With so many tools, apps, systems and organisations available to help ecommerce companies run their businesses, it’s hardly surprising that some people feel bamboozled.
You might be asking yourself: “Is a carrier management system the same as an order management system?” “Why do some software companies offer an all-in-one ecommerce solution while others specialise in different parts of the process?” and “How do I choose the right solution for my business?”
Fortunately, help is available. Here we look at what order management systems and carrier management systems are, what makes them different, and how they might help you tackle some common ecommerce challenges.
What is an order management system?
An order management system (OMS) is a complex piece of software that helps businesses manage the entire lifecycle of an order.
The OMS tracks an incoming order all the way from when it’s moved into stock (and advertised and sold via the retailer’s many sales channels) and ordered by the customer right through to when the package is delivered to them.
In essence, an OMS streamlines your entire fulfilment process – making life easier for both you and your customers.
What is a carrier management system?
Carrier management is part of the complete order management process. It is the element that deals with the customer or retailer choosing their preferred delivery method when placing the order to receiving it at their doorstep or chosen pick-up point.
A carrier management system (CMS) is software that streamlines and automates the entire shipping process. It typically provides the tracking updates from the carriers back into the OMS or other elements of the ecommerce infrastructure that helps manage the communication to the end customers.
A CMS provides retailers with easy access to multiple carriers. Retailers can then manage the range of services and solutions they offer consumers to give greater delivery choice – without having to liaise or integrate with each carrier individually.
Do I need both systems to manage an ecommerce business effectively?
There is no right or wrong answer here. Both are just two parts of the ecommerce pipeline. Much depends on the nature and size of your business.
Small to medium-sized companies typically sell their products across one or two sales channels (their website and eBay or Amazon for example) and benefit from using an order management system (or may manage their orders offline on a spreadsheet) and integrate their carrier(s) of choice such as Royal Mail directly for their deliveries.
Whereas for medium to large enterprises, many product lines and sell across multiple sales channels (own website, eBay, Amazon, Etsy, social media apps like TikTok and physical stores etc.) might consider partnering with a dedicated OMS and/or a warehouse management system (WMS), and/or a CMS to manage and ship different elements of the order process.
This is where it gets complicated.
Some businesses will handle the order processing part themselves (they may even work with an external developer to set up a bespoke order management system for them) and then work with a carrier management company to handle the shipping.
Some will partner with various suppliers’ solutions to handle each part of the ecommerce process separately and then link them all together.
Others will use partners that cover multiple elements of the process.
So, how do you know what’s the right system for you?
What are the benefits of an all-in-one system?
If you were around in the 1980s and 90s, you might remember the penchant for all-in-one music systems that combined tuners, turntables, CD players, amplifiers and speakers all in one neat little unit.
However, like the washer drier, combi microwave oven and other space-saving inventions, all-in-one often meant inferior quality. People who know a thing or two about music (or laundry or cooking) generally believe that individual specialisms deliver better results than one-stop-shops.
But is that also true for ecommerce? Does all-in-one mean an inferior service?
It depends on your wants and needs. If the convenience of having one supplier handle your entire order management process is a top priority, it makes sense to go down that route.
However, using dedicated systems for each element potentially allows for more refined and up to date solutions to serve specific needs. But then you need to consider how each element neatly integrates with each other.
Fortunately, great partnerships exist in this industry with many solutions tying in links and integrations to make the whole customer experience seamless.
For example, a good carrier management solution doesn’t just provide the shipping labels for the chosen carriers. It also provides relevant customs documents, hazmat labels, customer communications (like branded emails providing delivery updates), returns solutions and branded returns portals.
What are the main features and benefits of an order management system?
A dedicated order management system helps retailers coordinate the entire fulfilment process – from picking and packing to delivery and after service.
The OMS can track stock levels in warehouses, form part (or all) of a warehouse management system, combine orders from multiple channels, and liaise with third-party logistics providers (3PLs), if needed, to get your products to your customers quickly.
The following table shows the features and benefits of order management systems. However, not all order management systems can do all the following. You should talk to several suppliers to see what features their systems offer.
What are the main features and benefits of a Carrier Management System?
The main feature of a carrier management system is the ability to automate multiple carriers through one API (Application Programming Interface) integration. It allows businesses to choose the carrier and services that meet their customer delivery demands while helping to reduce costs, improve the quality of service, improve operational processes and offer customers greater delivery choices.
A CMS takes order information on a product, recipient delivery location and delivery requirements (for example, next day, guaranteed, signature or collect from store) and shares that data with the carrier through an API. This enables the customer to print the correct shipping labels and provide all the necessary customs information.
A CMS also provides retailers, 3PLs and third-party integrators (3PIs) a way of bridging the gap between customer expectations and carrier choice, ensuring integrations are up-to-date, robust and secure.
In summary, both order management systems and carrier management systems can help overcome many of the challenges associated with running an ecommerce business.
By automating the entire order fulfilment process, these systems:
- Reduce the risk of human error in order picking, packing and delivery
- Manage sales over multiple channels easily
- Save time by not having to liaise with multiple different third parties yourself
- Allow you to integrate new products or data without having to re-key in information
- Satisfy customers with more delivery options and faster deliveries
- Keep track of inventory so you don’t run low or out of stock
- Improve customer loyalty with easy returns of unwanted items