What Is an Order Management System? Software and Features (2026)

For many businesses—especially high-growth merchants—it can be tricky to manage and fulfill orders across multiple sales channels and fulfillment locations. Between order placement and delivery lies an ocean of challenges like inventory visibility, order profiles, and returns. 

One solution to solve these problems? An order management system (OMS) that tracks stock levels across warehouses, combines order data across multiple sales channels, streamlines fulfillment, ships orders fast, manages returns and exchanges, and centralizes reporting. 

In this guide, we’ll cover a wide range of details about order management systems, from which tasks an OMS should handle to the benefits of having a centralized dashboard. We’ll also help you evaluate the type of OMS your business needs, including recommendations of tools to try. 

What is an order management system?

An order management system (OMS) is a digital tool used to track sales, orders, inventory, and fulfillment. It streamlines the order lifecycle, from receipt of order to delivery, ensuring accuracy and efficiency. An OMS includes processes like order entry, resource allocation, and monitoring order status. 

Using an OMS directly impacts shipping costs, labor efficiency, and returns costs for your business. It does this by unifying orders into one dashboard, which helps: 

• Unlock bulk shipping discounts with carriers.
• Get returned merchandise available for sale quickly. 
• Reduce training times for warehouse staff—they only need to learn one system.

For example, Shopify, a leading ecommerce platform, offers a built-in OMS as part of its service. With Shopify's system, ecommerce businesses can process multichannel orders—including in-store purchases, online store sales, and other marketplaces—and manage them all from a single platform.

Order management system features

An OMS is a comprehensive solution to streamline end-to-end fulfillment, from order entry to delivery. Some systems, like Shopify’s, also provide distributed order management to coordinate fulfillment across multiple warehouses and locations.

Top features include: 

• Order management dashboard: A centralized hub for order oversight. Filter, sort, search, tag, and add notes to orders. Track delivery status, enabling easy follow-up on failed or delayed deliveries. Easily view and organize all customer orders in one customizable interface by delivery destination, fulfillment status, product SKUs, and more for real-time visibility and prioritization.
• Smart order-routing: Prioritizes and allocates orders to optimal fulfillment locations using various criteria. Works with your facilities or third-party logistics providers (3PLs) to fulfill orders more efficiently.
• Automations: Use Shopify Flow to automate and streamline fulfillment, inventory, and returns processes. Reduce manual intervention, minimize errors, and save time by automating repetitive tasks.
• Bulk operations: Create, buy, and print multiple shipping labels, packing slips, and forms in one place. Perform bulk actions for fulfillment, requests, and cancellations to speed up processing.
• Order-editing capability: Modify any order before shipping to improve the customer experience and reduce errors. Provides flexibility in managing requests and corrections without disrupting fulfillment.
• Draft order creation: Generate orders and invoices from anywhere, and email them to customers for online or in-person payment. Supports various sales scenarios with enhanced flexibility in order creation.
• Unified inventory control: Synchronizes stock levels across your locations and sales channels to prevent overstocking or shortages.
• Real-time order analytics: Access instant insights on all customer orders—placed, open, fulfilled, delivered, and returned. Use real-time data for informed decision-making and to identify areas for improvement.
• Third-party logistics integration: Integrate with leading 3PL partners and systems using hundreds of off-the-shelf apps built and maintained by trusted system and integration partners.
• Enterprise resource planning (ERP) integration: Links with back-office systems to provide comprehensive financial and operational oversight.
• Customize with APIs: Use fulfillment APIs that give you the flexibility to build custom workflows to model and automate unique and complex fulfillment flows.

How an OMS supports cost-cutting in retail

An order management system helps cut costs in three areas: shipping, labor, and returns. 

Shipping cost levers

Shipping is a huge point of contention for many retailers. Customers aren’t willing to budge on their expectations for fast, reliable, and (sometimes) free shipping. But absorbing these costs can eat into margins.

