When website orders, marketplace sales and store reservations all draw on the same stock, keeping everything in sync can become a challenge. Each channel may have its own system, stock levels might update in batches, and staff end up reconciling orders manually.
The problems tend to surface when an order can’t be fulfilled, a parcel leaves from the wrong location, or a customer contacts support to ask where their delivery has gone.
An order management system (OMS) brings orders from different sales channels into one place. It tracks available stock, decides where orders should be fulfilled and follows each order through to delivery, cancellation or return.
For retailers selling across multiple channels and locations, the right OMS can reduce manual work and give teams greater control over how orders are fulfilled. The key is understanding how it fits alongside your existing systems and which capabilities your business actually needs.
What is an order management system (OMS)?
An OMS manages the order lifecycle across your sales channels. Although features vary between platforms, most systems cover six core functions.
- Order capture across channels. Orders from your website, marketplaces, physical stores, customer service teams and wholesale accounts are brought together in one operational view.
- Available-to-promise stock. Rather than relying on a simple stock count, the OMS calculates how many units are available to sell. It takes account of stock at each location, units already allocated or reserved, safety buffers and, where supported, incoming stock that you choose to make available for sale.
- Order routing. Rules determine which warehouse, store, third-party logistics provider (3PL) or supplier fulfils an order. Depending on the system, individual lines can be routed to different locations.
- Fulfilment orchestration. The OMS sends instructions to the systems handling the physical work, such as a warehouse management system (WMS), a 3PL platform, a store picking app or a drop shipping supplier. It then receives updates as the order progresses.
- Exception handling. Problems such as short picks, failed payments, delayed inbound stock, address issues and cancellations are flagged for attention rather than left to surface through customer complaints.
- Customer status updates. Order, dispatch and delivery information is shared with connected storefronts, marketplaces and customer service systems to keep order status consistent.
Inventory management is closely related, but the two aren’t quite the same. Inventory management software tracks stock levels and supports replenishment, while an OMS decides how available stock should be allocated to orders. Some platforms combine both sets of features, so it’s worth comparing what each product actually does rather than relying on its name.
OMS vs eCommerce platform vs WMS vs ERP
An eCommerce platform is often where order management begins, but it isn’t necessarily equipped to coordinate fulfilment across multiple channels and locations.
The four systems have different primary responsibilities, although their capabilities can overlap.
| System | Primary job | Decides | Not typically used for |
| eCommerce platform | Storefront, checkout and order capture for its own channel | Product presentation, checkout and orders placed through its own channel | Coordinating fulfilment across multiple channels and locations |
| OMS | Order lifecycle across all channels | Order allocation, fulfilment routing, splits and exceptions | Detailed warehouse task management and financial accounting |
| WMS | Operations inside a warehouse | Picking, putaway, packing and warehouse inventory accuracy | Deciding how orders should be allocated across a wider network |
| ERP | Finance, purchasing and system of record | Costs, invoicing, purchasing and procurement | Real-time order routing across multiple fulfilment locations |
A WMS, for example, can track precisely where a product sits in a warehouse and help staff pick and pack orders efficiently. It isn’t necessarily designed to decide whether a store closer to the customer could fulfil an order sooner.
That distinction matters when warehouse teams are under pressure, particularly when peak-season order fulfilment puts additional demands on staff, space and dispatch capacity.
An ERP provides the financial and operational records the business relies on, but it may not be designed to allocate stock across several locations in the time available at checkout.
The boundaries aren’t always clear-cut. Some ERPs include order management modules, while some OMS platforms offer basic warehouse functionality. When comparing systems, focus on where each one adds value and how they exchange information.
When does platform order management stop being enough?
If you sell through one website and fulfil orders from one warehouse, the order management features built into your eCommerce platform may be perfectly adequate.
As your operation grows, however, coordinating orders becomes more complicated. Common signs that your current setup may be struggling include:
- Multiple stock locations. You fulfil orders from several warehouses, stores, a 3PL or suppliers through drop shipping.
- Sales across several channels. Your website and marketplaces have different order feeds, dispatch deadlines and cancellation rules.
- Frequent split shipments. Orders regularly arrive in several parcels, and you have limited control over when or where they’re dispatched.
- Manual stock allocation. Someone has to check multiple systems each day to work out which location should fulfil each order.
These issues don’t automatically mean you need a dedicated OMS. Some eCommerce platforms handle multiple locations and channels well, and an OMS is only one part of a multichannel eCommerce technology stack.
