Backorder is a term used in inventory management that refers to the ordering of goods or services that are not currently in stock. A backorder may be created when a customer orders a product that is out of stock or when a company anticipates future demand for a product and orders extra units in advance.
In either case, the backorder represents an open purchase order for goods or services.
Backorders can cause problems for businesses because it can be difficult to manage customer expectations when products are not readily available. In some cases, customers may cancel their orders if they are not willing to wait for the product to come back into stock.
In other cases, businesses may find it difficult to fill backorders in a timely manner, which can lead to customer frustration.
There are a few different ways to manage backorders. One option is to offer customers the option to wait for the product to come back into stock and ship when it becomes available. This option may work well for businesses that have products that go out of stock occasionally and that have loyal customers who are willing to wait for their order. Another option is to offer a substitute product that is similar to the one that is out of stock.
This option may be suitable for businesses that sell products that are easily replaced by other products. Finally, some businesses may choose to cancel backorders and refund customers. This option may be necessary in cases where it is not possible to fill an order in a timely manner or where the customer is not willing to wait for the product.
What Does “On Backorder” Mean?
When a customer places an order for a product that is out of stock, the order is placed on backorder. This means that the customer’s order will be filled as soon as the product comes back into stock. Backorders can cause problems for businesses because it can be difficult to manage customer expectations when products are not readily available.