An OMS helps you meet these expectations while limiting shipping costs using features like: 

• Smart order-routing: The OMS looks at all inventory—including physical stores—and sees that the Chicago branch has two in stock. It routes the order for ship-from-store, turning a 400-mile journey into a 5-mile local delivery.
• Order consolidation: An OMS can pause an order for a few hours to see if a single node can fulfill the entire basket, or it can route items to a "hub" store to be packed together. For example, if a customer buys a shirt, a pair of shoes, and a hat, shipping them in three separate boxes from three different locations triples your packaging and carrier costs.
• Shipping-rate comparison: Instead of just defaulting to a single carrier , the OMS can browse different shipping carriers and select the best rate in real time.

Labor cost levers

Manual order fulfillment is slow, prone to errors, and requires highly trained—and expensive—fulfillment staff. An OMS can handle repetitive tasks and help with lean warehouse management, giving your team more time to focus on high-touch areas—for example, packing high-value orders—that require human intervention. 

Practical ways to reduce labor costs with an OMS include: 

• Order automation: Speed up repetitive tasks by having automation do them for you. This type of workflow automation can also help you keep VIP customers happy—if a loyalty member places an order, the OMS could automatically move them to the front of the picking queue for faster fulfillment.
• Bulk actions: An OMS can print shipping labels, generate packing slips, and send order notifications to your customer in bulk. These time savings quickly add up when order volume increases. 
• Exception-handling: Unexpected circumstances can throw off your order fulfillment process. Your OMS can flag this for teams to fix. For example, if an order is stuck in "Ready for fulfillment" for more than 8 hours, or if a carrier reports a delay, the OMS could flag it on a dashboard for your team to step in. 

Returns and fraud cost levers

The NRF estimated that total returns for the retail industry in 2025 would reach $850 billion, with 19.3% of all items bought online eventually working their way back to the retailer. 

An OMS helps cut these reverse logistics costs through: 

• Return fraud prevention: An OMS checks a customer’s receipt against the order logged in the system. It can check for red flags—like the receipt being reused, the SKU never purchased at that brand, or the original item bought at a lower price—to flag or deny the fraudulent return.
• Ensuring inventory availability: Without an OMS, a returned item might sit in a return center for weeks. With an OMS, as soon as the store associate scans and approves the return, the item can immediately go live in the OMS inventory for another customer to buy.
• Optimizing returns shipping: Not every return should go to the main warehouse. An OMS can route returns based on the item's condition or location. For example, customers located near your New York store get a buy online, return in-store (BORIS) label. This eliminates the return shipping costs and puts the customer back in your store.

💡Tip: As the only platform to natively unify POS and ecommerce on the same platform, with Shopify you get one “business brain” to manage orders. Customers can buy online and return in-store (or vice versa) using the same infrastructure that powers every sales channel. 

What does an OMS do?

An OMS tracks inventory levels by channel, automates the order fulfillment process, handles reverse logistics, manages customer information, and merges order and financial data. In short: it ensures the customer gets what they ordered, and lets both you and the customer know when the order has arrived.

Track inventory levels by channel

The beauty of modern-day business is that brands can reach customers through a variety of channels. Customers can purchase items in-store through point-of-sale (POS) software, self-serve through a brand’s direct-to-consumer (DTC) ecommerce store, shop online marketplaces or social media channels, or even combine online and offline activity with delivery options like buy online, pick up in-store (BOPIS).

An OMS helps retailers manage and synchronize inventory across the multiple locations they’re fulfilling items from, whether from a physical retail store, or a fulfillment center or warehouse. It’s a tool designed to help ecommerce brands that plan to invest in their inventory management process over the next two years. 

With an OMS, you can:

• Update inventory levels across all retail stores and fulfillment locations
• Transfer inventory between retail stores and fulfillment locations
• Automatically be notified when SKUs are low in stock and restock accordingly 
• Understand which SKUs sell best by region or sales channel

Automate the order fulfillment process

A modern OMS treats the supply chain as an interconnected ecosystem, allowing merchants to automate their internal processes from order to fulfillment. 

