Introduction

Magento Open Source Ecommerce Platform is an important player in today’s Amazon vs. everyone ecommerce battlefield. With a large contingent of Magento developers, spread across thousands of companies, the pace and depth of product development is orders of magnitude higher than any merchant could muster on their own.

Magento focuses on the core platform capabilities, while an ecosystem of Magento certified software companies and individuals focus on building extensions and themes in categories like marketing, analytics, site optimization, SEO/SEM, customer support, accounting and finance, order and inventory management, warehouse management, and many other functions. This vibrant combination of extensions, themes and partners extend the Magento solution to do more, a lot more. Magento clients benefit handsomely by this distributed product development marketplace.

Order fulfillment and inventory management are two of the most critical back-office functions in ecommerce.  These two capabilities are at the core of customer satisfaction and profitability. Pulse Commerce, a cloud-based, Magento certified order and inventory management platform, has filled that gap, and has a deep native integration with Magento.

Continue reading to learn:

• Magento’s role as a software vendor in the ecommerce battlefield
• The Magento developer ecosystem
• Order & Inventory Management’s (OMS) role in growth, profitability and customer loyalty
• The advantages of deploying a certified Magento OMS Integration

Magento’s Role In the Ecommerce Battlefield

In the ecommerce war, there’s Amazon… and then there’s everyone else.  Among the top 50 ecommerce retailers, Amazon captured over 50% of all ecommerce revenue in 2016 —  530x more revenue than #50 and 6.5x more than Wal-Mart!

Magento Open Source (formerly Magento Community Edition) and Magento Commerce (formerly Magento Enterprise Edition) are important weapons in this ecommerce battlefield. Their open-source software democratizes ecommerce technology with a powerful platform, rich features, a virtually unlimited ability to customize, extend and scale. Including their cloud-based solutions, Magento Pro and Magento Starter, it powers over 250,000 ecommerce storefronts globally.

Magento Storefronts Live in a Vibrant Developer Ecosystem

Organizations running Magento Open Source Edition typically have the need and the resources to control all aspects of their ecommerce front-end user experience. At the same time, they have little motivation or business need to re-create the back-office. For example, you’d be hard pressed to find a $100mm retailer writing their own proprietary accounting software.

Magento, with its open source software licensing model, provides everyone else an ecommerce platform that that has an army of over 150,000 mercenary developers globally, continuously improving and adding new extensions to their already feature-rich platform. Magento enables everyone else to band together and create a better platform for all Magento users.

While front-end interfaces will likely evolve, and change in ways we cannot imagine, Magento’s certified partners, like Pulse Commerce are building and integrating best-of-breed back office tools that merchants have little need to customize. That accounting software, for example. Order and Inventory Management is another example.

At Pulse Commerce, we’ve found that companies without an enterprise order and inventory management platform can’t scale efficiently as they cross through the $10 to $20mm mark on their way to $500mm.

Why is a Distributed Order and Inventory Management Platform Needed a Growth and Scale?

Growth introduces new complexities that a light order management system can’t address.

• Additional sales channels (e.g. marketplaces) put pressure on fulfillment. Without a holistic, single view of all orders across all channels, it’s harder to track orders in danger of shipping late. Fulfillment centers are more likely to introduce errors or get backlogged.
• Additional vendors and SKUs, coupled with additional sales channels, often transform product information management from an afterthought into a bottleneck. Without automation, information must be added to multiple systems in myriads of formats.
• More fulfillment options make it harder to have real-time visibility into overall inventory and location-specific inventory. Without an up-to-the-minute view, more stockouts occur or more capital is tied up in overstock.
• Together, these growth complexities hamper customer support. As more channels and fulfillment options are added, CSRs may need better tools to streamline issue escalation processes. Also, without good technology support, CSRs may have to switch between multiple software applications to resolve customer questions and complaints.
• For merchants seeking to add omnichannel services, new capabilities are difficult to implement without a centralized real-time view of orders and inventory. For example, you can’t launch a buy online pickup in store (BOPIS) program because the ecommerce system has now way of ‘knowing’ the available inventory at any particular store.

The New Role of an Inventory Management and Order Fulfillment Platform

Core capabilities begin with a synchronized real-time view of all orders, inventory, customers, products and promotions across all sales channels and all fulfillment centers.

