Welcome to Chapter 7 of our order management guide. In this chapter, we wrap our heads around order management software, its different types, and why you must use it to be successful in order management.
Confused? Maybe this is too advanced or too basic for you? Head back to the order management homepage.
What Is OMS Software?
OMS stands for ‘Order Management Software.’ Ecommerce businesses use it to centralize and manage their orders, making it one of the most important tools in your operations. If you don’t already have one, you will eventually need it as your business grows.
Early on, some businesses can get by using spreadsheets or even pen and paper. But as order volume increases, these outdated methods become inefficient and prone to errors. An OMS saves time, reduces mistakes, and prevents information from being lost—leading to lower costs and a better customer experience.
A strong OMS acts as the central hub for your ecommerce operations. It not only manages orders but also connects with other critical systems, such as your warehouse management system (WMS), inventory software, and product listing tools. By integrating these functions, the OMS ensures information flows seamlessly across your business.
In practice, this means you can organize and prioritize orders—such as by urgency—while also tracking them through every stage of fulfillment. With built-in automation, an OMS removes much of the manual overhead, allowing your team to process more orders in less time and with fewer errors.
How Do I Choose the Best Order Management Software?
First and foremost, to choose any kind of software, you need to understand your needs. List the pain points and gaps in your current workflow to understand what exactly you are looking for before examining the market.
Then, figure out the ‘must-have’ features and the less important, ‘good to have’ features (not dealbreakers) you could live without. With a solid understanding of your business needs, you can research what’s already available on the market and compare features and limitations.
It’s important to note that what works for you might not work for another business, so don’t blindly employ a software solution because another company is using it. Your needs are likely different. They could use different solutions or sell in a very different industry. No two businesses are ever the same. There’s always the chance that your choice might be a bit of a compromise, but ideally, you’d like it to be as minimal as possible.
Check reviews to get an idea of what others are saying about the OMS, and always get a demo to be sure it works how you need it to. Keep an eye out for free features, such as additional software, that can help your operations in other areas of your ecommerce business, such as inventory management.
It is also highly beneficial if the OMS can be customized, as you may have special requirements or need to change how the software works later. You will notice that businesses that offer more features tend to come with a higher price tag, but that doesn’t necessarily mean they offer the best value for the price.
ERP (Enterprise Resource Planning) software, for example, can be the most expensive solution and can take an enormous slice of your revenue for features you have no intention of using. However, don’t just choose the cheapest OMS available. It could stunt your growth and could have bugs or other problems.
Furthermore, services that claim to be the ‘cheapest’ or ‘free’ can have hidden fees or limited deals that make them cheap for a period before slowly increasing in price. To choose the best OMS, you must strike a balance between price and features, which requires thorough research.
If you’re looking for the best OMS for your business, you may find this blog post useful: Choosing the Best Ecommerce Order Management Software.
What Are the Top 10 Benefits of Using OMS Software?
1. An OMS Keeps Everything in One Place
An OMS can act as a single source of truth for all your orders, preventing discrepancies between different services and solutions that can lead to errors that can cost your business. The OMS is the only place people should look for anything order-related. Everything related to orders is stored, shared, and worked on there. You can also integrate the different services you rely on into an OMS. Furthermore, it’s harder to trace orders from beginning to end without an OMS and solve problems.
2. You Won’t Rely on Pen and Paper or Spreadsheets
Ditch messy spreadsheets and throw away the pen and paper for a far more efficient way to keep track of your orders. People make mistakes. Handwriting can be illegible. Spreadsheets can be edited incorrectly. Manually entering order information also takes valuable time.
For a small business selling through a single channel, these methods might work in the beginning. But once you expand into multiple channels—such as Amazon, Walmart, and your own Shopify store—tracking orders manually quickly becomes unmanageable. You would need to constantly update each channel separately, and the risk of errors, delays, or overselling increases dramatically (more on that below).
An OMS eliminates these issues by centralizing all orders from every channel into one platform. This ensures your data is accurate, actions can be traced, and information is easy to share across your team.
3. Automate Repetitive Tasks
Many order management tasks—such as assigning orders, generating invoices, or sending customer notifications—can be automated within an OMS. This reduces manual workload, saves time, and minimizes the chance of human error.
4. An OMS Can Prevent You from Overselling
Overselling happens when a customer places an order for a product that’s already out of stock. This usually occurs when inventory levels are not updated in real time across all the sales channels you use. The result is canceled orders, unhappy customers, and potential damage to your seller reputation.
An OMS helps prevent overselling by keeping inventory synchronized across every channel where you sell. With real-time updates, you always know what’s available and can avoid selling items you don’t have in stock. The system also gives you visibility into order status and the entire order journey, so nothing slips through the cracks.