To push orders through the processing, picking, and shipping process in as little time possible, ecommerce merchants can rely on an OMS to:

• Accept payments regardless of shipping destination or order currency
• Route orders through to the best fulfillment location, including merchant-managed warehouses, retail locations, or 3PL
• Automatically print shipping labels and packing slips if you’re fulfilling orders in-house 
• Track order fulfillment and delivery status with connected shipping providers

A good OMS should route orders to the best location, not only in terms of a customer’s proximity to your warehouse, but also for grouping orders within the same destination market, minimizing split fulfillments, or ranking priority locations.

Handle reverse logistics

Your OMS can help you avoid upsetting your customers and provide a fuss-free returns experience for everyone involved. It might also support self-serve returns in your online store, enabling customers to initiate returns whenever it’s most convenient for them, without the hassle of contacting a representative over the phone or email.

It can automatically print return labels in case a customer needs to send items back. The return address will differ based on the customer’s location, letting you receive and process refunds in as little time as possible. Customers can also check the status of their return with online order tracking. 

Not only that, but customer service teams get immediate information on any product a customer has shipped for return. All customers get the same level of service regardless of what they purchased, and how or where they bought it.

Manage customer information

An OMS can act as a customer relationship management (CRM) platform, allowing merchants to access all information they have on a customer, including previous orders, lifetime value, and their location. 

With the insights into customer data they gain from an OMS, merchants have the ability to hyperpersonalize any marketing messages they send to customers when trying to secure another sale. 

For example, an ecommerce brand can pull data from their OMS to create the following customer segments: 

• Customers located in Europe
• High-value customers with an average order value (AOV) of more than $50 
• People who’ve bought one item and not yet returned to the website

The brand then develops a distinct marketing strategy for each customer segment. Those located in Europe won’t get the same marketing emails as your US audience. Expensive items are recommended to customers with a high AOV—those who are more likely to buy. Bestsellers are put front and center in your emails to one-time customers. 

💡Tip: Shopify creates a unique customer profile each time a shopper shares their email address or phone number with you. It pulls this data when you build segments, with any changes to the original profile reflected in real time.

Merge order and financial data

It’s all well and good to see all your order data in one central location. But an essential part of running an ecommerce business is judging whether you’re actually turning a profit—and if so, where and how, so you can zone in on making more.

Most order management systems have the ability to integrate with other back-office functions—particularly your finance software or enterprise resource planning (ERP) system. The platform can pull information from your accounting software to merge inventory and sales data. You’ll be able to gain insight into accounts payable and receivable, as well as automate the production of invoices and purchase orders, with no manual data entry required.

The order management process in seven steps

Every order goes through the same process when it arrives in your retail OMS: 

1. Order capture: The moment a customer clicks "Purchase" on your website, app, retail store, or marketplace, the OMS captures the data.
2. Order routing: The OMS decides the best fulfillment method. Should it ship from the warehouse (to cut labor cost) or a local store (to reduce shipping cost)?
3. Fulfillment request: The OMS sends order details to the chosen location. If it’s a warehouse, the order flows into the warehouse management system (WMS). If it’s a retail location, the request pops up on the store’s POS system.
4. Order fulfillment: The OMS prints a packing list for teams to prepare the order. 
5. Shipping label generation: The OMS (or integrated shipping tool) compares carrier rates in real time to find the cheapest service that will still hit the customer's promise date. 
6. Exception handling: If anything goes wrong—for example, a store associate finds the last item is damaged or a carrier package is lost—the OMS flags the order for your team to step in and investigate.
7. Order confirmation: Once the carrier scans the package, the OMS sends your customer a "Your order is on the way!" email with an order-tracking link. 

OMS vs. ERP vs. WMS vs. TMS: What each system owns

Order management systems are just one platform used by retailers. Here’s how it compares to other tools: 

The best order management software

Whether you’re searching for your first OMS or looking to replace your existing one, here are four great options to consider. 

Shopify

Shopify is an all-in-one ecommerce platform for scaling brands. The platform comes with a built-in order management system, with which you can process orders in-store, from your online store, or from other sales channels and marketplaces. 

