What Is Order and Inventory Management?

Order and inventory management is the practice of managing product inventory and orders alongside product data.

Inventory management is a necessary component of third-party and direct selling, alongside managing core product information and syndicating to each channel. Order management is critical for direct fulfillment operations and keeping inventory levels accurate across multiple channels.

Order and inventory management software gives brands a centralized platform for processing ecommerce orders and managing inventory.

Having efficient operations set up to manage inventory and orders gives brands the necessary agility to choose 3P over first-party (1P) on big-name retailers like Amazon Marketplace. This is often a winning strategy for brands, as they’re able to retain greater control over their product assortment, inventory levels, and pricing. It also helps brands experiment on other growing marketplace channels, including social commerce and owned ecommerce sites.

A key capability of any order and inventory management solution is taking order data from different channels and consolidating it. Having unified order data in a standardized format helps brands process, fulfill, and analyze orders at scale.

Likewise, an order and inventory management solution needs the ability to understand current inventory counts and allocate across selling channels to maximize sales and avoid overselling.

In a world of distributed, multichannel ecommerce — where brands have to take on more of the fulfillment operations to successfully sell direct — order and inventory management solutions provide the tools to do so.

DTC channels are already major players in the ecommerce landscape, and their share of the market is only growing. According to eMarketer, U.S. marketplace ecommerce sales grew by 16.7% in 2021. Meanwhile, U.S. digital DTC sales were projected to grow 15.9%, while U.S. social ecommerce sales were projected to grow 35.8%.

To win on the digital shelf, brands need to have high-quality product content, consistently available inventory, and efficient order management. Additionally, they need a streamlined way to connect with multiple channels and keep up with changing demands. However, most organizations’ existing technical capabilities can’t meet these needs.

In many cases, brands will start by building manual processes for their initial forays into marketplaces and DTC selling. As they grow their efforts and expand to other channels, however, these processes can become chaotic and tedious. Inventory management may grow inefficient, and visibility into and analysis of orders may become severely limited.

Rather than introducing standalone solutions as individual needs arise, brands need a system of record that can synchronize products, inventory, and orders across the entirety of their omnichannel environment.

That’s what a modern order and inventory management solution does. It helps brands connect to different marketplaces in a synchronized way, often with pre-built direct connections to the largest channels. Having a central platform for processing order data and monitoring inventory optimizes direct selling efforts — while freeing up resources so brands can do more to innovate on the digital shelf.

Ask yourself the following questions:

1. Are you currently selling or interested in selling 3P on leading marketplaces like Amazon, Walmart, Target Plus, or eBay?
2. Are you currently selling or interested in selling DTC on your brand-owned ecommerce site?
3. Do you want more control over your assortment and pricing by selling 3P on popular retail sites?
4. Is your current process inefficient for marketing, IT, operations, and customer service to work together to launch a new channel?
5. Have you ever struggled with overselling on a particular site because you didn’t have enough inventory?
6. Would you benefit from a centralized dashboard to review orders from across sites?

Order and inventory management can help brands grow their 3P and other DTC initiatives at a faster, more efficient pace. This can help them reach more customers, better satisfy those customers with faster and more accurate order delivery, and, ultimately, lead to higher sales.

The core benefits of order and inventory management software are:

• Having one centralized platform for managing products, inventory, and orders;
• Keeping inventory accurate and up to date; and
• Managing orders and tracking sales performance.

A Centralized Platform for Order and Inventory Management

With a single system of record, content is optimized for each channel and validated for readiness before publishing, and inventory feeds are managed alongside product content.

Direct sales orders can come from several disparate channels. It takes too much time to process them manually — or to process them with a collection of pasted-together solutions that aren’t tailored to the purpose.

With a centralized platform, all orders are routed through the same system, standardized in that system, and then sent to the back office for fulfillment before shipping details are shared with the end consumer through the particular marketplace channel.

Expanding to marketplaces and DTC channels has proven to be lucrative for brands, but the process of setting up custom integrations to these channels can be complicated and costly.

Order and inventory management software often integrates with the leading direct selling destinations out of the box. This single point of integration provides brands with the necessary agility to experiment on new sales channels quickly and efficiently without burdening the IT team.