The decision comes down to how well your current systems cope and what the workarounds are costing you. Look at the time spent allocating orders, the number of fulfilment errors and the volume of customer contacts caused by stock or delivery problems.
If several of these issues are becoming routine, it’s worth assessing whether a dedicated OMS could improve the operation.
Distributed order management: how routing decisions are made
Distributed order management (DOM) determines where orders should be fulfilled when stock is spread across several locations. It treats warehouses, stores, 3PLs and suppliers as a connected network, using rules to allocate orders to the most suitable source.
Gartner’s overview of distributed order management systems highlights capabilities including order routing and inventory allocation, an enterprise-wide view of available-to-promise stock and order visibility.
Not every OMS offers this level of control. Some provide little more than a list of preferred fulfilment locations, while others support more complex rules. If you need distributed order management, test the actual routing logic rather than assuming it’s included.
The routing rules
Depending on the platform, routing decisions may be based on mandatory requirements, prioritised rules or weighted criteria.
Common considerations include:
- Stock availability. Does the location have enough stock to fulfil the order after reservations and safety buffers are taken into account?
- Delivery distance and timing. Which locations can meet the promised delivery date, and how close are they to the customer?
- Shipping costs. What will delivery, packaging and handling cost from each location for the service selected?
- Avoiding split shipments. Can one location fulfil the entire order, reducing the number of parcels and associated costs?
- Store capacity. Can a store pick and pack the order without affecting its ability to serve customers on the shop floor?
The relative importance of each factor depends on your business. The cheapest option isn’t necessarily the best if it delays delivery, ties up valuable store stock or creates additional work for the fulfilment team.
A worked example: one order, two locations
Consider a customer ordering a jacket and a pair of boots on standard delivery, with arrival promised within three working days.
Your central warehouse has the jacket but no boots. A replenishment is due in two days. Meanwhile, a store around 15 miles from the customer has both items in stock.
The OMS has three possible options.
1. Split the order. The warehouse dispatches the jacket immediately, while the store sends the boots separately. The customer receives both items quickly, but the retailer pays for two shipments and the store needs to pick and pack an additional order.
2. Wait and ship together. The warehouse holds the jacket until the boots arrive, then dispatches both items in one parcel. This could reduce shipping costs, but the delivery promise depends on the replenishment arriving on time.
3. Ship everything from the store. The store sends both items in one parcel, potentially getting them to the customer sooner. However, this uses stock that might otherwise sell in-store and depends on the store having enough capacity to fulfil the order.
Which option makes sense depends on the rules you’ve set. You might prioritise delivery promises, limit additional shipping costs, protect store availability or take the reliability of incoming stock into account.
The advantage of distributed order management is consistency. Instead of staff making these decisions manually, the system applies agreed rules to each order. Depending on the platform, it can also record why a particular location was selected and flag orders that can’t be allocated under the existing rules.
When assessing suppliers, use an example like this in your demonstration. Ask them to show which rule determines the outcome, then change one of the priorities and see how the allocation changes.
Omnichannel fulfilment models and what each asks of the OMS
Different fulfilment models introduce different requirements. Your OMS needs to coordinate them while keeping stock availability and delivery promises accurate.
- Click and collect. The system reserves stock at a specific store or arranges for it to be transferred there. It tracks when the order is ready, triggers collection notifications and releases stock if an order is cancelled or left uncollected.
- Ship from store. Stores become fulfilment locations. This requires reliable store stock information, manageable picking workflows, capacity limits and suitable carrier collection arrangements.
- Drop shipping. Suppliers dispatch orders directly to customers. The OMS passes on orders and receives tracking updates, relying on supplier stock feeds that may not update as frequently as your own systems.
- 3PL fulfilment. A third-party logistics provider manages its own warehouse operations. The OMS sends orders and receives stock and shipment updates, although the level of automated reconciliation varies between providers.
Before choosing a system, consider which models you use today and which you might introduce next. It’s worth checking that a platform can support your likely requirements without making the implementation unnecessarily complicated.
Data readiness: an OMS is only as good as its stock data
Automated routing depends on knowing how much stock is available at each location. If sales aren’t deducted promptly, returns aren’t processed correctly or store counts are out of date, the OMS can promise products that aren’t actually available.
This is particularly noticeable with ship-from-store and click-and-collect orders, where stock is handled by both customers and staff.
