Order Management | Maximize profitability through Efficient Fulfilment Process

Order management is a vital part of your eCommerce business. If it is handled efficiently, you can win the race by maximizing profitability. Whereas, its mismanagement could be costing losses in several ways. 

Think about the cases where an error in any stage of fulfillment occurs and results in disasters. E.g. any payment error, a missed order, some improperly filled order, or shipment issues. These issues are going to leave a negative impact for good on a customer.

As per research, 65% of customers do not trust a brand again over just a single negative experience.

Therefore, to prevent falling victim to this, you need to have an efficient eCommerce order management system. Once it’s all set in place you can keep getting customers back frequently.

To save you from bad online customer experiences, in this post, you’re reading all aspects of a perfect order management system.

What is order management?

Order management refers to keeping track of incoming orders and management of their fulfillment processes in a retail business. In short, order management is all about order entry and processing. 

This process is not limited to only successfully delivering an order. Rather, it covers each phase from the point of receiving an order, to going through the delivery process,  till the post-sale actions. The post-sale actions include returns management, customer reviews, and customer support as well.

The following image demonstrates a flow of order processing in nested details.

As you can see above, basically there are three stages of a typical order management process.

1: Receiving an order

• Process payment
• Prioritize orders
• Handle multichannel orders

2: Order fulfillment

• Order picking process
• The packaging process
• Shipment process

3: Managing post-sales actions

• Follow up with customers
• Refunds & returns management
• Reviews & feedback management

So, let’s dig each point in detail to explore the improvement areas of your order management.

1- Receiving an order

The first step is an achievement in itself for a retailer. Achievement in a way that - somebody comes to your store and chooses to shop from you.

Well, for small startups, tracking incoming orders may seem comparatively simpler. But for large enterprises, it’s trickier to track orders that come from various sales channels.

Therefore, you need to consider the following things in the case of bulk orders.

• Process payment

Process payment is a crucial level when receiving payment online. Failing to receive payment carefully wastes your sale and loses you a potential customer.

Note, hard-to-operate payment systems with unnecessary features are one of the major reasons for payment failure. Therefore, it is important to choose a payment processor that is completely reliable and easy-to-use.

• Prioritize orders

There are some cases when a customer requires urgent delivery.

For example:

If a customer chooses quick delivery then it should give a signal to the warehouse team to set its priority on high.

• Pro-tip:

You can go out of the box and create “wow” experiences for some customers.

What you can do is:

• Add bonus gifts with orders above a certain amount.
• Give a discount cor for their next purchase.
• Add referral discounts on some products.
• A gentle thank you note that makes you stand out from the crowd.

• Handle multichannel orders

You can increase your sales by listing your products on multiple sales channels.

To handle multichannel sales and orders, it is good to opt for a solution that helps you manage all channels through one platform. There are many software available on the internet for this purpose. One of them is Stock Konnect. Its efficient order management system saves you from overselling complaints.

Thus, solutions like these software tools help you increase revenue ultimately. So buying such a tool is worthy of investment - as it saves you from frequently losing sales due to poor order management.

2- Order Fulfillment

Speed and accuracy of order fulfillment are extremely vital in your eCommerce order management process. Following are a few extractions from surveys and research.

• 64% of consumers would prefer delivery within the same day or the next.
• 57% are unwilling to shop from a retailer serving late delivery.

Resultantly, the sooner the customers receive their orders, the more satisfied they will be.

So the following factors play their respective parts in making delivery quick and sound.

• Order picking process

You must be well-aware of the experience of getting hundreds of orders each day if you’re an enterprise retailer. Thus, it is important to incorporate the correct picking method for your eCommerce business.

You must keep the size of your business into consideration while choosing the right picking method in order to enhance your order management.

Below is a list of four methods from which you can choose one for your business.

1: Single order

One order at a time is picked and brought to the packing station.

2: Batch picking

A certain number of orders are picked at a time before bringing them to the packing station.

3: Zone picking

Each zone in the warehouse is allotted to an order picker. Where each zone has the order items.  Not all zones are processed at the same time.

4: Wave picking

Each zone in the warehouse is allotted to an order picker. Where each zone has the order items. Orders from all zones are processed at the same time and brought to a centralized packing station.