Accurate and Up-to-Date Inventory

With the rapid pace of direct selling channels, keeping inventory accurate and up to date can be challenging. Between an item running out of stock or unintentionally overselling a product, there are multiple frustration points for consumers.

An inventory management solution can help orchestrate inventory allocation to optimize top-performing channels and avoid over-selling with near-real-time inventory updates.

Tracking Orders and Sales Performance

For most brands, it’s difficult to obtain reports across direct sales channels — and even more difficult to draw actionable insights from these reports.

Order and inventory management software can give brands a clearer view of overall sales performance. Overlaying this view with other brand activities also helps brands draw conclusions about how to improve their inventory strategy to optimize logistics and drive more sales.

If you’ve reached the conclusion that your DTC and 3P efforts require a better way to manage inventory and orders, the next step is to select the right solution.

There are several factors that contribute to choosing the best order and inventory management solution for your brand. Here are some best practices to follow during the process.

Step 1. Understand Your Business’s Needs

Applicable when selecting any business software, the first step is to understand what your brand needs from an order and inventory solution. 

Ask yourself questions like:

• What channels are you currently using to sell directly to the consumer? Consider where you’re currently selling and what would need to be done to make those channels better investments for you. This can help you narrow your focus to solutions that are most useful for your priority channels.
• Do you intend to scale? Most ecommerce leaders have hopes of scaling to more DTC channels in the future. If you do, be sure to select a solution that can scale with you.
• What role does your product information management (PIM) tool play? Being able to connect inventory and orders to your PIM can do a lot to streamline ecommerce workflows and sync product content with inventory data. If you have or would like to implement a centralized PIM, consider searching for an inventory management solution that is tightly integrated with that PIM.
• What goals and key performance indicators (KPIs) do you hope to achieve with this solution? The right solution is ultimately the one that will best help you achieve your goals. Determine the pain points you need to solve — and the goals you hope to achieve.

Some potential goals for order and inventory management could include:

• Quicker deployments to a broader range of marketplaces and DTC channels;
• Expansion to different channels, such as social media; 
• Accurate and up-to-date inventory allocated across multiple channels;
• More streamlined order management processes; and
• Actionable insights into sales data and inventory.

KPIs for a successful order and inventory management implementation may be:

• Increased sales from marketplaces and DTC sites;
• Fewer stockouts;
• Faster order fulfillment; and
• Reduced customer service issues.

Step 2. Build a Business Case

After you’ve determined the pain points you need to solve and specific goals you hope to achieve with your order and inventory solution, it’s time to present that information to leadership in the form of a business case.

A business case should clearly detail:

• The existing problems an order and inventory management solution will solve;
• The potential business outcomes; and
• How resources will be allocated.

When creating your business case, try to include everyone who’ll be involved in its implementation, from ecommerce experts to members of the IT team. Ask what they would need from an order and inventory solution and the benefits they’re seeking.

Step 3. Understand What Makes a Successful Order and Inventory Management Solution

Once you’ve gained buy-in from leadership and colleagues, you can start looking at different options on the market.

Every brand’s needs are different, and the solution you choose will depend on a variety of factors. To get you started, though, here are some things to look for when choosing order and inventory management software.

Consider the following tips to determine whether the order and inventory management software is right for you.

The Solution Is Appropriate for Brand Manufacturers

Brand manufacturers have unique needs that often aren’t met by traditional enterprise resource planning (ERP) systems or standard order and inventory management solutions.

Software built with brand manufacturers in mind, however, is more likely to give you the flexibility you need for modern 3P or direct sales, as well as the ability to manage inventory and orders alongside your PIM.

Another important consideration: How are you going to best work with each individual marketplace? For example, consider prioritizing an inventory management solution that is tightly integrated with a solution for above- and below-the-fold content to create the highest-converting product pages.

The Solution Helps You Automatically Allocate Inventory

To succeed at direct selling, you need to avoid stockouts by assigning inventory to channels as needed in near-real-time. This is almost impossible with most traditional ERP systems.

A good order and inventory management solution should be able to meet this need by dynamically optimizing your top-performing sites to avoid stockouts. Automated inventory pools and safety stock can ensure that direct selling channels are always well-stocked so you don’t have to worry about overselling.

