What Is Order Management? The Ultimate Guide

Online shopping - the current pinnacle of modern convenience that everyone engages in at least once a week if not more frequently. People click on items displayed on a website, go through the checkout process and oftentimes, they receive their purchased items the very next day. 

That’s all there is to it, at least from the customer’s point of view. What happens backstage is a whole different story and it’s called order management. From the moment a consumer makes a purchase to the moment their items are delivered to their doorstep, eCommerce businesses are in overdrive. 

The goal is to meet customer expectations and ensure their satisfaction. Otherwise, consumers will simply choose another store and there isn’t any shortage of those. 

Yes, meeting customer expectations and needs is quite difficult in today’s competitive market. This is exactly why a seamless order management process is required, so that your customer can have their order fulfilled in a timely manner. 

What Exactly is Order Management?

Simply put, order management is a process of managing customer orders from the moment a purchase is made until products are delivered to customers’ homes. Everything that happens in between falls under order management, which includes order fulfilment, product packaging, labelling and shipment. 

How Do eCommerce Businesses Manage Orders?

Every online store has a unique way of processing orders. The key is to do it effectively, which is why some businesses leverage technology while others have a fully-equipped fulfilment centre for managing orders. 

Then again, there are stores that utilise both. It all depends on how large the business is and how long it has been operating in the market. That said, small and new eCommerce companies often have limited budgets and must find other means to manage order fulfilment and deliveries. 

Nevertheless, order management process flow has specific steps that should be followed thoroughly if you wish to deliver goods to customers on time. So, let’s have a look at those steps in detail.

1. Order Received

When customers make a purchase, your system accepts and processes the order immediately. Now, this can be done manually by your employees or it can be automated if you’re using the right software solution. Either way, once the order is received, the information is forwarded to the folks responsible for order fulfilment.

2. Order Fulfilment 

Equipped with the right information, your employees can fulfil the order that has been received. But what does that mean, exactly? Simply put, your workers can hand-pick products, package them and label the boxes accordingly, after which they’ll make them ready for shipping. 

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This process can also be automated if you have software solutions and mechanisation like robotics. In that case, employees must only oversee the process and not do any actual manual labour. 

3. Shipping Out

Now that the products are picked, packed and labelled, they are ready to be transported right to the customer’s doorstep. In this step, your fleet takes over the shipping process. If you want to make sure everything is delivered where it should be and on time, it’s advisable to use a transportation management software (TMS) so that you can plan a route, avoid traffic and have 24/7 monitoring of goods in transit. 

4. Returns Management

As you may already know, not everything goes as planned all the time. Sometimes, a customer may be dissatisfied with the product because it doesn’t quite match customer needs or it got broken or damaged en route. If that’s the case, the customer will want to return the product and get a replacement or a refund. 

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You must be ready for that, if it happens, to begin with. Therefore, the last step of order management is to prepare for returns and ensure that customers get what they want regardless. This keeps customers content and ensures their satisfaction doesn’t drop drastically. 

Looking Beyond the Order Management Process

Looking at things from the outside, order management looks pretty straightforward and simple. Unfortunately, nothing is ever as simple as it may seem. 

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The aforementioned steps are just the main stages in the entire process. Tha said, there are many more things happening beyond these stages that ensure everything runs smoothly. So, let’s have a look at a couple of these other workflows.

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• Inventory Management - Once the order has been received and fulfilled, it’s crucial that eCommerce businesses conduct an inventory check as soon as possible. After all, you won’t be receiving a single order a day. 

There will be dozens if not much more. This is why you need to manage your inventory all the time. If the orders keep coming in, while your stock is running low, you won’t be able to meet the demand. Selling items and resupplying stock is, therefore, the essence of order fulfilment. So, as soon as you notice that your inventory will be depleted if consumers keep making purchases at this rate, you must contact your suppliers and order a new batch. 

• Order Tracking - Once the goods leave your warehouse, you’ll need to track them 24/7. You never know if something may go terribly wrong. For example, your transport vehicle may end up stuck in traffic, get lost or become involved in an incident. Such delays mean your customer won’t get their order on time. 

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If you keep track of your orders, you can immediately fall on a contingency plan the moment you realise the issue won’t or can’t be resolved quickly. That way even if something should go wrong, you’ll manage to deliver orders regardless. 

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• Customer Followup - When the products have been delivered to your customers, it’s essential that you follow up with them. Questions like: “Are you satisfied with your order?” or “Would you be so kind as to tell us about your experience? Keep customers happy and engaged. 

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This allows your sales team to push cross-sell and up-sell offers, discounts and promotions to further boost sales and retain customers. It’s all about not losing momentum when you have the opportunity to sell additional products to satisfied customers. 

How Does Improving Order Management Help Online Stores?

Boosting order management process flow and overall fulfilment services opens new opportunities and new doors for your company to prosper. The more efficient your processes are, the more convenience you’ll be able to provide to your customers. 

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If modern customers prefer anything, it’s convenience and lots of it. That said, let’s have a closer look at how improved order management works in your favour. 

