Welcome to Chapter 8 of our order management guide. This Chapter will cover the most crucial features you should expect from a reputable Order Management System (OMS).
Confused? Maybe this is too advanced or too basic for you? Head back to the order management homepage.
What Are the Functions of an OMS? 12 Must-haves
OMS functionality can vary significantly depending on the provider, so it is wise to ensure that they have absolutely everything you need before selecting one.
Think of these 12 functions as your checklist for a good OMS. Without these functions, you may need more than one solution for order management, which can be costly, risks information loss, and prevent you from utilizing crucial time-saving features.
Are you wondering how to choose the best OMS for your business? Then you need this blog post: Choosing the Best E-commerce Order Management Software.
1. Order Entry
At the bare minimum, your OMS should enable you to input orders into the system. This should include details like:
- Products ordered.
- Customer details.
- Quantities.
- Any special instructions.
Furthermore, your OMS should be able to do this for all your sales channels, whether online or offline—not just your online marketplaces and websites but also brick-and-mortar stores.
All orders, whatever their origin, should be found in one place so you don’t have to hop between marketplace dashboards to update order information, and your inventory doesn’t get out of sync.
Your OMS should also be able to input wholesale orders, which often need to be manually entered. You will likely receive them when a wholesaler contacts you through email or phone, not a marketplace.
2. Inventory Management
Another vital feature you should expect from a good OMS is inventory management. When an order is placed, it should be reflected in your inventory so you can keep track of it.
Some of the most crucial inventory management features your OMS should offer include:
- Real-time inventory tracking—You should be able to see how every order impacts your inventory, so you always know how much inventory you have on hand.
- Updating quantities—As orders are received and fulfilled, know exactly how much you have, where it is, and in what stage of the process it is.
- Low stock level alerts—Get notifications whenever inventory levels are low so you can reorder.
- Differentiate between physical and sellable inventory—Physical inventory is what you have in stock, and sellable inventory is what you can sell. Differentiating the two can help you manage your inventory better.
- Pending order reserve—Reserve inventory for an order that hasn’t been paid yet.
It is also beneficial that when an order comes in, inventory is already reserved for that order, so you don’t accidentally sell it and end up overselling.
Looking to learn more about inventory management. Check out our inventory management guide here.
3. Order Processing
An OMS must be able to follow the entire order process, from the moment an order is made all the way to its completion and every status change along the way.
You should also receive status updates on orders so you know where they are in the fulfillment process and don’t lose track of them.
If customers call you asking where their order is, you should be able to find it immediately. Furthermore, you should be instantly notified when a problem arises.
4. Order Fulfillment
Order fulfillment is a broad term that includes tasks such as picking, packing, and shipping orders. A more advanced OMS can offer custom packing slips and sorting activities to help make order fulfillment even more efficient.
5. Payment Processing
Your OMS should integrate with payment gateways to securely process and confirm order payments.
Having multiple payment methods makes it easier for customers. You are also less likely to lose a customer because you don’t have their preferred payment method.
Sellercloud’s Waytopay.me, for example, is a solution that enables sellers to send a link to customers where they can pay for their orders.
6. Shipping and Logistics
There are tons of different shipping and logistics features available for OMS. It should at least enable you to calculate shipping rates, generate shipping labels, and track orders.
Even better, your OMS can include custom logic, to help you choose the best shipping for your needs.
Sellercloud’s free shipping software, Shipbridge, enables businesses to automate tasks, use single-scan shipping, and automatically choose the best shipping option (based on time, price, delivery deadlines, and other factors).
Sellercloud also offers high-level management features, such as its RTC (Real-Time Connect), which provides a real-time overview of all shipping installations.
It also enables you to ship and unship an order remotely, send announcements, and force logout users if needed.
We will cover all the details for shipping in the next Chapter!
7. Returns and Refunds
The bigger your business, the more returns and refunds you might receive. It’s a part of doing business; you need to accommodate it and make it easy to handle.
Not only should your OMS be able to issue and process customer refunds, but it should also be able to issue RMAs and update inventory levels to reflect the returned stock, and it should all be trackable.
Sellercloud’s Orderback is an example of such a solution. Orderback is a dedicated customer portal specifically for helping sellers manage their returns and refunds and spend less time dealing with customers.
8. Reporting and Analytics
Reports and analytics are essential for growing your business as they show you where you could be doing better, how you can grow, develop an acceptable level of service, and inform your decision-making and business strategy.
Your OMS should provide you with reports on:
- Orders.
- Inventory.
- Shipping.
- Financials.
- Payment reconciliation.
Each of these categories could contain various different reports. However, the kinds of reports available can vary significantly depending on the OMS.
9. Integration with Other Systems
An OMS should oversee your operations and sales channels over multiple platforms and tools. It should be where you plug everything in for a top-down view.
Some of the most important are CRM systems, accounting software, and anywhere else you may need your sales data to go. Data should be streamlined from your OMS to these tools.
10. Scalability
As your business expands and order volume increases, your OMS must be capable of handling the changing workload without denting its performance and reliability. Your company may experience seasonal periods or hold sales where orders increase.
You don’t want your OMS to overload and become unable to fulfill orders or miss information. As you grow, your orders might also get more complicated and may have more requirements, so this is very important to consider.
11. Customer Communication and Management
Customers may contact your business for various reasons, and you must be able to respond to them. Some may be simple questions, such as ‘Where is my order?’ Others may be complaints or about issues they have with a product.
Your OMS must be able to handle this kind of communication. It should also enable you to send confirmation emails and shipping notifications to keep customers updated with their orders with a click of a button or, even better, automatically.
A more advanced OMS, like Sellercloud, also lets you keep track of wholesale customers, which is particularly useful when setting up payment terms.
Sellercloud’s Memaila is an example of a customer communication solution. It allows e-commerce sellers to manage customer conversations over multiple channels using different communication methods.
12. Customization and Configuration
A top-shelf OMS needs to offer customization and configuration options to customize it to work how you need it to. No two businesses are ever the same, and every company will have something different about its workflow.
You shouldn’t have to bend your workflow to use an OMS; you should be able to modify one to suit your business needs.
Key Points From Chapter 8
You now know precisely what features to look for when searching for an OMS.
- There are a variety of features you should expect a robust OMS to offer. Without the features we have listed in this Chapter, you will need more than one solution, which is not ideal.
- At the very least, you should be able to enter, process, and track orders. However, a more advanced OMS can offer you much more.
- Reporting and analytics can reveal a lot about how your company works and help you make better decisions.
- Scalability, integrations, and customization are some of the more advanced features offered by an OMS, which are very helpful to have.
- Sellercloud comes with various tools and software to manage a business’s orders.
In the next chapter, we cover everything you need to know about shipping.