Multichannel Order Management (MOMs) - Inventory Optimization Software

Multichannel Order Management (MOMs)


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Joannes Vermorel, February 2015

Multichannel Order Management solutions (MOMs) are B2B software intended for merchants with a primary focus on online commerce. MOMs address two key concerns. First, they consolidate orders across all channels into the same physical inventory. Second, when prices are changed, they dispatch the new prices across all channels. Some MOMs go beyond those basic needs and act as full commerce management solutions.

Business owners and supply chain managers frequently get back to us asking why Lokad does not natively support web stores like, say, Magento, Prestashop or Shopify. The blunt answer is: if you are asking this question, you are probably making an expensive mistake that will drag your business down. In this page, we shortly review the software ecosystem for commerce, and explain why supply chain should not be managed through a web store, but rather through dedicated solutions, colloquially known as “MOMs” – multichannel order management software systems.

Web store vs supply management

Designing good software is (almost) entirely a matter of focus. While it is perfectly possible to be good at a wide range of tasks within the same field, it is much more difficult to replicate a similar degree of performance over very diverse areas. The focus of a web store is to sell, not to supply.

The main priority of a web store is to act as a selling machine: this software has to do everything technologically possible to bring the maximum amount of visitors to your website and to convert the highest possible fraction of this traffic into clients. All other objectives are secondary.

Thus, if your business happens to run its supply chain through a web store, or some kind of extension module associated with a web store, then your supply chain is a second class citizen by design. However, let’s face it: if supply chain was not a second class citizen, the alternative would be worse, as it would mean that “selling” itself would be the second-class citizen of your business.

The world has changed: multichannel is the default

Your business needs to be able to sell across multiple channels. Even the most well-managed businesses do liquidate dead inventory on auction marketplaces once in a while. And even pure online players open a few brick and mortar stores once they reach a certain size.

As soon as your business starts selling across multiple channels, you need a solution that consolidates sales from all of your diverse sales channels. Your web store might include a few connectors tor popular marketplaces like Ebay or Amazon, but fundamentally your web store is just one of your channels, even it happens to be the most important one. From a supply chain perspective, trying to make mono-channel solution work for a multi-channel problem, is like trying to turn screws with a hammer. Again, it’s like that by design. You cannot ask a web store to give up on its No1 goal: to be an incredible selling machine for its own channel.

MOMs: multi-channel order management software systems

Fortunately, this shift towards multichannel has not gone unnoticed in the software industry, and a new type of software has emerged between 2005 and 2015. These solutions are colloquially referred as MOMs, multichannel order management software systems. Some brand themselves as commerce management or online inventory management, but fundamentally they all tackle the same challenges: consolidating and servicing orders from multiple sales channels.

Lokad has already integrated with the leaders in this market such as Brightpearl, Linnworks, TradeGecko or Unleashed. Thus, if your business is run through any of these MOMs, you can get started with Lokad in just a few clicks, as we entirely take care of the data synchronization.

However, we have no plan to integrate with the web stores themselves. Indeed, only the MOMs themselves are geared towards multi-channel consolidation. The MOMs will let you consolidate your Magento, Ebay, Amazon channels among many others; and they do a fantastic job at it because it is a first-class citizen challenge for them.

Our recommendation: get a MOM

If your online business is still running everything through its web store, then not only are you losing new market opportunities, but more importantly, all your inventory-related processes suffer from a less than adequate setup, which translates into low productivity and poor client service. Get a MOM, you will be doing your business a big favor.