What Is a Backorder?
A backorder is an order for a product or service that cannot be fulfilled immediately due to insufficient available inventory. While the item may not be currently in stock, it could still be in production or awaiting manufacture. Backorders indicate that customer demand exceeds current supply levels and may also be referred to as a company’s backlog.
Why is Backorder important?
Backorders play a critical role in retail and eCommerce by helping businesses maintain sales, improve customer satisfaction, and reduce missed opportunities. Instead of losing buyers due to stockouts, companies can secure future revenue and manage demand more effectively. However, poor handling of backorders may lead to frustration, longer waiting times, and negative customer experiences.
Example of Backorder
For instance, a popular sneaker model sells out during a holiday promotion. Rather than turning customers away, the retailer offers backorders, allowing shoppers to reserve the sneakers and receive them once restocked. This approach prevents revenue loss and reassures customers that their demand will be met.
How to Manage Backorders Effectively
Communication Excellence:
- Provide realistic delivery timeframes to customers
- Send regular status updates and notifications
- Maintain proactive communication about delays or changes
Operational Efficiency:
- Set time limits for backorder fulfillment (typically 30 days)
- Gather multiple backordered items before shipping
- Process refunds promptly if customers cancel
Strategic Planning:
- Implement real-time inventory tracking systems
- Develop backup supplier relationships
- Create automated alerts for low stock levels
Best Practices for Backorder Management
Proactive Communication:
- Notify customers immediately when items become backordered
- Provide specific estimated delivery dates, not vague timeframes
- Send weekly updates even when there’s no change in status
- Offer alternative products or expedited shipping when available
Customer-Centric Policies:
- Allow customers to cancel backorders without penalties
- Provide priority fulfillment for loyal or high-value customers
- Offer incentives (discounts, free shipping) for patience during delays
- Maintain detailed order history for future reference
Supply Chain Optimization:
- Diversify suppliers to reduce single-point-of-failure risks
- Negotiate priority agreements with key suppliers
- Implement safety stock levels based on historical demand patterns
- Use demand forecasting to anticipate potential backorder situations
Backorder vs. Out of Stock
| Backorder | Out of Stock |
| Item temporarily unavailable but expected to restock | Item unavailable with no confirmed restock date |
| Customers can place orders for future delivery | No orders accepted until inventory is replenished |
| Indicates high demand and planned restocking | May indicate discontinued or seasonal items |
| Orders remain active with estimated delivery dates | Customers must wait for availability announcements |
How ConnectPOS helps with Backorder
ConnectPOS makes managing backorders easier with real-time inventory updates, automated stock synchronization, and seamless integration across online and offline channels. Retailers can track unavailable products, notify customers about expected restock dates, and prevent overselling. With ConnectPOS, businesses transform backorders into opportunities to build trust and boost long-term sales. Start delivering a smooth backorder experience with ConnectPOS today.