Before implementation, establish how frequently stock updates reach the central system, how discrepancies are reconciled across stores and 3PLs, and when returned items become available for sale again.
It’s also worth recording a baseline before approaching suppliers. Useful measures include:
- The proportion of orders requiring manual intervention
- Cancellations caused by stock discrepancies
- The proportion of orders dispatched in multiple parcels
- The time taken for stock updates to reach each sales channel
These figures help you assess whether a new OMS is justified and provide a way to measure its impact after implementation.
What to evaluate in an OMS: a buyer checklist
Once you understand your fulfilment requirements and the quality of your existing data, you can compare suppliers against the scenarios your business needs to handle.
Operational and integration capabilities
- Supported fulfilment models. Can the system handle the models you use now and plan to introduce, including click and collect, ship from store, drop shipping, 3PL and wholesale?
- APIs and connectors. Ask for documentation covering integrations with your eCommerce platform, marketplaces, WMS, 3PLs and ERP. Find out who maintains each connector, how frequently stock updates are processed and what happens when a connected system changes.
- Configurable routing rules. Can your team adjust allocation rules without development work? Can you test changes in a sandbox using realistic order data before applying them to live orders?
- Monitoring and exception handling. How does the system identify stuck, failed or delayed orders? Who receives alerts, and can staff investigate and resolve exceptions within the OMS?
- ERP reconciliation. How are orders, refunds and stock movements passed to the ERP? What tools are available for identifying and resolving discrepancies?
- UK carriers and marketplaces. Check support for the carriers and marketplaces you currently use or plan to add, including label generation, tracking and dispatch cut-off times.
Commercial fit and long-term performance
- Performance at peak. Ask how the platform has performed during customers’ busiest trading periods. Request references from businesses with a similar order profile, and test any claims about processing capacity against your own requirements.
- Total cost of ownership. Include subscription or licence fees, charges per order or by volume, implementation, integrations, internal staff time and the cost of future changes.
- Product roadmap. Find out which capabilities are available now and which are still planned. Ask how customer feedback influences development priorities and whether upcoming changes could affect your implementation.
The strongest supplier is the one that fits your operational requirements, not necessarily the one with the longest feature list. Use your own order scenarios to test how each system behaves and speak to customers who have implemented it to understand what the process involved.
Frequently asked questions
What’s the difference between an OMS and an ERP?
An ERP manages financial and operational records, including costs, purchasing and invoicing. An OMS manages orders across sales channels and determines how they should be fulfilled.
The systems usually work together, with the OMS passing relevant order, refund and stock information to the ERP.
Does my eCommerce platform already include order management?
Most eCommerce platforms manage orders placed through their own storefront, and some offer features for multiple locations or marketplaces.
If your team is regularly allocating stock manually, resolving fulfilment conflicts or coordinating orders across disconnected systems, the platform’s existing capabilities may no longer be sufficient.
Can an OMS help prevent overselling?
An OMS can reduce overselling by calculating available stock across locations and updating connected sales channels as orders are allocated.
It can’t eliminate the risk entirely. If stock records are inaccurate or updates are delayed, the system may still promise a product that isn’t available.
Do I need an OMS if I already have a WMS?
Not necessarily. A WMS manages warehouse operations, including picking, packing and stock movements. If you fulfil orders from one warehouse, your WMS and eCommerce platform may be enough.
When orders can be fulfilled from multiple warehouses, stores or suppliers, an OMS can coordinate allocation across those locations. Whether you need one depends on how well your existing systems manage that process.
Discuss your order management requirements at eCommerce Forum
An OMS becomes more valuable as the number of sales channels, stock locations and fulfilment options grows. Before investing, establish which scenarios you need to support, whether your stock data is reliable enough for automated allocation, and how well potential systems fit your existing technology and processes.
Speaking to solution providers can help you explore the options and test how different platforms would handle your requirements.
The next eCommerce Forum takes place on 4 February 2027 at Hilton London Canary Wharf. Qualifying eCommerce and digital decision-makers attend as hosted buyers, meeting technology and service providers through pre-arranged 20-minute meetings, alongside seminars and panel discussions.
You can select the product and service areas most relevant to your business when applying. Attendance is fully funded for qualifying buyers who can sign off budgets, subject to the event’s attendance conditions.
Find out who qualifies to attend or apply for a buyer place.
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