You can also track, manage, and fulfill orders from one central dashboard. Shopify will also automatically route orders to the best fulfillment location based on order-routing rules set by the merchant.

Shopify's OMS also offers:

• Integration with top carriers like USPS, UPS, and DHL
• Discounted shipping rates (up to 88% savings compared to retail rates)
• Real-time inventory updates across all sales channels
• Support for local delivery and in-store pickup options
• Smart order routing to reduce shipping costs
• Ability to manage up to 1,000 fulfillment locations
• Returns and exchanges management solutions

One success story is Snarky Tea, a business that transformed their fulfillment operations using Shopify’s built-in OMS.

Snarky Tea, founded by Jenni-Lyn Williams, grew from a small business into a direct-to-consumer company with hundreds of products. With rapid growth and publicity from Vogue, the Oscars, and Shark Tank, the company faced challenges managing inventory, fulfillment, and shipping efficiently.

By integrating Shopify's order management solution, Snarky Tea achieved:

• $25,000 monthly savings on shipping through discounted rates
• Accurate inventory tracking across production facilities and fulfillment centers
• Seamless order fulfillment using automated label printing and USPS manifests for pickups
• Fewer errors during batch printing, improving customer satisfaction
• 360 hours saved annually by reducing manual tasks and avoiding multisystem checks

Jenni-Lyn describes Shopify's OMS as a game-changer, saying, “The more I can do within Shopify’s ecosystem, the better. It saves us from unnecessary headaches and helps us stay organized.”

Pricing: OMS is included in every Shopify plan.

ShipHero

ShipHero is another order management solution for growing ecommerce brands. Built in the cloud, this platform is designed to help businesses more easily manage their inventory, streamline fulfillment processes, cut down on errors, and boost their overall operational efficiency. 

It’s also known for its user-friendly interface, which allows ecommerce businesses of any size to easily customize workflows to their unique needs. Plus, ShipHero offers a robust suite of tools for managing multiple sales channels, optimizing order routing, and automating tasks—freeing up time and resources for businesses to spend on other projects.

ChannelApe IOMS

ChannelApe IOMS is a powerful platform for strategic inventory operations, helping businesses unite their sales, fulfillment, finance, and customer service.

It’s touted as a company’s “mission control for operations,” and offers a streamlined approach with helpful dashboards to consolidate metrics in real time for a comprehensive look at how a business is performing. 

Specifically, ChannelApe can offer better visibility into your supply chain, which can help scale operations and reduce mistakes. Plus, companies can tap into advanced tools for inventory and order management, including rules governing holds, routing, edits, fraud, and more.

17Track

17Track is an order management system built for Shopify. It offers an all-in-one tracking system to monitor orders throughout the entire order lifecycle—complete with customer-facing views to prevent “Where’s my order?” support tickets.

Plus, with 17Track, you can build a self-service returns portal. Divert customers here and apply return automation rules to ease the burden of reverse logistics.

The benefits of a good OMS

A good OMS offers several key advantages:

• Improve order accuracy. An OMSautomates order processing, reducing human errors that can lead to shipping mistakes and costly returns.
• Pick, pack, and ship faster. An OMSidentifies the best fulfillment center with available inventory, streamlining the process for quicker delivery times.
• Reduce shipping costs. A good OMS integrates with top carriers globally, offering prenegotiated discounted rates and simplifying label printing.
• Centralize channel management. An OMS can consolidate orders from all channels into one dashboard, minimizing missed or duplicate orders and improving customer service response times.
• Meet customer expectations. An OMS provides built-in tracking pages for order updates, enhancing transparency and reducing negative reviews that result from poor communication.
• Prevent stockouts and forecast inventory. An OMSoffers comprehensive data on sales trends and popular products, enabling accurate inventory forecasting to avoid overstocking or stockouts.

Challenges of an OMS

Despite all of its advantages, an order management system also can have its drawbacks. 