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• Added Value - Consumers love when they get extra value for their purchase, and you’re gonna give it to them. Improving order fulfilment services allows you to include added value to purchase like next-day or same-day deliveries and even free shipment if you’re being tactful. Sure, this added value might strain your business endeavours and budget, but happy customers are returning customers who spend more on orders than new leads. 

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• Word-of-Mouth - Now, this is a marketing strategy that many businesses often neglect. While being solely focused on sales and profits, businesses forget the importance of ensuring customer satisfaction and loyalty. Boosting order management allows you to meet consumer needs and expectations, if not exceed them entirely. 

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In return, loyal customers recommend your store to everyone. So, kill two birds with one stone by a) delivering on customer expectations and ensuring both their loyalty and satisfaction, and b) save money on customer acquisition through marketing efforts. 

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After all, your customers will bring in new customers through word-of-mouth, which is more effective than any marketing strategy you can come up with. It’s not that you’re incapable of creating effective marketing campaigns, it’s just that consumers trust other consumers more than they trust businesses or brands.

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• Omnichannel Fulfilment - If you want to succeed, you have to be where your customers are, right? That is entirely true, especially in today’s online market where consumers like to have as many options as possible. 

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Allow them to shop from any point of sale they prefer and you’ll have a horde of loyal customers in no time. Of course, you can only make this possible by improving your order management process. 

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If you do, then consumers can use your website, mobile app, social media and many other channels to make purchases from your store. More convenience leads to more engagement from potential prospects and existing customers.

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• Speed to Market- The faster and more accurate your order management process is, the greater the likelihood that you’ll outrun your competition. That’s why speed to market is arguably one of the most important benefits an eCommerce store can gain from improving their order management. 

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The more order’s you’re able to process at any given moment, means more sales and improved customer satisfaction. Thriving in a very competitive landscape often comes down to being the fastest.

Best Practices for Improving Your Order Management

When push comes to shove, your best bet at improving the overall order management process is to rely heavily on modern technology. It doesn’t just make your and the lives of your employees much easier, but modern technological solutions have some truly fascinating capabilities. 

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Modern software like System Applications and Product (SAP) allows you to plan finances, boost customer satisfaction and manage your inventory effectively. An all-in-one solution to be sure. But that’s just the tip of the iceberg. There are so many different solutions for different purposes and if you can’t get your hands on one of them, you can find a third-party logistics (3PL) company to lend you theirs.

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 In other words, everything is achievable as long as you plan accordingly. But, technology isn’t the magic bullet that will solve all your problems. You also need an effective team and efficient business practices that will be supported by technology in a customer-centric approach. So while getting your own house in order, keep these few things in mind. 

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• Ensure order and information accuracy
• Streamline order fulfilment process
• Leverage strong company policies, especially return policies
• Use CRM (Customer Relationship Management) software to determine your target audiences’ needs, wants and expectations.
• Always keep up with the latest market trends
• Forecast demand and manage inventory accordingly
• Ensure your entire supply chain runs as a well-oiled machine at all times

Take Your Order Management to the Next Level With Bezos 

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Order Management ensures that your customers get what they want, when they want it. Of course, that’s easier said than done, especially considering just how many processes are actually involved in managing orders every day. 

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That can be quite overwhelming, especially for new online stores that are just establishing their foothold in the very competitive market. But that’s why Bezos is here and we want to help out. Feel free to outsource your order management to us and we’ll make sure your business is on the right track. Reach out today and we’ll have a quote ready for you. 

Conclusion: Reach Business Success With Order Management

Running an eCommerce store is all about catering to your customers. Without them, there are no sales and with no sales, there are no profits to be made. This is why order management is such an essential process for every online store. 

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If you don’t optimise it, you simply won’t be able to meet the ever-growing consumer demand for both convenience and quality. Therefore, don’t hesitate to rely on technology and best practices that will elevate your order management process to where it needs to be, so that your customers will be more than happy to make purchases at your store.

FAQ:

What are the four stages of order management?

As mentioned before, the entire process of order management revolves around four major steps that are pivotal for your online store. Although there are numerous supporting processes that go alongside everything, it’s of the utmost importance to follow through these four stages, first and foremost.

• Receiving Orders
• Auftragsabwicklung
• Versand
• Returns

What are the duties of order management?

The primary duties of any order management process is to ensure that information regarding customer purchases is accurate so that corresponding products can be picked, packaged, labelled and delivered on time. The main purpose is to optimise the entire workflow for maximum results. 

What is SAP in order management?

SAP or System Applications and Product is technically a part of the larger ERP (Enterprise Resource Planning) solution. Its purpose is to encompass all business aspects and not just one related to order management. 

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That includes financial planning, inventory management, customer relations, marketing and many more. The end goal is to boost sales and customer satisfaction in the process. 

How important is order management?

One may say that order management is the foundation for every online store’s business success. Order management ensures that orders are fulfilled and that customers are happy. If you cannot manage orders accordingly, consumers won’t buy anything from you. It’s a simple yet harsh reality about operating in today’s online market.

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