs and fulfillment times is just the beginning.

Additionally, with the help of innovations like Orderbots, merchants can automate repeatable tasks for a whole slew of sales order responsibilities. More succinctly, Orderbots have the ability to automate your ordering process (and your order processing), making both ventures more effective and saving you valuable time and money to be used elsewhere.

3 companies that leveraged Skubana to scale

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For years, Skubana has been helping businesses create better customer experiences with industry-leading order management solutions. The primary purpose of Skubana’s distributed order management (DOM) is to improve how your ecommerce store processes and manages customer orders and inventory across your entire ecommerce landscape.

Skubana’s DOM is a pivotal player in fulfillment optimization, as it ensures orders arrive on time and at the lowest possible cost. Additionally, this software automates several necessary functions to improve your supply chain: order routing, order splitting, bundling and kitting, inventory forecasting, reordering (via automated POs), and inventory management

The DOM system from Skubana also simplifies stock replenishment by creating a central platform with a single viewpoint into each of your inventory items. With this platform, businesses can be sure current and future consumer demand is met, while also balancing the need for improved budget control, inventory levels, and back-office logistics.

The following are three examples of how Skubana’s order management has helped companies scale up, cut costs, and overcome supply chain challenges at the same time. 

1. Vincero increased business efficiency with automation

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Vincero is a quality, yet affordable watch brand that gives its young customers a serious confidence boost. When Vincero was ready to grow their business and enter into new regions, channels, and volumes, Skubana helped bring their vision to life

With Skubana’s management solutions, Vincero was finally able to move away from their outdated manual processes and instead automate the full scope of their order handling. Today, things like routing, editing, or canceling orders are easily accomplished through Skubana’s unified order management platform.

“Everybody says the most valuable thing is time. I think what Skubana's done, is it has given us a lot more time. So many things are now automated, and when new things come up, Skubana’s team works with us to implement new solutions." — Anthony Tartaro, Vincero's first employee

2. Tushy's 10x transformation

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Tushy is on a mission to transform the American bathroom into a healthier, more sustainable, and more delightful space in our homes. And while Tushy’s bidets have been on the market a few years now, the nationwide shortage of toilet paper in the spring of 2020 gave the company an unprecedented surge in sales — triggering a six-week wait for backorders.

With the help of Skubana’s order management software, Tushy was able to pivot from an on-demand fulfillment company to a backorder company in mere days. Skubana played a crucial role in supporting Tushy through this shift in their fulfillment process, by providing greater order control, better order handling, 3PL recommendations, and cutting order lead times by half.

"Not only have we scaled 10X in a matter of months, but we're navigating a completely different inbound and outbound supply chain. Skubana has been able to scale alongside us from an order volume perspective, and helped us onboard a new 3PL in lightning-fast time. It sounds salesy, but I point to Skubana as one of the best decisions we've made in the last year and the key to our success." — Justin Allen, Tushy COO and Co-Founder

3. Death Wish Coffee delivered on demand

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When Death Wish Coffee won Intuit’s Small Business Big Game competition and received a 30-second commercial during 2016’s Super Bowl, they understandably saw a huge spike in sales. The only downside was, they didn’t have the systems in place to handle it all. 

Death Wish needed a management solution as strong as their brew, and Skubana really delivered. Now, with one warehouse, two 3PLs, dozens of flash sales, hundreds of kitted products, and thousands of orders fulfilled, Death Wish is the epitome of operational efficiency.

“While we’re sleeping, Skubana is crunching large volumes of moving data in real-time, and always calculates the right quantity at the right time. It automates half of our operations and accurately informs the rest. Since we’ve integrated Skubana, we’ve yet to oversell one single item.” — Dustin Alexander, Death Wish Coffee’s Logistics Manager

Why trust Skubana to get order management right

Omnichannel retail is increasingly complex, yet order management is a terrific way to unify, automate, and grow your business in this new age of commerce. Skubana has mastered the art of these three qualities and is proud to be a trusted leader in ecommerce order management.

Unify

Skubana is truly a home for everything and everywhere you sell, having designed a single, unified platform that brings clarity to ecommerce order management at every stage. In addition to uniting your multichannel operations within one dashboard, Skubana provides assistance with tracking pricing, minimum order quantities, and production lead time across every supplier. 

The innovative order management system from Skubana reduces inefficiencies among your team, and identifies opportunities for your company to achieve exponential growth. Ecommerce stores of all sizes are reaping the benefits of Skubana’s improved inventory visibility, continual warehouse updates, and more. 

Automate

Skubana’s multichannel automations are the best option for driving efficiency, lowering costs, and amplifying your business intelligence. When you automate order management rather than relying on manual processes, you’ll see just how well your supply chain and fulfillment can flow. Skubana’s management software can automate a variety of daily tasks, whether you’re tracking the delivery of customer orders, monitoring counts across multiple warehouses, or sourcing real-time data on your stock levels.

Simply put, automations are vital to order orchestration on every channel, as they help maintain inventory control and make sure you never undersell (or oversell) ever again.

Grow

Skubana has the order management tools you need to power (and grow) your ecommerce success well into the future. With Skubana’s forecasting features, your business can increase its profits across all warehouses and channels, all the way down to the SKU. Plus, retailers can secure profits, track savings, and discover new avenues to improve their bottom line.

To bring about quality, scalable growth, you have to pair intentional effort with the right resources. Fortunately, Skubana’s cloud-based management systems have the functionality your store needs to perfect orders, amplify your top sellers, and expand at every level.

Conclusion

Utilizing an order management and order processing system is a non-negotiable for anyone and everyone running an online store. Skubana can easily upgrade your business processes by serving as a hub for everything you sell, organizing the flow of your orders, and providing insights that are essential to your profitability.

If you’re interested in optimizing your cashflow, leveraging automated processes, and protecting the integrity of the customer’s journey, consider booking a free demo from Skubana today!

 

Order Management FAQ

  • Why is order management important?

    Order management is important to ensure efficient order fulfilment. This is especially important when it comes to scaling your business across multiple channels so that you automate the process of receiving, tracking and fulfilling orders

  • What are the key steps in the order management process?

    The order management process is when businesses keep track of an item from order to fulfillment. This involves receiving the order, picking, packing, and shipping the order, and then tracking the order until it is delivered to the customer.  

  • How can I improve order management for my ecommerce business?

    You can improve your ecommerce order management in three simple steps: consolidate your inventory data, automate repetitive tasks, and optimize your fulfilment process. With a program like Skubana, you can do all of this in one place and increase business efficiency.

  • What is a distributed order management system?

    A distributed order management system, or DOM system, arranges orders across the supply chain. A DOM system prioritizes orders from customers and business partners using inventory data.

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