Does your business need an order management system?

Published on Feb 12, 2025

One of the most important things for a retail business is keeping track of orders and inventory to ensure fast shipping to customers while maintaining accurate records of profits and stock availability. The last thing you want is for your business to gain a reputation for slow delivery times.

So, how does a business keep track of all its orders across multiple eCommerce stores while updating inventory accordingly? That’s where order management systems come into play.

What is an order management system?

An order management system (OMS) is software that stores all your orders and items, tracks inventory, and displays the current status of each order. OMSs can also help you print shipping labels and update order statuses in real time, from start to finish.

This allows businesses to speed up shipping times by consolidating orders from various eCommerce platforms (Shopify, WooCommerce, etc.) into a single location. With all orders in one place, it's easier to track what needs to be shipped, reducing the risk of missed or delayed orders.

Additionally, order management systems integrate Economic Order Quantity (EOQ) calculations. EOQ is a formula that helps businesses determine the optimal order quantity to minimize total inventory costs, including ordering and holding costs. By automating EOQ within an OMS, businesses can avoid overstocking, reduce storage expenses, and ensure they always have the right amount of inventory on hand.

OMSs also ensure that the oldest inventory is sold first (First-In, First-Out or FIFO). This is particularly advantageous for businesses dealing with perishable goods, such as food and pharmaceuticals. By following FIFO, companies reduce the risk of expired or outdated products, improving product quality and minimizing losses.

When is the right time to get one?

If a business feels the need for an order management system, it’s already behind. In some cases, delays in integrating an OMS can permanently harm a business, as customers rarely forget slow shipping times. If a business becomes known for late deliveries, rebuilding its reputation can be difficult.

That’s why businesses should start thinking about order management systems early and set one up before it’s too late.

Conclusion

If your business is processing more than 20 orders per week, it’s time to integrate an order management system. Let modern software handle the logistics so your business can focus on what truly matters—scaling!