The customer hits the “Purchase” button, and the order process begins.
When new orders are placed for your ecommerce business, whoever is storing your inventory then must grab the right products ordered, pack them in the right packages, and ship to the right place.
When you are a brand-new business, that seems simple and easy. Get a few orders in a day and quickly fulfill them with very little to no problems.
Its when your business starts to grow that you might run into some obstacles. As sales grow, products are added to your inventory, channels multiply, and your number of customers grow the more difficult your fulfillment process will become. An order management system can help remove barriers you might run into as your ecommerce store grows.
What is Order Management?
Order management refers to the process of receiving, fulfilling, and tracking customer orders. The order management process starts with a new order and ends when the products make it to the customer.
When escalating your business, you should make sure to automate and streamline this process. If you don’t, you’ll eventually be incredibly overwhelmed by the number of orders coming in.
What is an Order Management System?
An order management system gives you a platform to view and manage all customer orders in one spot. Some systems have the ability to sync your order management system and your ecommerce platform to pass information between the two, giving you visibility into the entire order process.
This will help you stay organized, and it will automate the flow of sales order information to every piece of the retail supply chain. This gives you the ability to track the entire process of a customer order, from the “Purchase” button to delivery, including returns.
In other words, an order management system automates and organizes everything that needs to happen in order to get customers the products they ordered in good condition and on time.
What is Order Processing?
Order processing is the workflow from order placement to order delivery. This is a key part of order fulfillment, where accuracy and reliability are followed by customer satisfaction. Order processing has 4 steps: picking, sorting, tracking, and shipping. This can either be done through manual processes, like handwritten on an order log sheet, or technological and data-driven processes, through online orders and automated order processing software, all depending on the company and the operation of that company.
Why Your Business Needs Accurate Order Management
Making sure you implement order management systems and processes can seem like a hassle when you’re bootstrapping business processes with not a large team. But as your business grows, you may start to fall behind if you are trying to fulfill every single order on your own. Here are a couple problems that can be solved by accurate order management.
1. Overstocking and Under-Stocking
Having a high inventory turnover ratio can be good but you need to make sure to not over or under-stock.
Overstock and you’ll have products collecting dust before the sell, if they ever do, one day. You’ll be sinking cash you can’t afford into these products that may or may not sell.
Under-stock and you risk unhappy customers who are waiting. Or you’ll risk splitting shipment or losing easy sales from customers who were planning of buying your product now but will probably end up purchasing from your competitor instead of you.
2. Fewer Mistakes on Fulfilling Orders
When you only have a few orders, it’s not too hard to avoid making mistakes while fulfilling those orders. The process is simple. Pick the product, package it well, print the shipping label, and ship it off.
Now let’s say your business starts to skyrocket. You have orders coming in all day from all over the place. You definitely have your hands full with fulfilling orders. Then you add is all of the phone calls about different orders being wrong. Now in order to fix those orders, you have to neglect the orders you are sending out now. There are bound to be mistakes made, wrong products or addresses can lead to angry customers and delayed shipments.
Therefore, it’s very important to have an order management system in place so you can have it more automated making there be less human error. Sure, there will still be mistakes made but you will be able to help your business grow without becoming too overwhelmed with your order volume.
The Order Management Cycle
The order management cycle is basically your fulfillment process. Starting when a customer purchases your product right through to delivery.
This process has several parts that work together to make the cycle go down smoothly and with as little mistakes as possible.
1. Order Placed
Once the customer, wherever they may be, clicks “purchase”, you need to make sure that your system can send the order information over to your order management or fulfillment tool. From there your program will be able to receive the order details.
2. Order Received
Once the order is placed and sent to the fulfillment center, they can then process the order.
Launch Fulfillment has multiple warehouses with many more in the works. This is the point where the system will choose which warehouse to send the order to. For instance, we have a warehouse near Salt Lake City and a warehouse near Nashville. If an order is made in South Carolina, the order will be sent to the warehouse in Nashville. If the order was made in Seattle, the order would be sent to the warehouse in Salt Lake. This makes is easier, faster, and cheaper to ship the orders.
3. Order Picked
Once the order is received the order details will be sent to the pick team. They will receive a picking list that will tell them where the items are and how many they need to pick. They will find their location and pick them from said location.
Warehouse Management is very important, especially for this stage. The picking process will go much faster if the warehouse is nice, clean, and organized.
4. Order is Packed
After the order is picked, the items are sent to a packing station to be packed into a box or package that fits it best to ensure the lowest dimensional weight while also protecting the products inside.
There are 3PLs that allow you to have your own custom packaging. This can help your customers have a better unboxing experience.
5. Order Ships
Once the order is picked, packed and protected, its ready to be shipped to the customer. Some 3PLs only work with one shipping carrier, while others make sure to rate shop to make sure the customer gets the best shipping prices. Once the carrier is chosen, they will pick the orders up right from the 3PL’s warehouse.
The order is then assigned a tacking number that you will receive, and it will also be sent to the customer to follow the package through every step.
6. Item Delivered
Through this whole process, the package is finally delivered and with the customer who purchased it. Is it right though?
If your order management was correct and double checked throughout the whole process, chances of the order being wrong is very low.
7. How’d We Do?
Making sure to follow up with your customers can help you understand what you are doing well and what you are not. You want to know why customers keep coming back and if you are communicating with them, it gives you the opportunity to increase the lifetime value of each customer.
Measure What Could Have Been Improved
Having a refund and return process is important so you keep a good relationship with your customers. It also is a really good way to know and understand what you did that was either bad or not satisfactory for your customers. The way to grow is to learn. If you don’t listen to your customers on both the good and the bad there is no way to grow.
Order Management Software
Not every order management software is the same. There will be some that have everything you want and need but some do not. Make sure to do your research on software like ShipStation, Skubana, and NetSuite.
Here at Launch Fulfillment, we will take care of all things Order management. Order management is a lot to learn and a lot to remember. Let us do all that work so you can focus on your businesses and growing while we talk care of your orders and fulfilling them for you straight from our warehouses.