The buyer’s journey begins once a customer places an order on your business.
Managing small orders from a few customers can be easy at first. You can simply pack your orders and ship them as needed. However, this becomes increasingly complicated while your business expands as well.
Proper order management helps alleviate the complexities of handling multiple orders and ensuring they are delivered from your warehouse to your buyer’s doorstep.
Delegating this to a reliable service provider further eases the burden of maintaining every aspect of your operations in-house.
This article teaches the basics of order management and its importance in your business.
What is order management?
Order management refers to the entire cycle of processing customer orders, from placing to after-sales support. It ensures that every order is processed correctly and delivered to maintain customer satisfaction.
Primarily found in retail processes, order management can combine both manual and automated processes to handle orders from the seller to the buyer.
Some companies even use order management systems to streamline this operation and make everything smoother on their part.
Order management is also present in companies offering pure services.
The importance of accurate order management
According to the latest surveys, your customers are more likely to leave after experiencing one or two bad experiences. This is why order delays, mismatches, or any similar issue should be avoided.
Having an accurate order management system provides you with the following benefits:
Efficient order processing
Having accurate order management makes your order processing more efficient. This is because every function is streamlined properly, saving you time and effort.
With order management, you can take a look at the processes better.
Improved inventory management
Avoid inaccuracies, overstocking, or understocking in your inventory through order management.
You can check the trends on demand for each product you sell and find out the amount of stock you need for each item. Better inventory management also helps you provide what your customers want, manage your budget, and predict profitability.
Reduced order errors
Mistakes and errors in orders can be more difficult to avoid the more orders you process.
With accurate order management, you reduce errors in processing large-scale orders for your customers worldwide. You won’t have to worry about wrong orders, mistyped addresses, and other recurrent issues you might face with synchronization and automation in your processes.
Integrated information for decision-making
Order management systems let you store all sales order information in a single place. You won’t have to bother pulling data from multiple tools and departments simultaneously. This will help you analyze them better for more accurate decision-making.
Increased customer loyalty
Accurate order management strengthens customer loyalty long-term. Once your customers have a great experience in ordering and receiving your products on time, they tend to make repeat purchases when needed.
This, in turn, creates loyal customers that subscribe to your services.
Better cash flow and profitability
All in all, order management does wonders for your cash flow and profitability. You save money on errors in your orders, including refunds and penalties on shipping.
This also increases your profitability in the long run, attracting customers to increase their lifetime value to your business further.
Order management cycle: How an order is processed
An order management process is usually divided into three steps: order taking, order fulfillment, and after-sales process.
Below are the details as to how each step works:
Order taking
Order taking or order capturing is where a customer places an order with the company. Here, the seller receives the order along with the customer’s details and payment.
Businesses can gather customer orders through phone calls, emails, or e-commerce stores where their products are listed. Once gathered, they will process these orders to their warehouse for fulfillment.
Order fulfillment
The next stage, order fulfillment, is divided into several steps.
- Picking. Here, the item is picked from the warehouse for packing and shipping. Each item’s placement impacts delivery time; workers must get each item as quickly as possible.
- Packing. The packing team has more responsibilities than simply wrapping and labeling items for shipping. They have to make sure that each product is packed in good condition and will be received the same way.
- Shipping. The warehouse personnel is tasked to include labels for each item, mark them as “shipped” in the system, and send out tracking confirmation to customers.
Order fulfillment is usually done in this order, whether for small-scale or large-scale shipments.
In case an ordered item is unavailable for purchase, sellers can either turn away the order or deliver at a later date using dropshipping or backordering.
After-sales process
Order management does not simply end when customers receive their orders. Companies must follow up with any feedback on the delivery process and the item itself.
Staying in touch with the customer after the delivery helps companies understand what makes them stay in the first place. It also provides convenience for buyers in terms of processing refunds and replacements when unsatisfied with the item.
Outsourcing order management
There is no doubt that businesses like yours can benefit from proper order management. Streamlining your order processes can give you an edge over your competitors for the services you provide.
Aside from automating your order management process, outsourcing your order management is another way to make your operations more efficient. It is a great way to streamline your business operations and reduce costs.
Leveraging the expertise of a third-party provider such as OP360 can ensure that your orders are managed efficiently. It frees up more of your internal teams’ time, allowing them to focus on other areas of your business.
