Order Management, Fulfillment & Processing Explained

Published on January 23, 2026 • 7 min read

By CLEARomni Editorial Team

Research shows that consumers expect simple and seamless processes for receiving the goods they purchase. The process should have multiple interactions that keep them informed of delivery progress. And this is how important a business furnishes its order management to avoid losing customers.

Order management manages the lifecycle of an order – starting when a customer places an order and ending once they receive their goods. It has all the information needed including order entry, inventory management, and fulfillment. An Order Management System (OMS) offers businesses real-time insight into their inventories and gives customers visibility into when their purchases will arrive.

What is Order Fulfillment?

Order fulfillment is all the steps a company takes between receiving a new order and placing that order into the customer's hands.

The Order Fulfillment Process

1. Customer places an order via online, in person, by email, or over the phone
2. Order is received and registered in the inventory system
3. Order confirmation notification is sent to the customer
4. Order request is sent to the warehouse, 3PL, or supplier
5. Warehouse worker locates and collects the ordered items
6. Order is packed and prepared for shipping
7. Order is shipped
8. Order shipping notification is sent to the customer
9. Order is delivered
10. Inventory is updated

Fulfillment Methods for Your Business

Upon receiving orders, businesses can choose from four fulfillment methods with the assistance of an OMS to offer those delivery options:

In-house Fulfillment

In-house fulfillment is usually the ideal low-cost option for home-based startups with small order volumes. Using its own staff to handle all fulfillment steps, from storing to shipping products at a company-owned location, the company will have full control of the order operation.

Key Benefits:

• Complete control over quality and customer experience
• Lower costs for small order volumes
• Flexibility to customize packaging and branding

However, after the company is further established and faces space limitations, hybrid or outsourced fulfillment becomes a better choice.

Outsourced Fulfillment

Shipping, storing, and order/refund processing are handled by a third-party logistics (3PL) provider. Companies tend to opt for this option when they have limited storage space or want to scale operations without significant infrastructure investment.

The entire fulfillment process from end-to-end, receiving inventory from manufacturers to delivering orders to end customers, is carried out by an external party.

Key Benefits:

• Saves manpower and storage facility costs
• Scalable to handle order fluctuations
• Access to professional logistics expertise and infrastructure

Dropshipping

Dropshipping can be understood as outsourcing the entire process where companies don't need to hold a single stock. This has greatly reduced business risk. They just need to purchase the item from a third-party supplier after the product order is confirmed.

The supplier, either a manufacturer or any company, will handle all orders and ship the goods to the customer. Startup or small e-commerce businesses often adapt this model as it offers a lower entry-level business opportunity by paying only for sold items.

Key Benefits:

• No inventory investment required
• Worry-free inventory management
• Low startup costs and reduced financial risk

Consideration: The downside is that delivery times can be longer, especially when manufacturers are far from the customer base location in different countries.

Hybrid Fulfillment

Companies using the hybrid model have a combination of two or more of the three models above. For example, a company may choose to handle order fulfillment of popular products internally but also outsource fulfillment during peak periods like holidays.

Large or expensive items can be drop-shipped directly from the manufacturer. Less frequently purchased items are often fulfilled through dropshipping so that companies don't need to hold stock for a long time.

Key Benefits:

• Great flexibility to optimize fulfillment based on product conditions
• Cost-effective for different product categories
• Ability to handle seasonal demand fluctuations

Fulfillment Method	Best For	Key Advantage
In-house	Startups, small volumes	Full control
Outsourced (3PL)	Scaling businesses	Cost savings, scalability
Dropshipping	Low-risk startups	No inventory needed
Hybrid	Growing businesses	Maximum flexibility

Choose the Right Fulfillment Strategy

Selecting the right fulfillment method depends on your business size, growth stage, product characteristics, and customer expectations. The key is to balance operational efficiency with customer satisfaction while keeping costs manageable.

With the right Order Management System, you can orchestrate multiple fulfillment methods seamlessly, offering customers the delivery options they want while maintaining control over operations and costs.

About CLEARomni

CLEARomni is a leading provider of order management solutions, helping e-commerce businesses streamline fulfillment operations, integrate multiple fulfillment methods, and deliver exceptional customer experiences across all channels.