It’s important to note that the terminology for open orders in online shopping is quite different from that of open orders in trading. However, they share a similarity: an order has been placed by a customer but has not yet been fulfilled. This means the product or service in question is still in the process of being delivered to the customer.
While this concept seems straightforward, there are a few things you should keep in mind regarding the open order system. Here’s more information!
What is an Open Order?
You’re probably familiar with the term “open order” when shopping online. Adapted into English, “open order” can be translated as “open order.”
Pragmatically, this term is commonly used to describe a seller who is ready to accept orders and process them immediately. The process includes verifying the order and buyer information, preparing the product, and arranging delivery to the customer’s address.
For example, some cake shops are accepting orders for Eid cake hampers. This means customers can order their chosen cakes, and the seller will immediately process your order and ship it to the designated address once it’s ready.
So, as long as the seller still displays the open order status, you can still order or purchase the product or service being offered.
Now, if an order has been fulfilled, the seller’s stock is depleted, or the customer cancels the order, the status will change to closed order. So, if you want to order again, you’ll have to wait for the seller to reopen orders.
Also Read: Order Management System: Real-Time Notifications for More Efficient Business Operations
Advantages of the Open Order System
Unlike the closed order concept, an open order system can be left open for a certain period of time, depending on market conditions and the seller’s strategy. Here are some of the advantages of an open order system.
1. Increase Product Availability
By implementing this system, online business owners have more flexibility in preparing product availability. They can record the number of incoming orders and then adjust their inventory to the required amount.
Even if the goods are available and ready to be shipped, this system can attract more potential buyers.
2. Manage Inventory Better
The open order system allows online businesses to have a realistic picture of demand for a particular product. By monitoring the quantity, sellers can better manage inventory and make decisions related to production or procurement. This method is quite effective in preventing stockouts or excess inventory.
3. Improve Planning and Time Management
Furthermore, the open order system can also help sellers manage their shipping schedules. This gives them sufficient time to prepare, package, and ship orders according to their planned schedule.
4. Increase Customer Satisfaction
Besides providing benefits to sellers, this system also gives customers the flexibility to choose the products they wish to purchase. In other words, the open order system helps customers secure their orders without worrying about stockouts. This is beneficial for maintaining and even improving customer satisfaction.
Also Read: The Importance of Creating Customer Satisfaction: It’s Time for MSMEs to Show Their Teeth
5. Reduce the Risk of Losing Sales
Often, customers will flee to other stores when they can’t find what they want. However, by implementing this system, potential customers interested in the product will be willing to wait longer as long as their order is secure. This method is also effective in reducing the risk of losing customers, isn’t it, Labamu Friends?
Open Order Risk
While this system offers various benefits as mentioned, it also carries risks that need to be considered. Therefore, you should check these before implementing it.
1. Risk of Unfulfilled Orders
One of the most significant risks of this system is the possibility of missed or unfulfilled orders, also known as partial fills, where only a portion of the order quantity can be shipped.
Even if you have managed your stock and prepared your orders carefully, this risk still exists.
2. Risk of Delayed Delivery
Under certain circumstances, demand may surge, exceeding production capacity and available resources. This can create the risk of delivery delays.
This can make customers disappointed because the goods they have to wait longer for or even the order is not sent on time.
3. Complexity of Inventory Management
Inventory issues are no exception. An open order system requires business owners to be able to navigate the complexities of inventory management. If necessary, a dedicated staff member should be responsible for managing it to prevent inventory management errors, shipping errors, or stockouts.
4. Purchase Uncertainty
Another risk sellers who implement this system face is the uncertainty of purchases, also known as ghosting. Potential buyers may have already placed an order, and you’ve already begun preparing it.
However, midway through the process, they suddenly change their orders or even disappear without a trace. Such cases can cause uncertainty in inventory management and business finances.
5. Managing Customer Expectations
Once you’ve established yourself using an open order system, you should diligently educate customers that it may take longer to prepare their orders. Communicate this from the start so customers can manage their expectations. This way, you won’t be bombarded with complaints about late delivery.
That’s the information about open orders and everything you need to know. While they have some drawbacks, if you can plan and manage inventory efficiently, you can minimize the problems mentioned above.
One way is to use the Labamu app. With this app, you can manage all your administrative and business transaction needs, including inventory and order management. What are you waiting for? Download the app now from Google Play or the App Store!
