Order volumes are exploding across retail channels. From multi-marketplace selling to direct-to-consumer shipping, modern businesses handle thousands of orders daily while customers
demand accuracy and speed, particularly as the U.S. e-commerce retail marketplaces made a collective $428.3 billion in 2024, up 11.4% year-over-year, with e-commerce retail marketplace
sales expected to reach $477.7 billion in 2025, according to e-commerce statistics analysis. An Order Management System (OMS) serves as the operational backbone that transforms chaotic
order flows into streamlined fulfillment processes. This comprehensive guide examines what defines effective order management in 2025 and provides actionable insights for selecting the right solution.
The growth is driven by multiple factors, including the rapid expansion of direct-to-consumer channels, where the global direct-to-consumer (DTC) ecommerce market is estimated to exhibit a
CAGR of 24.3% from 2024 to 2029, according to DTC ecommerce market research.
Schedule a Demo to see how the right OMS reduces manual intervention by 90% while improving accuracy to 96%.
What is an Order Management System?
An Order Management System is software that centralizes order processing from initial capture through final fulfillment. Modern OMS platforms serve as unified control centers,
orchestrating inventory allocation, payment processing, shipping coordination, and customer communication across multiple sales channels.
Definition and Core Purpose
The primary function of an OMS extends beyond simple order tracking. These systems provide real-time visibility into inventory levels, automate fulfillment workflows, and ensure orders reach customers accurately and on time. When order volume increases, the need for sophisticated order management becomes critical to maintain operational efficiency.
Key Components of an OMS
Essential components include inventory management, order routing logic, payment processing integration, warehouse management connectivity, and customer communication tools. Advanced systems like TOMS (Distributed Order Management) provide multilevel product management, channel management, and application error dashboards to handle complex fulfillment scenarios.
How Does an Order Management System Work?
Overview of the Workflow
Order management follows a structured flow: order capture, inventory verification, payment authorization, fulfillment routing, shipping coordination, and delivery tracking. Each step requires coordination between multiple systems and stakeholders.
The process begins when customers place orders through various channels (websites, marketplaces, mobile apps, or phone). The OMS immediately checks inventory availability across all locations, reserves stock, and routes orders to optimal fulfillment centers based on proximity, inventory levels, and shipping costs.
Role of Automation in Order Management
Automation eliminates manual touchpoints that create delays and errors. Modern systems automatically split orders across multiple locations, generate pick lists for warehouse teams, trigger shipping label creation, and send tracking notifications to customers. This automation reduces processing time while improving accuracy.
Who Needs an Order Management System?
Businesses Benefiting from OMS
Retailers, ecommerce brands, distributors, and both B2C and B2B operators managing high SKU and order volumes benefit most from sophisticated order management. Companies processing hundreds of orders daily across multiple channels find OMS platforms essential for maintaining customer satisfaction while controlling operational costs.
Specific Industries Utilizing OMS
Fashion retailers managing seasonal inventory, electronics distributors handling technical specifications, food and beverage companies with expiration date tracking, and healthcare suppliers requiring compliance documentation all rely on specialized order management capabilities. Each industry requires specific features for regulatory compliance and customer expectations.
Essential Features of an Order Management System
Inventory Control and Management
Real-time inventory visibility across all channels prevents overselling while maximizing sales opportunities. Effective inventory management includes lot tracking, expiration date monitoring, and automated reorder points. Systems must synchronize inventory levels across websites, marketplaces, and physical stores instantly.
Order Processing Capabilities
Core processing features include order validation, payment authorization, fraud detection, and fulfillment routing. Advanced capabilities encompass order splitting, partial shipments, and complex promotional pricing. The system should handle high-volume processing during peak periods without degradation.
Integration with Other Systems
Modern OMS platforms must integrate seamlessly with e-commerce platforms, accounting software, warehouse management systems, and shipping carriers. Salesforce integration services enable unified customer experiences across Commerce Cloud, Service Cloud, and Marketing Cloud platforms.
| Integration Type |
Core Functions |
Business Impact |
| E-commerce Platforms |
Real-time inventory sync, order import |
Prevents overselling, automates order flow |
| Warehouse Management |
Pick list generation, shipping coordination |
Reduces fulfillment time, improves accuracy |
| Accounting Systems |
Revenue recognition, cost tracking |
Streamlines financial reporting |
| Shipping Carriers |
Rate shopping, label printing, tracking |
Optimizes shipping costs, enhances visibility |
Types of Order Management Systems Available
Cloud-Based vs. On-Premise Solutions
Cloud-based systems offer faster implementation, automatic updates, and scalable infrastructure without capital investment. On-premise solutions provide complete control over data and customization but require significant IT resources for maintenance and updates.
