What is Order Management : A Complete Guide

Surya SK
October 14, 2021

So, what is Order management? Well, when a customer buys a product, the journey of an order starts.

When a new order is being placed on your online store, the person in charge of storing your inventory has the responsibility to select, package, and ship the products to the right person at the right place.

This might not seem difficult when you're starting a new business as it is easy to manage a few orders that come in on a day-to-day basis, and you can quickly take care of them in a cost-effective manner. 

You don't face any form of obstacles at this stage; however, as the number of sales continues to expand and the number of mediums multiply, an order management system can help remove the potential hassles that you can face as an eCommerce store. We'll be looking in-depth about how an order management system can make your job so much easier!

Table of contents

What is order management?

For every order placed with an e-store, a background process runs until the product reaches you in hand. This process, on the whole, is referred to as order management, which is responsible for keeping track of orders and processing the steps involved in getting the product in hand to the customer. Order management is generally a 5-step process that consists in undertaking the order, picking the product, packing the ordered products, shipping the products, and finally, tracking the product till it gets delivered.

What is the importance of order management for eCommerce Businesses?

Now that you know what order management is, Let’s see how order management impacts eCommerce businesses and the factors which make OMS essential for all eCommerce businesses: 

Prevents over & under stocking

An inventory with a high turnover ratio can be a good factor, considering the fact that you aren't over-stocking or under-stocking your products. Overstocking can cause you to lose too much money on unmoved products, and understocking can potentially make your customers wait too much, especially if your product is in demand. This can cause you to lose profitable sales and give it away to your competitors as the customers who were waiting for you would now be your competitor's customers. 

Prevents over & under stocking

Fewer errors on fulfilling orders

When you have fewer orders to manage in a day, it is pretty impossible to make fulfillment errors. All you need to process is to pick out the right product, pack it safely, print your shipping partner's label and send the package. 

This isn't the case when you have large quantities of orders to process and have customers all over the world who are buying through multiple mediums 24/7. At the same time, you have customers who are constantly inquiring you about their order status, estimated delivery date, and asking for refunds on the other hand. At this point, when you have so many tasks in hand to take care of, it's easy to slip and start making errors. For example, you could mess up by packing the wrong products, send the item to a different address, face issues related to shipments, and move on. 

These minor errors can potentially affect the reputation of a developing eCommerce business, which is why it's essential to have a smooth running order management system for your eCommerce business. With more automation and strategy, you have less potential to make mistakes and put your company in jeopardy. 

Reliable data

It's pretty challenging to classify data when it's disorganized and distributed across different platforms. A proper Order management system allows you to view all the data in one place, making it simpler to analyze data and make decisions depending upon the data. 

An efficient order management system showcases the orders of your customers that are distributed location-wise. With this data, you can distribute your inventory across to your customers. Storing your stock closer to a place where your customers live can help cut down on shipping costs and deliver products at a faster rate. 

Order management systems also help to view issues and problems in-depth and with clarity because you can view the entire picture instead of as separate entities. This potential to make decisions depending upon accumulated data can cut down costs exponentially in the long run. When orders are high, fixing even the minute issues can have an impact on your supply chain optimizations and overall outlook. 

Reliable data

Faster execution of processes

When you're running an online business, nine times out of ten, you're the founder, entrepreneur, and idealist who has motives. Even if you're all three, the one thing that you don't do is fulfill expertise. ECommerce fulfillment issues take a long time to be solved and the effort put into solving fulfillment issues can be channeled towards building a brand name and developing your product. When you're starting, it's OK to take care of aspects like packing products, shipping, refunds, etc. But, once you grow out of the initial phase, it's better to focus on better aspects. which is why an OMS is needed. 

Benefits of order management

An order management system can help take the businesses to the following levels by increasing visibility during every stage of the sales process, managing time efficiently, negating human errors, and enhancing accuracy. Here are six benefits of the critical benefits highlighting the importance of an Order management system:


An Order management system depends on automation, and an automated order management system saves so much time over labor and time. This allows less space for human error in invoicing and data related to orders and gives time and space for organizations to channel their energy towards development and customer fulfillment. OMS also increases the security of data as the need for manual intervention is relatively more minor. 

24/7 access

There is 24/7 access to OMS for Businesses, as they can access their system from any place and at any time. This gives companies the leeway to process orders remotely at any time they want. This provides space for better control of data, customer service, and efficient processing of orders. 


The automation process of the order-to-cash system instantly creates a unified approach from a single platform, giving space for companies to collect and stack data to take advantage of business intelligence for future development and negation of issues.

Easy inventory management

Inventory management is one of the exceptional abilities of an order management system. OMS classifies data based on products sold, exchanged ad returned. This prevents companies from over-selling stock and improves customer satisfaction. 

Centralized view

The upside of a centralized order management system gives organizations a chance to simplify complex e-commerce fulfillment environments and prevents errors related to orders, customer dissatisfaction, or common bugs like low inventory, improper invoicing, or transportation errors related to shipping. 

Real-time data

With the real-time data display of an order management system, companies are put in a position to resolve issues faster, thus improving customer satisfaction by avoiding errors or delays in deliveries. It also makes sure that the data related to the payment and product are up to date, giving organizations a deeper insight into the level of their business.

How does order management function?

Order management processes can be simplified into three stages: receiving the order, fulfilling the order, and then managing the post-sales process. Let's break down each step in brief:

Receiving order

The first and foremost stage of an order management process starts when a customer is placed with your online store. Receiving an order includes accepting the order from the customer and receiving the payment for the product(s). Post this process, the information related to the purchase is forwarded to your warehouse for your respective staff to work on getting the products ready for shipment.

