When ecommerce retailers start their businesses, many start small. Perhaps they sell on just one marketplace, or just have a website for their online store, making it easy for them to handle order fulfillment themselves.
But as time goes on and their businesses grow, they sell more and more products, have larger inventories, expand to other sales channels, and don’t have enough time in the day to get everything done.
When that happens, one solution is to invest in an order management system to lighten the load.
An order management system (OMS) allows business owners to continue to focus on business growth, rather than getting bogged down in daily tasks.
But how do you know how much you should invest in an order management system? That’s what we will answer in this post.
We will break down the estimated monthly cost for a full-featured OMS, covering the areas that may increase or decrease that cost. If you are just looking for the final estimation, you can skip to the "Total Cost" section near the end.
The industry has made it very difficult to know what you should be paying for a comprehensive order management system (I won't name names, but you know the ones).
Additionally, there are so many options for OMS solutions out there, that it’s difficult to even know what you really need!
Generally speaking, an OMS should have inventory, order fulfillment, and warehouse functions, at the bare minimum. If you need those functions for your business, then an OMS will help you.
Yes, some systems will have more features, or less features, or have the same features and be called something else. My advice is to stop thinking about labels, and start thinking about what it lets you do.
Factors Affecting Order Management System Pricing
First, it’s important to understand that there isn’t just a dollar amount that can be thrown out there to tell you exactly how much an OMS will cost. As with many complex questions, the most accurate answer is: it depends.
An order management system isn’t a one-size-fits-all product, but rather one that is tailored to your specific business, and there are many factors that will dictate what you pay.
Let’s look at some of the factors that may affect the pricing of order management software:
- Business Size and Sales Volume
- Package Level
- Implementation
- Custom Integrations
- Support
Business Size and Sales Volume
Typically, OMS providers will scale their pricing based on several aspects of your business, including:
- How many users you will have in the system
- What your shipping volume is (usually on a monthly basis)
- How many locations (warehouses, storefronts, etc.) you have
With more users, volume, and locations, you can expect to have a higher monthly fee.
Conversely, if you have fewer of these, you will likely see your cost go down.
Package Level
OMS providers often offer tiered packages that have an increasing number of features, exclusive features, or more transactions per month, for an increased monthly fee.
They'll have a variety of names, such as:
- Basic
- Pro
- Enterprise
- High Growth
- Premium
- Gold
These packages are clearly defined and make it easy for you to consider what you are getting for what you will be paying.
If you are looking for some of the more attractive and useful functions, you may only find them in the larger packages.
Occasionally, an OMS provider will have both scaling pricing and packages.
This makes finding a price very confusing and can change quickly if you add new staff, grow in volume, or need additional features. Keep an eye out for these, especially if your business is growing quickly.
Implementation
Implementation, on-boarding, or other customizations are additional factors that can increase the price you will pay for an OMS.
- Implementation: This usually involves features that larger businesses need that may have to be developed or created for the specific organization. This is usually offered at an enterprise level.
- On-boarding: Anytime you introduce a new system to your business, it’s important that your staff has comprehensive training using it. An OMS can be complicated, making on-boarding an attractive feature. However, it can significantly increase the price you pay for the OMS (thousands or tens of thousands of dollars), depending upon the number of employees you have, the complexity of the program, your inventory or order data, and the number of locations you operate.
- Customizations: An order management system often can be customized to fit a specific business. While this will make your daily operations easier, it can be costly because not every system is built to do this, and workarounds may have to be created.
Custom Integrations
In a perfect world, the OMS you choose will integrate with all your other systems. However, in reality, it might not (no surprise there).
When this happens, and your OMS provider will not be rolling out new integrations anytime soon, you will have to create your own or pay someone to create them for you.
The good news is, there are many custom software development companies whose sole service is doing this type of integration. The bad news is, the price may run into the four or five figure range.
Before choosing to create a custom integration, document the use cases, pros, and cons of it to understand and justify the cost.
Support
Just how much support you will get with your OMS is a very important consideration, and it varies by provider.
Many OMS providers will include support in the monthly package you choose, but that may not always be the case. You may get a specific number of hours or tickets allowed per month, with anything additional costing extra.
Other OMS providers may have tiered levels of support, much like the tiered package levels, where you receive more support based on an increased monthly cost.
Total Cost of an Order Management System
Now you understand the biggest factors that affect the price of the order management system you choose, but you still need to know what it’s going to cost you.
You’ll likely spend between $1,000 and $5,000 per month on a full-featured order management software.
That may seem like a pretty huge range, and it is. That’s because the real answer to what an OMS will cost is: it depends.
The factors we listed above can significantly increase or decrease what you will pay per month for an OMS and the range provided is simply meant as an estimation based on the average that businesses pay for the service.
If you find that the range is way out of your price range, then you may want to consider a more focused system like inventory management, shipping and fulfillment, or an OMS with fewer features.
If the range seems like an unrealistic bargain for your company, and doesn't contain all the features you require, then you likely need a full enterprise resource planning (ERP) solution, which will have the OMS functionality within it.
Final Thoughts on Order Management Software Costs
As you can see, implementing an order management system can be quite an investment, depending on the specifics of your business and the functionality that you need from the system.
But even so, it is an investment worth making.
With an OMS, scaling to meet the demand of your expanding business is easy – it will grow with you.
Not only will it allow you more time to focus on the more important aspects of your business, like its growth and bottom line, it will do so accurately and efficiently.
SkuNexus might be the right OMS for you, if you're looking for a software that provides an excellent base set of functions, with the ability to customize on top of it. Request a demo to see what SkuNexus can do for you!