Cloud platforms typically provide better integration capabilities with modern e-commerce tools and can scale during peak periods. However, businesses with specific security requirements or legacy system dependencies may prefer on-premise deployment.
Industry-Specific Solutions
Generic OMS platforms serve basic needs, but industry-specific solutions address unique requirements. Fashion retailers need size matrix management, food distributors require cold chain tracking, and pharmaceutical companies need a lot of traceability and compliance reporting.
Steps to Choosing the Right Order Management System
Identify Your Business Needs
Begin by documenting current order volumes, channel complexity, and integration requirements. Calculate processing costs, error rates, and customer satisfaction metrics to establish baseline performance. Consider growth projections and seasonal fluctuations that impact system requirements.
Document specific pain points: manual processes consuming staff time, inventory discrepancies causing stockouts, or shipping delays damaging customer relationships. These issues guide feature prioritization during vendor evaluation.
Evaluate Potential Solutions
Create detailed requirement matrices comparing vendor capabilities against business needs. Request demonstrations using your actual data rather than generic examples. Evaluate user interfaces for both administrative functions and daily operational tasks.
Compare Costs and Features
| Cost Component |
Typical Range |
Evaluation Criteria |
| Implementation |
$10K - $100K+ |
Complexity, customization needs |
| Monthly Licensing |
$500 - $5,000+ |
User count, transaction volume |
| Integration Costs |
$5K - $50K+ |
Number of systems, complexity |
| Training & Support |
$2K - $20K+ |
User base size, ongoing needs |
Consider the total cost of ownership, including implementation, training, ongoing support, and future enhancement costs. Simple solutions like TOMS Lite offer quick integration for smaller operators, while comprehensive platforms like TOMS handle complex multi-channel requirements.
Key Factors to Consider When Evaluating OMS
Scalability and Flexibility
Evaluate how systems handle growth in order volume, SKU count, and channel expansion. Consider seasonal scaling requirements and geographic expansion plans. Systems should accommodate new fulfillment centers, additional sales channels, and enhanced functionality without complete reimplementation.
User Interface and Experience
Daily users include customer service representatives, warehouse staff, and management teams. Interfaces must be intuitive for non-technical users while providing comprehensive functionality for power users. Mobile accessibility enables real-time updates from warehouse floors and remote locations.
Customer Support and Training
Implementation success depends heavily on vendor support quality. Evaluate support response times, escalation procedures, and knowledge base quality. Training programs should address different user roles and skill levels while providing ongoing education for new features.
Improving Your Order Management Process
Streamlining Operations
Effective order management eliminates redundant steps while maintaining accuracy and control. Automation handles routine decisions like fulfillment routing and shipping method selection, freeing staff for exception handling and customer service.
Document current workflows and identify automation opportunities. Simple changes like automated order acknowledgments and shipping notifications significantly improve customer satisfaction while reducing support inquiries.
Enhancing Customer Satisfaction
Customer expectations continue rising for fast, accurate fulfillment with real-time visibility. Order management systems should provide automatic status updates, accurate delivery estimates, and seamless returns processing.
The most effective systems enable customer self-service through order tracking portals while providing customer service teams with complete order histories for efficient problem resolution.
FAQ's
What features define the best OMS in 2025?
The best systems combine real-time inventory visibility, intelligent order routing, comprehensive integration capabilities, and scalable cloud architecture. Advanced features include AI-powered demand forecasting, automated exception handling, and unified customer communication.
How to choose between OMS vendors?
Evaluate vendors based on industry experience, integration capabilities, scalability, and total cost of ownership. Request demonstrations using your actual data and speak with current customers in similar industries. Consider implementation timelines and ongoing support quality.
What is the difference between OMS and ERP?
OMS focuses specifically on order fulfillment and customer experience, while ERP systems manage broader business processes, including finance, human resources, and manufacturing. Many businesses use both systems with integration between them.
Which OMS offers the easiest implementation?
Implementation complexity varies significantly based on business requirements and existing system integration needs. Cloud-based solutions typically deploy faster than on-premise systems, and vendors with industry experience provide smoother implementations.
How much does an OMS cost per month?
Monthly costs range from $300 for basic cloud solutions to $1,000+ for enterprise platforms.
What integrations should my OMS include?
Essential integrations include e-commerce platforms, accounting systems, warehouse management, and shipping carriers. Advanced integrations with CRM, marketing automation, and business intelligence systems provide comprehensive customer insights.
