June 11, 2014

How Order Management Works

Order management is a significant part of any business operation as it connects inventory and customers. It starts right from the moment a customer places an order and ends when the customer receives it. Many times, eCommerce merchants connects with the customers after few days to know how happy they are with their products. Although it seems easy, there are lot many intricacies involved in this process. Let’s have a look at the process in detail.

Steps involved in order management
  • When the order is placed, the merchant will pick the ordered items from the inventory and ship it to the customers
  • Send email notifications to the customer, informing him/her about the shipment status
Problems involved in the process
  • The merchant may be facing an out-of-stock situation when he/she received an order. So now the merchant has two options: either he/she can partially ship the order and request the customer to wait for few days to receive other part of the order, or he/she can ask the customer to cancel the order altogether.
  • Sometimes the merchant may not stock all the items, especially when he/she is selling thousands of items. He/she may be using drop shipping, asking the manufacturer to directly ship the item to the customers.
  • Another potential area of problem is when the merchant is using fulfillment warehouse. When the cost of carrying inventory rises too much, many merchants use third-party warehouses to store their inventory. When the merchant using such facilities receives an order, he/she forwards the order information to the warehouse party, who in turn will ship the goods directly to the customers.
Execution of the process

As I said earlier, many times there can be multiple parties involved in the order management – merchant, customer, shipping company, manufacturer/vendor, and/or fulfillment warehouse. To co-ordinate between all these parties, the merchant will need to use series of communication tools, including email, fax and phone calls. This method is feasible until the operations are small. As your business starts expanding, problems will start cropping up in this system. So in this situation, it’s better to use order management software.

What can order management software do?

Through order management software, a merchant can automate the entire process – right from the moment a customer places an order to the moment when the customer receives an order. Merchants can even set reminders to follow up with customers. Through an order management system, a merchant can:
  • Send automatic order details to the involved parties
  • Keep track of your inventory through a centralized inventory system
  • Co-ordinate with various parties involved through a set procedure
  • Send automatic shipping information to the customers
  • Follow up with the customers to gather their feedback
Do you need help in implementing such order management system? Contact us.


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