Home > Blog > What is Order Management and Processing? A Step-by-Step Guide

Running an e-commerce business is not just about selling products and services online but also ensuring seamless and efficient order management and processing. Imagine the disappointment of seeing your potential sale slip away just because of an order delay. That’s precisely what happens when 38% of online shoppers abandon their carts due to longer delivery periods.

Tracking the status of orders received via marketplaces and (D2C) websites is crucial for any business. The inability to easily track order status can lead to confusion, delays, and unhappy customers. Don’t let this happen to your e-commerce business.

In this guide, we’ll dive deep into the world of order management and processing and provide you with a step-by-step guide that covers everything from tracking orders to handling returns. So let’s get started!

E-commerce Order Management: A Brief Overview

Order management refers to the process of tracking, managing, and fulfilling customer orders, from the time they are placed until they are delivered. This includes tracking inventory, processing payments, shipping, tracking orders, handling returns and refunds, and providing customer service.

A robust e-commerce order management system (OMS) is essential for any e-commerce business. It ensures that orders are processed efficiently, inventory levels are accurately maintained, and customers are kept informed about every step of their order journey. By streamlining order processing, e-commerce businesses can improve customer satisfaction, reduce costs and improve overall efficiency, leading to a better bottom line.

Order Management Process Flow: Key Steps

order management process flow - key steps

  • Step 1: Order Received on Marketplace or D2C Website
  • Step 2: Order Details Received via APIs Sent to WMS
  • Step 3: Creating the Picklist
  • Step 4: Order Picking and Packing
  • Step 5: Shipping the Order
  • Step 6: The Post-Sales Follow-Up Process

The order management process starts with receiving an order and ends with ensuring the customer is happy with their purchase. Here are the key steps in this process:

Step 1: Order Received on Marketplace or D2C Website

The “Order Received” step marks the start of the order management process when a customer places an order on a marketplace or D2C website. At this point, it’s important to verify that all the necessary information is captured correctly, like customer details, item details, quantity, etc., and that the payment mode should be confirmed. This helps ensure that the order can be efficiently and effectively processed at the warehouse.

Read: How Honasa Consumer, the parent company of Mamaearth, attained a 99.99%+ Order Fulfillment rate for its D2C operations?

Step 2: Order Details Received via APIs Sent to WMS

Using APIs in order management helps businesses automate processes, improve accuracy, and streamline operations. For example, when an order is placed on a D2C website, the order details, such as customer information, item details, and shipping details, are sent via API to the warehouse.

This allows for real-time updates on inventory and order status and enables warehouse staff to quickly and efficiently pick, pack and ship the order.

Step 3: Creating the Picklist

Now that the order details are received, they can be passed on to warehouse staff through an automated process known as a picklist. This step typically takes place in the warehouse after an order has been received and the inventory has been updated in the warehouse management system (WMS).

The picklist is a document that includes all the information required to pick, pack and ship the order, such as product codes, quantities, and the precise location of the products in the warehouse, such as shelf details and batch numbers. Once this picklist is created, warehouse staff can use it to go to the relevant locations and physically pick the items required to fulfill the order.

Step 4: Order Picking and Packing

It’s time for warehouse staff to physically locate the items on the picklist and retrieve them from their storage location. Using a handheld scanner or a mobile device to scan each item’s barcode to ensure that the right products are picked and to update the WMS system.

Once the items have been picked, they are moved to the packing area, where they are inspected, packaged, and labeled for shipping. This process involves wrapping and packing the items securely in a box or a shipping envelope, adding any necessary padding or packaging materials, and attaching any required shipping labels or documentation.

Step 5: Shipping the Order

primary stages to the order shipment processThe order is picked and packed; it’s time to ship the order. There are typically three primary stages to the order shipment process:

  • Stage 1: Order to Be Picked By Delivery Agent
  • Stage 2: Order Picked and On the Way
  • Stage 3: Order Delivered

Order to Be Picked By Delivery Agent: In this stage, the order is prepared for shipment, and the delivery agent is notified to pick up the package from the warehouse or fulfillment center.

Order Picked and On the Way: Now, the order has been picked up by the delivery agent and is on its way to the customer. The delivery agent tracks and monitors the order, and updates are sent to the OMS and the customer.

Order Delivered: The last phase of order fulfillment is the actual delivery of the package to the customer and updating the OMS with delivery details.

Read: How XYXX, One of the Leading Men’s Innerwear D2C brand Streamlined its Inventory and Order Management across 17+ marketplaces?

Step 6: The Post-Sales Follow-Up Process

post-sales follow-up process in order management

The post-sales process is the final step in order management and is crucial in building and maintaining customer loyalty. This typically includes thanking the customer for their order and ensuring they are satisfied with the product.

In case of a return, several steps are taken to ensure the return process goes smoothly:

  • Step 1: Return Initiated
  • Step 2: Return Picked
  • Step3: Return Received
  • Step4: Return Processed

Return Initiated: The customer initiates the return process by contacting the customer service team, either through the marketplace or D2C website or by phone, to request a return. The customer has to provide the order number and a reason for the return.

Return Picked: Once the customer service team authorizes the return, a return pick-up is scheduled, and a delivery agent is dispatched to collect the returned item from the customer.

Return Received: When the order is picked up, it is received and inspected by the warehouse to ensure that it is in the same condition as when it was shipped. The return information is also updated in the warehouse management system (WMS).

Return Processed: After the item is received and checked, it is processed, and a refund, replacement, or credit note is issued to the customer based on the return policy and the condition of the item.
By having a well-defined and efficient post-sales follow-up process in place for returns, e-commerce businesses can ensure that customers can easily initiate and process returns.

Watch how Order Management System (OMS) helps in timely order fulfillment –

Wrapping Up!

Optimizing order management process flow is important for every e-commerce business. Only a fully integrated OMS can automate processes and provide real-time updates on inventory and order status.

When choosing your order management system, it’s essential to check if it provides ready integrations with your shipping providers and marketplaces, as this will help you focus on growing your business rather than worrying about order processing and fulfillment.

Choose wisely and use technology to keep your e-commerce business moving forward!

Explore our platforms:

  1. Integrated logistics management system
  2. Automated payment reconciliation system

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