• The packaging process

In an efficient order management process, packing is not merely about putting the items into a box simply. It’s way more than that.

This process refers to sending the right order to the right customer quickly and efficiently.

Consider the following factors in this regard.

• Verify order accuracy.
  • Verify that each order is being sent with the right items.
  • Ensure that items being sent are not damaged.
  • Tip: Use a barcode scanner to automate this verification process.
• Box weight
  • Shipping companies are now incorporating different prices depending upon the box weight.
  • So, remove the confusion by adding 3-5 standard box sizes to help customers choose the one that fits best for them.
• Ensure packaging quality
  • It is important to check if the packaging material is solid enough to protect the order items.
  • In some cases, you have to compromise high cost over good quality material.

• Shipment process

Once you’re successfully done with order packing, now is the time to:

1. Print shipping labels and invoices.
2. Mark the order status as shipped.
3. Notify customers about the shipping confirmation.
4. Send them order-tracking emails. (automatic in smart order management systems)

3- Post-sales actions

As we learned earlier in this post that a complete eCommerce order management process doesn’t stop at order shipment.

There are a few post-sale actions that you need to follow consistently. Therefore, doing this right can make you a high-performing retailer with huge brand potential.

• Following up with customers

You can build and maintain customers’ trust by frequently following up with them. It’s a good practice to keep customers informed with necessary info as much as possible. This practice allows you to reduce the risk of getting customers’ complaints.

The ordinary practice that is very common is sending emails regarding order dispatch and tracking. So to make your eCommerce business stand out, you can go the extra mile by sending order delivery updates via SMS messages as well. You can accomplish this task by collaborating with a courier provider.

Besides that, you can automate sending simple follow-up emails. Emails could be interrogative, in terms of, if there were any problems in order or its delivery process.

This gesture would make the buyer feel that the brand is genuine and professional.

• Managing returns and refunds

Design a refund and return policy, especially if you have a good number of customers. Doing so can make you reduce inbound customer queries as well. 

Keep the following point in consideration when managing returns:

• Easy to locate.
  • Make sure that customers can easily locate the policy without nested navigating.
• Easy to understand.
  • Make sure the policy is clear and comprehensive enough to be understandable.
• Try return prevention.
  • Try assisting the customer first by attempting to fix the issues.
• Knowledgeable staff.
  • Make sure support staff is well-knowledgeable of the true details of the policy - so that they can provide clear support to the customer.
• Refund on time.
  • Provide clear time frames for each action.

• Using reviews and feedback

Reviews and feedback are very powerful for any business. According to research, 85% of shoppers trust online reviews exactly as a personal recommendation.

So ask the customers for their honest reviews via a follow-up email. Make sure that the email is comprehensive enough to ask for negative experiences as well if any. 

Don’t place these reviews merely in the inbox. Utilize them to identify your areas of improvement. Hence, the customers' feedback and reviews will let you improve your business performance and profitability.

Key Metrics of Order Management Process

Identify the weak nodes of your eCommerce business by carefully analyzing the KPIs of your order management process.

Following are the KPIs to consider for your eCommerce business.

Order Lead Time

Order Lead Time calculates the time between a customer placing an order and its delivery time.

Improved lead time is very vital for customer satisfaction. Therefore, it’s important to not compromise quick and quality service.

Order lead time is calculated as the average time of all fulfilled orders.

Rate of Return

The rate of return demonstrates the return pattern for an item. This is how you can ultimately extract the reasons for item returns as well.

Picking Accuracy

A poor picking accuracy denotes that you’re having disappointed customers. These customers can give negative reviews that will pay you a bad brand reputation. It’s therefore vital to keep track of the concerns.

With the following formula, you can calculate the picking accuracy for your order management process.

Purchase Frequency

Purchase frequency is the ratio of total orders to unique customers.

It is always a good practice to track the process of order management and maintain the quality of any follow-up. Thus, you can nurture customer experience as a whole.

Final words

Now you have understood the order management process in detail with its KPIs as well.

Make sure that consistency is the key. Be consistent with your follow-up campaigns to increase customer satisfaction – and make them shop over and over again.

Let’s help each other by stating the business growth that you noticed after using any or all of these processes in your business. Go and comment below - let’s work together!