What is an Order Management System (OMS)?

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Before ecommerce and the subscription market became as popular as they are today, shopping almost always meant purchasing from an actual store. With this model, most businesses found that they could get by with just a spreadsheet to track their orders. But now, to stand out in a crowded market, businesses are constantly experimenting with tactics like selling through different sales channels, shipping outside their area, and opening additional stores. These tactics are helping businesses stay competitive, but they’re also undeniably making it more difficult to manage orders in-house.


Today’s market pushes business owners to be work-ready at all times and in all places. To help with this, some like to use an order management system, which is a tool that records and accumulates all the sales and purchase order details of a business into a single platform. It also helps manage the fulfilment processes for these orders, allowing business owners to save time and keep better track of their orders, bills, and invoices.

Read on to learn more about how an order management system can benefit your business and what features you should look for.

Benefits of using an order management system

It’s difficult to manage orders without having a proper system in place, because it requires you to manually update your inventory levels every time you get an order. This becomes especially difficult for businesses that deal with multiple products, warehouses, and branches. Apart from being tedious and time-consuming, manual updating means that you won’t be able to see your stock change in real time. This increases your chances of error—say you are out of stock for a certain item and a customer places an order for it before you update the stock level. You would end up having to deny your customer’s order for that product, or make them wait until you restock your warehouse with it. Either way, you won’t make a good impression on your customer.

With an order management system, on the other hand, you can send automated real-time updates across all your channels and warehouses, to minimize your chances of error and save you valuable time.

What an order management system can offer you

When thinking of getting an order management system for the first time, there are some essentials that you should be on the lookout for. And if your business already uses an order management system and you’re looking to change, it’s important that you find a system that handles all of your old system’s responsibilities besides taking care of new ones. Whether you’re getting an order management system for the first time or not, you shouldn’t have to downgrade your existing process to get an upgrade. Here are a few features that you should learn about before choosing an order management system:

Centralized order management

Some smaller businesses may offer their customers only one sales channel, while others may offer more. Whichever approach you take, a good order management system should be able to manage orders from multiple sales channels within a single interface. This will come in handy in the future if you decide to expand your sales strategy.

For instance, assume a business decides to use a shopping cart platform as one of their sales channels. Here, the order management system needs to extract relevant data, such as order details and customer information, from the shopping cart platform. Now suppose the business is considering selling on a general marketplace like Amazon. Since they will be receiving orders from both channels, it will make things difficult if their order management system only manages orders from their shopping cart platform. Using an order management system that can communicate with both channels will help optimize their experience by synchronizing orders for quick processing, retrieving order status updates for easy tracking, extracting customer details to send timely notifications, and sending automated product count and inventory update notifications.

Inventory management

As a business starts to grow, it becomes more difficult to keep track of the stock levels for every single product. Not only should an order management system keep track of your inventory, it should also be able to save you from conflicting or unfulfillable orders. This includes placing backorders for products that are out of stock (or preventing orders from being placed if they can’t be fulfilled), reserving goods that have been added to a cart but not purchased yet, and automatically updating stock levels after each purchase.


A fulfillment center, like Amazon FBA’s fulfillment centers, are third-party logistics (3PL) warehouses that take care of the basic order management processes for every incoming order including receiving orders, processing, and fulfillment. If your business has several fulfillment centers, it’s a good idea for your order management system to come with a fulfillment integration so that you know which center to use for each order, based on location and stock on hand.

Even for businesses that manage order fulfillment through dropshipping or third-party services, a fulfillment integration will allow you to keep track of an order’s status, including when it was shipped and when it was delivered.


Once an order has been shipped, it may seem like the seller’s job is done, but this isn’t the case until the order actually reaches the customer. To avoid lost or undelivered orders, it’s always best if both the seller and the customer can track the status of a delivery themselves. Your order management system should allow you to integrate as many shipping services as you need, so that you can pick one that is convenient for you and your customers. And to accommodate “cash on delivery” sales, your integrations should help you track and process any payments collected by the shipping services themselves.

Notify customers

Since your business depends on your customers, it makes sense to make their experience buying from you as comfortable as possible. You want your customers to feel like they can trust your business, so that they come back again. To help with this, your order management system should be able to send emails to your customers, and give them consistent status updates so they know when their order is received, processed, and shipped. It’s also useful if the system can send out personalized emails on its own to your customers every now and then to show your gratitude.


Every business functions in its own way, following steps in a certain order and completing tasks at specific times. Your order management system should be flexible enough to adapt and comply with your processes, so that it really supports your business.

For instance, say a business has separate warehouses for the different types of products that they sell. Every time they get an order, someone has to check it and then send it to the warehouse that has the ordered items. Things get especially complicated when they get orders combining items from different warehouses—they have to coordinate between warehouses and make sure the customer gets all the items that were ordered. If done manually, this would be heavily time-consuming and prone to error. But with the right order management system, the system can automatically separate orders depending on the items mentioned, send them to the appropriate warehouses, and check whether all the items have been retrieved.


With all the competition out there today, it’s important that you keep an eagle eye on your business’ order management processes, since there are so many steps and tasks involved. While doing this manually is easy when your business is just starting out, it becomes extra challenging as you grow. With an order management system, you can make sure every process runs like clockwork no matter how complex your business becomes. Whether you’re new to order management software or want to update your existing system, the pointers above will help you find the best system for your business.


A word from Zoho Inventory

Order management is an integral part of your warehouse processes as it forms the crux of how your customers receive their order. But as your business starts to receive more orders, handling all these processes manually could become a little overwhelming. This is when most businesses switch to using an order management system, like Zoho Inventory which manages all your fulfillment processes, simplifies your shipping and tracking, and even lets you set up shop across multiple channels. With Zoho Inventory, you’ll be able to set aside more time to grow your orders, rather than just managing them. Try our free trial and find out how it can help streamline your order management processes.

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