Here are three common problems retailers face:

• Integration: Complex integration with legacy systems can lead to unsynchronized data and shipping delays that result in dissatisfied customers. 
• Scalability: Basic systems may not support business growth, requiring more robust solutions for increased order volumes and international transactions.
• Customization: Adapting to specific business processes can be difficult, potentially hindering efficiency. For example, bespoke furniture manufacturers may struggle with a centralized system ill-equipped for complex custom orders.

💡Tip: Shopify is the only platform to unify POS and ecommerce in the same infrastructure. With Shopify as the sole command center for your entire omnichannel business, there’s no need for patchy middleware or custom integrations that inflate total cost of ownership (TCO). 

“The biggest money and time-saver here is the back-and-forth we used to have with the customer support team based on orders that didn't sync with [our previous solution],” says Simon Paquin, director of digital marketing at Pilgrim. “It created a lot of friction, meaning delaying the work to get done, and therefore shipping fewer orders every day. With Shopify, we're making more money per hour with less friction.”

How to choose an OMS

There are a lot of factors that you should consider when choosing an order management system, both in terms of the workflows it can automate and the existing platforms it integrates with.

Here’s a step-by-step process for choosing the right order management system, including the features to look for in the platforms that make your shortlist.

1. Define your objectives and priorities

Much like an investment in any new type of software, the first stage of finding a retail OMS is to understand what you need it for. 

Hold a meeting with your internal stakeholders to understand features that are absolute requirements versus the “nice-to-haves.” Throughout these conversations, don’t forget to factor in scalability and future thinking. Your plans to scale the business play an important role in your decision-making. Ideally, you want an OMS that will grow as your business does. 

2. Draft a request for proposal (RFP)

Order management solution vendors will submit proposals that help you make your choice. The goal of each proposal is to get you and the vendor on the same page in terms of the technical requirements and limitations of the system you’re hoping to implement. 

Your RFP should list specific details on how you expect the OMS to function. Provide vendors with the following information so they can tailor-make the proposal for your business:

• Order volumes
• Number of SKUs
• Any existing software or hardware you use
• A timeline for the systems acquisition process
• Details on training and enablement

Learn more: Free Ecommerce RFP Template + Top Migration Questions

3. Evaluate your options

It’s unlikely that you’ll find the perfect fit for your business with your first contact—so compile a list of four to six potential vendors to evaluate. Reach out to each supplier to arrange a demo or trial of their product. 

Through this process, run each OMS vendor through the following checklist to help you make the right decision:

• Does their OMS allow you to eliminate manual processes—like creating purchase orders—through workflow automation?
• Does it allow you to manage sales across multiple channels, currencies, and geographies?
• Does it support multiple warehouse locations?
• Does it provide real-time inventory updates?
• Does it provide reporting and forecasting that allows you to better identify problems and anticipate change?
• Does it provide access to an API that will allow you to innovate at your own pace?
• Does it support native and third-party integrations into the broader supply chain ecosystem (i.e., accounting, warehouse management, fulfillment, 3PL, etc.)? 
• Is the platform stagnant or continually adding new feature functionality?

It’s unlikely you’ll find a vendor that is a perfect 100% fit. Your final selection will be based on a number of trade-off criteria. 

Feature and function alone shouldn’t be your only selection criteria, as you’ll want to take into account the entirety of the business relationship you’re getting into. Are the vendor’s teams helpful? Are they experts in their field? And are they continually evolving the platform to provide their customers with options for expansion and growth? 

The right OMS for your business ticks as many of those boxes as possible.

Find the right OMS for your business

Choosing a new OMS isn’t a decision to take lightly. The right one has the potential to save time, cut costs, and deliver better experiences to your customers—experiences that convince them to return time and time again.

Put together your shortlist, evaluate whether your options have the essential features your entire team needs, and ask vendors for guidance on implementing an OMS. 

It might take some time to get into the swing of things. But you’ll soon see the positive impact of storing all order-related data, automatically fulfilling orders, and providing customers with real-time shipping updates within one centralized platform.