Even in cases where overselling does occur, an OMS can help manage alternative fulfillment methods, such as dropshipping and cross-docking (discussed in chapters 5 and 6). This ensures you can still meet customer expectations without losing the sale.
5. You Won’t Miss Orders or Send the Wrong Products
When companies use an OMS for the first time, one of the biggest things they notice is that the number of errors dramatically falls. Of course, mistakes can still happen, but less likely, and if they do, they are far more manageable.
6. Gain Real-Time Visibility Across Channels
An OMS gives you a complete view of your business in real time. You can see what’s selling, where bottlenecks occur, and how fulfillment is performing across every channel. This visibility helps you make better decisions and quickly address issues before they escalate.
7. Get Access to Reports (Depending on Software)
Reporting is not offered by all OMS solutions, though it would be very helpful if you could get it. When you monitor reports, you can see what’s working and what’s not and work towards improving processes. You can see how long it took to process an order and what common order management issues you encountered, and work towards resolving them.
8. Improve Customer Satisfaction
With faster processing, fewer mistakes, and accurate inventory tracking, customers receive the right products on time. An OMS also supports efficient returns and refunds, which strengthens trust and encourages repeat business.
9. Scale Without Adding More Staff
As order volumes grow, a manual system will require additional employees to keep up. An OMS lets you handle higher order volumes with the same team by automating and streamlining workflows, keeping labor costs under control.
10. Easily Adapt to New Channels and Growth
Expanding to new marketplaces or sales channels is easier when your orders flow into one system. Instead of juggling multiple tools, you can plug new channels into your OMS and manage everything from a single dashboard, keeping your operations efficient as you grow.
Who Uses OMS?
Every serious ecommerce business, from small businesses to large corporations and everything in between, uses an OMS. It is a no-brainer. All the big retailers you purchase from use them—no one does anything manually.
You might not use an OMS at the very beginning when you are setting up your ecommerce business because:
- You might not know what an OMS is—you may have jumped into ecommerce without prior experience.
- You might work for an old family business used to doing things a certain way—pen and paper, for example.
- You might be worried that an OMS is too technical to use.
- You might be a part-time seller who sells products online as a side hustle and is not ready to start full-time.
If you haven’t yet considered investing in an OMS, you must. It will help you survive your competitors and grow. There’s no point in learning more about order management if you do not intend to use an OMS.
You can’t rely on spreadsheets where you manually input data—you will get overwhelmed, data will go missing, get misinterpreted, or forgotten.
Key Points From Chapter 7
You’re now an expert in order management software. Remember these key points.
- Order Management Software, often abbreviated to OMS, is used to manage and track a business’s orders.
- There are several different abbreviations related and unrelated to OMS, such as PIM (Product Information Management), CRM (Customer Relationship Management), and ERP (Enterprise Resource Planning).
- Using an OMS keeps all your order management tasks in one place, prevents human error, enables time-saving with automation, and can provide useful reports.
- Using an OMS is the standard in order management—practically all ecommerce businesses use an OMS, no matter how big or small.
- Choosing the best OMS requires understanding where your current workflow falls short and researching the options that best meet your needs.
In the next chapter, we’ll show you how to manage orders with order management software.
Order Management Software FAQs
What Is the Difference between OMS and ERP?
ERP stands for ‘Enterprise Resource Planning,’ and it is software used to run an entire company’s operations. ERPs can include a wealth of features that you don’t necessarily need when looking for an OMS. They are often more designed for manufacturers than ecommerce resellers.
Furthermore, ERPs can be extremely expensive and might not be worth it if you don’t need all the features they offer. This is especially true if you run a small business. In addition, ERPs are not guaranteed to solve all your problems, and they might not be customizable to your needs.
What Is the Difference between OMS and PMS?
PMS stands for ‘Portfolio Management Software,’ and it is completely unrelated to order management. It is used by asset and hedge fund managers to manage portfolios. You do not need this kind of solution for ecommerce order management; however, it is good to distinguish it from other solutions.
What Is the Difference between OMS and PIM?
PIM stands for ‘Product Information Management,’ and it is used to manage product information. In ecommerce, you would use a PIM solution to manage your catalog information and product listings. PIM differs from OMS, which is used to handle the orders and not product listing information. Products should use the same SKUs on both PIM and OMS.
What Is the Difference between OMS and CRM?
CRM stands for ‘Customer Relationship Management’ and is not used to manage customer orders, handle customer complaints, or communicate with customers. CRM solutions only store customer information and are not used to track orders like an OMS does. In ecommerce, these solutions should be integrated, or a solution should combine OMS and CRM.