The Solution Unifies Order Management

One of the most essential jobs of an order and inventory management solution is to help you streamline order processing and fulfillment. Orders come in from multiple channels with all different formats, but your software should be able to synchronize all this data into something uniform and actionable.

Look for a solution that standardizes orders into a single view and automates processes so your back-office solutions can quickly fulfill them.

The Solution Integrates With Your Priority Direct Sales Channels

Many organizations connect their inventory to marketplaces and DTC channels via custom integrations, which can be complicated to build and difficult to scale.

However, the leading order and inventory management solutions offer integrations to the top direct sales channels. The right solution will be able to connect your products, inventory, and orders so you can get up and running on them quickly.

The Solution Provides Actionable Insights

Successful ecommerce initiatives are founded on the ability to constantly optimize the customer experience. Without insights into when and why orders are placed, however, you can’t take meaningful action on that front.

A good solution should give you full visibility into the brand activities that impact order volume so you can consistently improve.

The Solution Feeds Into Ecommerce Workflows

When using a series of cobbled-together solutions, mistakes can occur in internal processes. A great solution cuts down on these mistakes by connecting to your existing workflows, triggering specific events to happen, and notifying team members about the next steps.

The best way to ensure success in a process that involves multiple teams — like marketing, ecommerce, IT, customer service, and others — is to build workflows and processes that connect everything together and automate the busy work.

Step 4. Explore Vendors

With your priority features decided, you’re now ready to look at offerings from different vendors and examine how they might fit your needs.

If a solution looks promising, don’t hesitate to speak with sales reps and ask for a more technical sales engineer to answer detailed questions. 

In addition to questions about the solution’s overall capabilities, be sure to ask about:

• The connection to your PIM solution;
• What the user experience is like;
• How long it takes to onboard new users;
• How many channels the solution has direct connections to;
• Whether the solution has a future roadmap that includes new integrations and other features; and
• Whether the vendor can demonstrate proof of past success.

Step 5. Take Advantage of Demos

As you explore each solution, take note of:

• How intuitive the solution is to learn;
• How well it meets your specific needs and use cases; and
• How easy it would be to integrate it with your existing ERP system, PIM, and other relevant technologies.

Step 1: Connect the Solution to Existing Technologies

The first step is to make sure your new order and inventory management solution can communicate with existing solutions from which it will need to pull data.

This includes your PIM for product content and other back-office systems that manage inventory and fulfillment, such as an ERP, 3PL, or other shipping solutions.

This integration is critical to ensure an accurate view of inventory and a seamless way to exchange order and shipping details back to the marketplace or DTC channel.

Step 2: Test Technical Connections

As you connect the new solution to existing deployments, a lot of testing will need to be conducted by the IT department, finance department, and others to make sure orders can be processed accurately.

The consumer experience is critical to direct selling, so be sure you’re confident in how the systems talk to each other.

Step 3: Map to Priority Channels

Once you and your IT team are confident that the solution has been set up properly, you can begin configuring it to connect with your priority channels. In general, it’s a good idea to begin with channels that your solution has direct integrations with so you can enjoy quicker results.

Step 4: Publish and Scale

You’re now ready to deploy the solution to power your marketplace and DTC selling strategies. With each channel on which you go live, be sure to measure success and use learnings from the deployment to help you scale to more channels.

Step 5: Measure Results and Adjust Strategy

One of the most important benefits of an integrated direct selling solution is clear visibility into inventory counts and order performance. After all priority channels are deployed, use your new visibility to optimize and grow your marketplace and DTC operations.

Marketplaces and DTC selling have become essential strategies for brands that want to succeed on the digital shelf.

Today’s ecommerce landscape doesn’t allow for success on a single channel, or even a single type of channel. Rather, brands need to take advantage of all the ecommerce opportunities available to them — especially the increasingly lucrative direct sales channels.

To succeed in direct sales, you need seamless inventory allocation and order processing connected to your PIM. A purpose-built inventory and order management solution can help you achieve this feat.

With the help of order and inventory management software, you can focus less on the details of direct selling and more on building connections with your consumers and optimizing new paths to market.