In the world of ecommerce, managing inventory effectively is crucial for success. One term that often arises in discussions about inventory management is "backordered." If you've ever encountered this term and wondered what it means, you're not alone. In this article, we'll explore the concept of backorders, how they differ from out-of-stock items, their causes and consequences, and strategies for minimizing their impact on your business.
A backorder occurs when a customer places an order for a product that is out of stock. The seller accepts the order, but does not have enough inventory to fulfill it right away.
There are a few common reasons why backorders happen:
While both backorders and out-of-stock situations mean the product is currently unavailable, there are some key differences:
Backorders can frustrate customers who have to wait for their items. They also create extra work for sellers related to communication, order tracking, refunds, etc. If poorly managed, backorders can:
While backorders can't always be avoided, sellers can employ tactics to reduce their likelihood and mitigate issues when they do happen:
Though inconvenient, backorders also present opportunities for sellers to strengthen trust and loyalty by demonstrating commitment to customers. Tactful, empathetic communication and prompt resolution of issues can go a long way.
While eliminating backorders completely may not be feasible, sellers who approach them strategically and transparently can mitigate many downsides.
A backorder occurs when a customer orders a product that is out of stock. The seller accepts the order but does not have enough inventory to fulfill it immediately.
Common causes include unexpected spikes in demand, supply chain disruptions, inaccurate demand forecasting, production capacity issues, and quality problems.
Customers can still place orders for backordered items, which have an estimated restocking timeline. Out-of-stock items cannot be purchased and have no clear availability date.
Backorders can increase negative reviews, overwhelm customer service, and prompt customers to shop with competitors instead.
Strategies include closely tracking inventory, carrying safety stock, optimizing reorder points, collaborating with suppliers, and offering substitute products.
Empathetic, transparent communication and prompt issue resolution can strengthen customer trust and loyalty despite inconveniences.
Completely avoiding backorders may not be feasible, but a strategic, customer-focused approach can help sellers mitigate downsides.