If you’ve ever visited an online store and seen back order or out of stock items, you’ve probably wondered what they mean. While both mean limited product availability, they’re not the same. Understanding the difference can save you from surprises at checkout.
In this guide, Priority Fulfillment explains backorders—including why backorders happen, how they affect inventory management, and how shoppers and ecommerce businesses can navigate them.
What Is a Back Order?
A back order means a product is temporarily unavailable but can be purchased for future delivery. In this case, the item isn’t ready for immediate shipment, but the retailer expects to ship it once restocked.
Backorder Facts:
- Can Order: You can place a sales order and get in line for future delivery.
- Estimated Delivery Date: Most retailers provide a projected shipping date.
- Inventory Reserved: Your order reserves priority once the product is back in stock.
- Continuous Sales: Retailers accept backorders to prevent lost sales during shortages.
Back Order vs. Out of Stock Items
The biggest difference between a back order and an out of stock item is whether or not you can order during the stockout.
- Can You Order It?
Yes for back orders—you can order and reserve the item for future delivery. No for out of stock items—you can’t order until it’s restocked. - Estimated Delivery Date:
Back orders usually have an estimated delivery date so you know when to expect your order. Out of stock items rarely have this info. - Product Status:
Back orders mean the product is temporarily unavailable but will be available again soon. Out of stock means the product is not available at all. - Impact on Sales:
Back orders allow retailers to continue taking orders. Out of stock items pause sales until inventory is replenished.
So, backordered items are available to purchase with a wait, while out of stock items can’t be purchased until they’re back in stock.
Why Backorders Happen
Several things cause backorders in the supply chain:
Demand Exceeds Supply: Unexpected customer demand or unusual demand.
Supply Chain Issues: Transportation, customs or production delays.
Production Delays: Factory slowdowns or labor shortages.
Low Safety Stock: Not enough safety stock to cover demand spikes.
Warehouse Management Discrepancies: Miscounts during stocking or order picking.
Backorders in the Supply Chain
Backorders affect the whole supply chain.
- Manufacturers: Increase production and manage additional purchase orders.
- Distributors: Adjust delivery schedules to prioritize backordered inventory.
- Retailers: Balance customer communication and manage reorder points.
- Customers: May wait longer for delivery or cancel orders.
Retailers also need to consider inventory carrying costs and storage space while waiting for shipments to fulfill backorders.
Backorders in Ecommerce Businesses
Here’s how backorders work in ecommerce businesses:
- Sales Order Placed: Customer places order as usual.
- Backorder Status Displayed: Online store shows expected delivery dates.
- Order Confirmation: Customer receives email confirmation of backordered items.
- Fulfillment Process: Once restocked, retailer fulfills backorder.
How Retailers Can Manage Backorders and Customer Satisfaction
Good inventory management minimizes backorders and keeps customer satisfaction high:
Communicate Clearly: Display back order status and estimated delivery dates.
Send Regular Updates: Keep customers informed with shipping updates.
Offer Alternatives: Suggest similar in stock items for immediate shipment.
Provide Easy Cancellation: Allow order modifications for unhappy customers.
Use Automated Alerts: Trigger alerts for low stock levels via your inventory management system.
Backorders and Shipping Times
Delays are common with backorders. Factors that contribute to longer wait times:
- Production Delays: Slow manufacturing.
- Supplier Performance: Poor performance from your main supplier or multiple suppliers.
- Supply Chain Disruptions: Weather, port congestion or customs delays.
- Partial Backorder: Some items ship now, others ship later.
How to Minimize Backorders
Here’s how to reduce backorders:
Forecast Demand: Use historical data and market trends.
Have Enough Safety Stock: Use safety stock to cover high demand items.
Work with Multiple Suppliers: Reduce risk with multiple suppliers.
Invest in Better Systems: Use advanced inventory management software with real-time data and predictive analytics.
Use Storage Space Wisely: Don’t hold excess inventory while keeping core stock items in stock.
Backorders: Good or Bad?
Backorders are good and bad:
Good:
- Capture sales during stockouts.
- Allow customers to reserve high demand items.
- Gather better demand data for future sales.
- Reduce pressure to hold excess stock.
Bad:
- Longer wait times can frustrate customers.
- Higher risk of order cancellations or bad reviews.
- Requires precise tracking to avoid overselling.
- Adds business complexity.
How to Manage Backorders for Happy Customers
To keep customers happy during backorders:
- Keep them informed about supply chain issues or delays.
- Be transparent about fulfillment challenges and future demand timelines.
- Offer discounts or incentives to patient customers.
- Suggest alternatives that are in stock.
Tips for Customers Before Placing a Back Order
If you’re considering a back order, remember:
- Estimated Delivery is Not Guaranteed: Be flexible—dates can change.
- Stay Informed: Monitor status updates or contact customer service.
- Know Your Options: You may be able to cancel or choose alternatives.
- Check for Incentives: Some retailers offer rewards for waiting.
Conclusion: Backorders are Manageable
Backorders are annoying, but they’re part of modern commerce. By improving inventory management, optimizing the supply chain and communicating with customers you can manage backorders.
At Priority Fulfillment, we help brands simplify backorder fulfillment, inventory management software and meet customer demand—even during supply chain disruptions.