Executing the customer's order

  • Picking- Fulfilling an individual order begins with the process of bringing your products from the storehouse. Storehouses are filled with shelves that are stocked with different categories of items. This classification makes it easy for storehouse workers to pick out the right products for the order in the quickest & accurate way possible. Once the products have been picked out, they are sent to a packing station where they are packed.
  • Packing- The packing station isn't just responsible for packing the products and shipping them off. They are also responsible for filling the items with the suitable packaging materials so that it reaches the customer in the best possible manner. 
  • Shipping- Shipping is another crucial stage, where you attach the appropriate shipping label & invoice along with the order. Other responsibilities of the shipping department include checking the order as shipped in all of your sales mediums, Sending out confirmation orders, and tracking emails related to the customer's order. Picking, packing, and shipping processes can only flow in that order if your business has an adequate amount of products in-store. So what option do you have when a customer places an order for a particular product but you don't have it in stock at the moment? In these typical cases, businesses have two options to go with: you can either divert the customer or propose the order delivery to a later date using backorder or drop shipping methods. With backorder, you place a purchase order with the supplier you are linked with for the product that is not available in your store, and the supplier will give a proposed business date for the arrival of new stock. In turn, you can provide your customer with an approximate date for their order to reach them. Now, in the case of dropshipping, you can forward the order of the customer to the supplier, and they can deliver it right to the customer without sending it to you first. This can save some time and money wasted in shipping. 

Managing post-sales

The final stage of order management is managing the post-sales process. This is mainly done for your company to take feedback and make changes to get better. All you have to do is see if the customer is happy with your service and product and take care of returns and refunds if there are any. These three stages are what make an exemplary order management system. Certain businesses would prefer to personalize their order management system to their needs, and that's perfectly fine too. 

Analyze future improvements

Your order management system should have an integrated way of analyzing the whole eCommerce logistics process. By tracking specific Key performance indicators (KPI) like lead times, product return rates, and feedback, you can boost the process to improve customer satisfaction and cut down on costs simultaneously. 

Challenges faced by an order management system

When there are multiple stakeholders present in the order management process,the hindrance it faces on its line of success is more. Some of the prime challenges faced by order management system include 

Human error

Manual updates can lead to duplication of data with human errors. With multiple orders coming from multiple mediums, it is quite tough to keep track of things in order. 

Erratic Syncs

There are certain order management software that sync at a very steady rate and are corrupted with errors which can lead to incorrect shipping and inventory data.

Inventory management

Order fulfillment is about meeting the needs and expectations of customers and if you always remain low on stock, it is not possible to keep up with expectations. To know the status of your stock levels you need to have decent inventory visibility. On the flipside, overstocking can also lead to dead stock. Therefore, systematic planning and maintenance of inventory are key. 

Managing System Integrations

In a manually operated Order management system, the functions are not potent enough to handle orders from multiple channels. So, you are more likely to find several issues in managing the orders.

These factors can seriously negate customer satisfaction and ultimately negatively impact loyalty.

5 of the best software to help with order management in 2021

While there is ‘N’ number of OMS platforms and software out there in the market, here are five of the most trusted and reputed software that excels in order management!


Provide your customers with a smooth and hassle-free experience by managing orders efficiently. Configure, capture and process all order transactions with the intuitiveness of an efficient order management system with B2B specific terms. Streamline the buying process, manage quotations, deliver the timely support of sales reps to customers, and more with Growmax.


The basic plan starts at $29, while the highest ideal (accelerate) is cited at   $289. Growmax has a custom plan upon request too. 




Skubana is an eCommerce platform that specializes in helping eCommerce companies complete orders from multiple storehouse locations and mediums. Skubana brings all things you sell together into one single entity. Their software also offers comprehensive analytics and strategic tools to automate all things, including orders. Skubana only takes a few weeks to sort out the process as compared to other competitors. 


The basic plan starts at $999/month. But, they do offer a custom plan too. 



3.Quickbooks commerce (Tradegecko)

TradeGecko is an order management and inventory management software for businesses that make use of various sales mediums & fulfillment service providers. TradeGecko has a broad suite of functionalities packaged together in a cloud-based interface. It manages product bundles, manages multiple price lists, automates purchase ordering, helps with merchandise classification, and automates backorders in the most efficient way possible. It, however, doesn't have a built-in POS. 


The basic plan is priced at $39, while the business plan is priced at $599. 




Brightpearl is a big-time retail management system that is primarily meant for merchants making over $1 million in total annual revenue. They possess and serve everything from inventory management & order management, processes related to shipping, a POS solution, and even customer relationship management under one umbrella.

However, Brightpearl isn't suitable for smaller and more agile businesses. They would probably be better suited better by a less complex and affordable solution.


Users will have to contact Brightpearl to get a custom price plan. 



5.Oracle NetSuite

NetSuite's Suite eCommerce software offers a wide range of features, and it possesses an order management system that can handle orders from various mediums. NetSuite eCommerce aims to be an all-in-all eCommerce platform that doesn't require the need for integration with other platforms and mediums.

On the downside, it’s mostly suited for more prominent companies and would require some learning time to work with, making it a hard choice for early companies. 


NetSuite’s Pricing plan starts at $499/month. 




Working with the perfect order management system can help avoid unnecessary back-ordered products and unsatisfied purchasers. Order management software makes the process of order fulfillment easy and smooth by integrating all of your vital data and allows you to make better business choices and improve order accuracy while cutting down on overall costs simultaneously. While there are many order management systems out in the market, you'll have to assess yourself and pick out the aptest system for your company depending on your size, needs, and motives of your business. Good luck!