It's vital that you understand the order management process and how to optimize it for your customers.
In fact, 65 percent of customers* are likely to never make another purchase after one bad experience.
That's enough incentive to continue improving your process and retain satisfied customers.
There are three steps to the order management process and understanding them is critical to building the right solution for your organization. They are placement, fulfillment and inventory management, and each has its own quirks and challenges.
Typically, orders are placed using an ecommerce website customers can access anywhere.
Of course, there are marketplaces*, such as Etsy and eBay, and retail stores as well. However the order is placed, it's important to have tracking and payments take place in the same system for audit and verification reasons.
The customer places the order and pays. During this process, clients receive help from customer service with any questions or concerns.
Once the order form is filled out correctly, it can be processed by the system. Many merchants offer phone ordering, if customers are unwilling to place orders via the internet.
Make sure that your payment processing software is highly reliable so that your customer data isn't compromised.
This is essential, since one bad experience sends customers running to your competitor or to review sites to bash your organization.
It's important to track multiple sales and update fulfilled orders quickly and efficiently to avoid errors.
Keeping the payment and tracking in one system lets you realize when a payment hasn't gone through, so you don't fulfill an unpaid order.
Tips for Special Orders
Customers who order multiple items or large ticket items and those who frequently place orders deserve special treatment.
How do you highlight this to the warehouse team to make sure these customers get top priority?
Use special codes or bonuses in your order placement process to create a great customer experience.
For example, if someone hits a spending milestone, include a bonus gift in the package or offer them a discount coupon for future orders. This is another reason it's essential to have your payment and order placement in the same system.
Order history, volume and method of payment are all major components in targeted campaigns for new and existing products and services.
Ideally, this step is completely automated and happens quickly.
When an order is placed, inventory is reduced in the system where the order is taken.
This is the system of record that pushes data to related systems.
For example, if you have 500 shirts in inventory and sell 6 on Etsy and 10 on eBay, you need a common tracking system.
Your system of record reduces inventory and sends the notification to all ordering channels to indicate the new availability, 484 remaining shirts in our example.
A robust system for tracking your products * includes:
- Product Name
- SKU Number
- UPC Number
- Size and dimensions
Failing to properly identify individual items leads to costly mistakes, including delayed and lost orders that drive customers away.
Always assign SKU numbers, product specifications and barcodes so that every item in your inventory can be identified, whether it's in-house, en route to the customer or picked up by big box retailers with similar products.
For example, let's say you sell purple socks. When you give your purple socks a SKU (Stock Keeping Unit), you're creating a unique identifier that makes them easy to find.
For resellers that sell more than one brand of purple socks from many vendors, this may be the only way to tell products apart.
After order placement and inventory adjustments take place, the order goes to the warehouse or to the facility that sends the order to the customer.
Here's a high-level view of how this typically works:
- A warehouse employee gets the order and performs a process known as pick, pack and ship.
- Pick. Retrieve the item from the appropriate location in the warehouse.
- Pack. Place the product(s) in a shipping box with any necessary packing materials.
- Ship. Affix the shipping label and put the package in the appropriate area for shipping carriers to pick up.
- The carrier delivers the package to the customer.
During the picking process, there are four methods depending on the type of order.
- Single order. Each order is picked and delivered to the packing station.
- Batch picking. A picker gets the items for a certain number of orders and packs them all together.
- Zone picking. Each picker has a warehouse zone and an order is 'built' as it gets passed through each zone.
- Wave picking. All zones are picked simultaneously and brought to a centralized packing station.
Knowing how each of this methods works allow you to understand how to achieve efficiencies, keep costs down and deliver the goods faster.
This entire process is sped up by using an order management system - preferably one that natively integrates with your ecommerce platform, and any key backend systems as well.
Optimizing the Order Management Process
Here's what to look for in terms of running a tighter order management process:
- Automate as much of the process as you can.
- Layout your warehouse(s) to allow for easy traffic flow. Shipping lists should be organized so that pickers can grab items without doubling back. This means that packing decisions are predetermined (fully automated). Packers shouldn't have to determine the size of the box, packing material or items on the order if you have an efficient system.
- The system should select shipping carriers automatically.
- Shipping labels are printed before the order goes to the picker. The address has also been verified prior to the pick.
- Automatic inventory updates prevent pickers from finding an empty shelf, delaying order fulfillment.
- Shipping status is sent back through the sales channel to update resellers and the customer.
Order fulfillment is by far the most complex piece of the order management process.
So many moving parts leave a lot of room for errors.
On the other hand, this gives you many opportunities to make things run smoother to save time and win big with customers.
Comment below with one thing that makes your process unique - we're always interested to see a wide variety of challenges.
If you're looking for automated, cost-effective solution, check out how one SkuNexus client automated 100% of their orders >>