• Distributed Order Management begins with intelligent order routing, and ends with higher inventory turns, faster order turnaround, lower shipping costs, and higher customer satisfaction.
  • Routes orders to the fulfillment center with the most inventory to increase turns
  • Routes orders to the fulfillment center closest to the customer to save on shipping
  • Enables customers to buy an out of stock item on backorder. Or pre-order a new product before it’s available for sale
  • Increases efficiency with capabilities for order splitting, returns / reverse logistics, recurring subscription orders (e.g. a monthly recurring coffee order)
• Omnichannel fulfillment gives customers a seamless experience as they interact with your brand across multiple channels.
  • Omnichannel customers can buy online and pickup in store because your Magento platform has access to real-time store-level, sku-level inventory.
  • CSRs can resolve issues quickly, logging into one system to see what was purchased and where, and make suggestions such as, “you can exchange it at the local store on 123 Main Street for the blue shirt. We’ve already put it on hold for you there.”
  • For an ecommerce customer, an order for an item that’s out of stock in the fulfillment center can be routed to a store with the item on hand to ship from the store.
  • Multi-location shipping, drop-shipping and EDI integration, certified UPS, USPS and FedEx integration streamline fulfillment and vendor management
• Inventory Management is a key to profitability.Consider a company with $25mm in annual revenue, and a 40% cost of goods sold. If inventory turns are 5.0, then, on average, $2mm+ inventory is required. If inventory turns are 10.0, then only $1mm inventory is required, on average.  That’s $1mm (4% of revenue) in additional cash in the bank.
  • Real-time visibility of company-wide inventory powers Omnichannel capabilities.
  • With a real-time view of days of inventory, you can proactively reduce stockouts, reduce overstock and increase cash flow.
• Payments and Risk Management is your lifeblood. Delayed payments hurt cash flow, and fraudulent transactions increase chargebacks and distract your company from real customers.
  • An enterprise OMS performs fraud checks and streamlines PCI compliance and reporting
  • You’ll get paid for online store purchases faster, and have support for all leading payment options.
• Reporting and Analytics can change the trajectory of your business. Insights gained from drilling deep into your data (orders, inventory, customers, products, and promotions) helps identify opportunities as well as areas to fix. For example:
  • Sales and Order data at the company, channel, store, sku, and item levels – compared to prior period, prior year, and forecast.
  • Visibility into shipping costs, returns (by channel, store, product, fulfillment center)
  • Promotion ROI calculation
  • Exception reports, such as SKUS with less than 10 days of inventory in stock.

The Benefits of Deep, Certified Magento Integration

A cloud-based enterprise OMS, sitting outside the Magento technology stack, provides all the value we’ve outlined above, while also reducing the risk of having all your technology eggs in one basket.

Robust APIs and Certified Magento Integration:

• Enables your tech team to stay focused on the core ecommerce capabilities without having to manage back-office technology
• Reduces complexity in adding new marketplaces, sales channels, shippers, payment options and more
• Maintains a cloud data repository outside your ecommerce platform, reducing operational risk.
• Accelerates implementation and time to market.

Pulse Commerce’s Magento Certified Order and Inventory Management Platform brings all of the capabilities discussed in this post, and much more to Magento customers. We’re proud to be members of the everybody else community, helping mid-market merchants compete, win, and grow. Contact Sales today for a free demo or a no-obligation consultation

Written By:

Indy Pereira

Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.

Since BigCommerce’s 2009 launch, nearly 100,000 stores have earned over $8B through the platform. With BigCommerce running the ecommerce platform technology in the cloud with seamless upgrades, merchants can focus more on the areas they know best – merchandising, pricing, promotion, and product assortment management, to name a few.

This focus has fueled growth for thousands of online merchants. If you’re one of BigCommerce Enterprise’s success stories, you may find that operations that were in perfect sync while generating $5mm in annual revenue can’t keep up anymore as sales pass through the $10mm mark.

Two areas where growth hits operations hardest are also important drivers of your customer satisfaction and profitability:

1. Order fulfillment; and
2. Inventory management

Growth is hard work! And when your business is feeling growing pains, it can be hard to figure out exactly which processes need the most change to help your business scale.

5 Symptoms of Tired Order Fulfillment and Inventory Management Processes

Through our own work with BigCommerce and hundreds of other merchants, we’ve seen five common symptoms that inform that it’s time to upgrade order fulfillment and inventory management processes:

Symptom 1: Late shipments increase as new sales channels are added

• Fulfillment centers get bogged down with inbound orders from multiple sales channels.
• You don’t have a pulse on which orders are in danger of shipping late – with multiple systems you don’t have a single view of all orders.

Symptom 2: Slower time to market and higher returns

• As the product sku count increases, so does the amount of product information to manage.
• As you add more channels (e.g. online marketplaces), product information must be added to multiple systems in myriad of formats.

Symptom 3: More stock outs or capital tied up in overstock

Your order management system lacks real-time visibility into inventory – e.g. inbound, outbound and in-transit inventory – creating inefficiencies:

• Orders get routed to fulfillment centers or stores that are low on stock, instead of those that have excess inventory.
• Sometimes items appear to be out of stock, but are actually available through different fulfillment centers, drop-ship vendors or brick-and-mortar stores.

Symptom 4: Slower customer service with fewer delighted customers

• As you add channels and fulfillment centers, CSRs have to switch between multiple software applications and business processes to resolve customer questions and complaints. CSRs may also be overburdened by the sheer volume of inquiries or not have streamlined issue escalation processes that are needed at a larger volume company growth stage.

Symptom 5: Unable to offer true omnichannel experiences

• Buying online and returning to a store can a clunky process if your Point-of-Sale software doesn’t have access to the ecommerce orders.
• You may have excess inventory in stores, and you’d like to route ecommerce orders to ship-from-store – but your systems don’t support it yet.
• You may have difficulty managing a buy online, pick up in store (BOPIS) program because your online and store systems don’t communicate very well or in real-time.

4 Benefits of Adding an Order and Inventory Management Software to your BigCommerce Store

BigCommerce Enterprise Order and Inventory Management Software by Pulse Commerce eliminates these symptoms while enabling scalable growth.   

The OMS synchronizes data from your commerce systems, enabling automated business decisions with real-time data. Every order, all inventory, customer history, promotions and product information are centralized within the OMS – so you can process higher order volume across more sales channels and fulfillment options. Benefits include:

1. Better cash flow through higher inventory turns

You can track inventory turns and profitability by vendor, by Sku, or by category. And, you can drill down into this view by store, by channel, or zoom out at the company level.

You can also make smarter purchasing decisions – e.g. ordering items mid-season that you know will sell out before the next purchasing cycle.

2. Faster shipments and reduced costs via intelligent order routing

Deliver orders faster while cutting shipping costs by having the OMS select the order fulfillment center closest to the customer. Shipping costs can be reduced 10% to 20% using this strategy, while shaving a day or more off of delivery times.

Reduce overall cost of inventory by having the OMS route orders to optimize inventory – for example, fulfilling from the store or the fulfillment center with the highest days of inventory on hand.

3. Quicker onboarding of new vendors and products while minimizing errors

Your BigCommerce product information format requirements may be different from those of marketplaces and comparison shopping engines. Entering the same data multiple times in different formats wastes time and increases the error rate.

Pulse Commerce’s Order and Inventory Management for BigCommerce manages that for you. Enter the information once, and then simply map the product content to the various templates once.

4. Better customer support and faster issue resolution

Without an OMS, your CSRs may have to log into multiple systems to handle a simple inquiry. For example, logging in to BigCommerce and a POS to find a purchase record, then your inventory management system to ensure an item is in stock in the fulfillment center or a store and then an email program on when the new stock might be arriving to what locations.

A modern OMS like Pulse Commerce’s provides all of that information in one place, and empowers the CSR to resolve the issue without unwanted switching costs and delays.

Issues are resolved faster. Customers are happier, CSRs are happier, and your CFO is happier too.

You can get a better sense for the financial benefits of an OMS by reviewing our Order Management System ROI Calculator. And, it’s prudent to know that all order and inventory management software are not created equal. You can also gain insight into the pitfalls of a “light” OMS by reading The 9 Deadly Sins of a Light Order Management System.

To learn more about how an OMS can benefit BigCommerce merchants, contact Pulse Commerce Sales to schedule your personalized 1-on-1 demo. If you are a Shopify Plus or a Magento merchant, we have good news for you too.

Written By:

Indy Pereira

Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.

Shopify Plus Order and Inventory Management Software

The Shopify Plus retailer roster is full of inspiring stories of high growth merchants. While every merchant is using the same Shopify technology platform for their ecommerce storefront, their growth stories are all different. Different categories, different merchandising strategies, different marketing and pricing tactics.

As is the case for all other businesses, retailers have to adapt as they grow. Processes that work well at the $5mm annual revenue mark typically begin to break down as retailers approach doubling in size.

Following are the other common growth initiatives that can stretch fulfillment and inventory management processes within an organization – challenges that require a technology upgrade in order to scale.

Growth Initiative
Addition of new sales channels:
Marketplaces, Brick & mortar stores, Popup Stores

Challenges
Late Shipments and More Returns

• How will fulfillment centers manage inbound orders from multiple sales channels with varying service level requirements?
• How will marketing ensure that product information is consistent across channels, each with its own set of rigid format?

Growth Initiative
Addition of new warehouses and fulfillment centers

Challenges
More Stockouts or Capital Tied up in Overstock

• How will you intelligently route orders to the ideal fulfillment center? Which center has the most inventory? How to maximize the purchase and distribution of stock to maximize return on capital?
• How will you optimize inventory across multiple fulfillment centers? Can you automate this process?

Growth Initiative
Addition of new product categories and suppliers and products

Challenges
Slower Time to Market and Product Information Errors

• Will the old ways of onboarding suppliers and products scale?
• Are you going to take longer to add new products to all your sales channels?
• How will you forecast demand for products you haven’t previously sold? How will you decide how much inventory to purchase?

Growth Initiative
Sales and Volume Growth

Challenges
Slower Customer Service with Fewer First Contact Issue Resolutions

• How many systems must contact center reps log into in order to resolve customer questions?
• Can they view all orders, payments, promotions, pricing and past orders and returns history for the customer – across all channels and fulfillment centers — by logging into one system?
• How quickly can the Rep access all the vital info and is able to act with confidence to resolve the customer’s issue rather than escalate or have customer jump through phone trees?

Growth Initiative
Omnichannel Strategy

Challenges
Systems breakdown between Cross Channels and Data Inconsistency

• How will you enable customers to buy online and pickup/return in store?
• How will you ship from store with your current systems?
• How will CSRs handle multichannel customer requests?

Shopify Plus Inventory and Order Management Software by Pulse Commerce is purpose built to streamline each of these challenges, plus many others.

What is an Enterprise Order & Inventory Management Platform?

At it’s core, the platform keeps important data synchronized across commerce systems – ecommerce website, ERP, Accounting, CRM, Supplier Systems, etc. It maintains a real-time view of all orders, inventory, customers, products, pricing and promotions across all sales channels and fulfillment centers.

This real-time 360-degree view of the business, coupled with intelligent workflows, gives the order and inventory management system powerful capabilities that helps Shopify merchants grow with scale. The platform helps merchants:

• optimize inventory across fulfillment centers;
• orchestrate real-time, automated business decisions that ensure orders are fulfilled accurately and on time;
• synchronize vendor and product and pricing information across systems; and
• empower customer service representatives to resolve customer issues, regardless of the sales channel for the purchase

Following are just 4 ways you can benefit from adding the Pulse Commerce Order and Inventory Management Platform to your Shopify ecommerce operations:

1. Inventory Management and Optimization
Increase inventory turns by reducing stockouts and reducing overstocks. You’ll gain a real-time view of inventory across all websites, brick-and-mortar stores, warehouses (including Amazon FBA), and fulfillment centers. With that insight available to all of your systems, you can manage operations more efficiently.

• Allocate and track inventory across multiple locations.
• Track inventory turns and profitability by item, sku, or vendor to optimize purchasing.
• Use ‘Days of Stock’ reports to avoid stockouts.

2. Distributed Order Management with Intelligent Order Routing
Ship from the ideal fulfillment center to ship faster, ship cheaper, or increase inventory turns. With knowledge of inventory levels at every location, the Pulse Commerce Order Management System (OMS) for Shopify can send new orders to the optimal fulfillment center. And merchants can choose their criteria:

• Ship faster:
  • Sends order to the center closest to the customer.
  • Order splitting – The OMS can split an order between 2 or more fulfillment centers to speed up delivery time or to facilitate drop-ship fulfillment.
• Optimize inventory:
  • Send the order to the center least likely to run out of an item.
  • Ship from a store that is sitting on too much stock.

3. Product Information Management
Onboard new suppliers and products once, and easily synchronize your Shopify store with other systems. Imagine a streamlined onboarding process? Import a new product catalog without incident, edit product information in an intuitive interface, create sales, discounts, and special pricing using flexible pricing rules that accomodate various business objectives, and then syndicate the information to your Shopify ecommerce site, brick-and-mortar stores, and online marketplaces. What can be an error-prone distraction becomes a simple process. Better product information leads to higher conversions, and also cuts down on returns.

4. Customer Service
Give contact center team members access to a single view of all orders, customers, inventory, products and promotions. Give your contact center the tools they need to quickly handle Shopify order and return inquiries. End the days of logging in to an order system, a CRM, and an inventory management software to resolve a single issue. To illustrate, consider a customer purchases an item online, and realizes afterwards that it’s the wrong size. The customer calls the contact center to modify the order. With an OMS, the CSR logs into a single system. Then:

• The CSR can look up the order by customer name, by phone number or by order #
• The CSR can modify the order, after first ensuring that the item is available in inventory
• The CSR can even offer the customer to pick up the modified order at a local store

Without an OMS, the CSR might have to log into more than one order system just to find the order. Then the CSR has to log into a separate inventory system to ensure the item is in stock prior to modifying the order. And, the offer to pick up in a store is near-impossible to manage.

We’ve just scratched the surface of the benefits of a Shopify Plus Order & Inventory Management platform. To learn more about how an Enterprise OMS can benefit Shopify Plus merchants, contact Pulse Commerce Sales to schedule your personalized 1-on-1 demo.

You can get a better sense for the financial benefits of an OMS by reviewing our Order Management System ROI Calculator. And, it’s prudent to know that all order and inventory management software are not created equal. To learn more about the downside of a “light” OMS, read, The 9 Deadly Sins of a Light Order Management System.

Written By:

Indy Pereira

Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.