Backorder | Perils and Benefits

Having to manage ecommerce trading could get really tricky and difficult sometimes especially when it comes to handling very large orders. Consider a scenario where you just received a large order for a product you have very limited stock of, what do you do? Do you reject the order or offer to ship out only a fraction of it? This is where “Backorder” comes in play.

Backorder meaning comes in play when an order cannot be supplied or shipped out immediately for which the customer is ready to wait for some time. Simply put, backorder is a way of handling a customer’s demands in an out of stock situation. This is different from pre-order, which is the order for a new product that has not yet been made available for delivery.

Backorder helps you maintain your sales and keep your customers even when you run out of stock of the ordered products, it always saves the day, but it shouldn’t become a habit. If not properly handled backorders could result in the loss of customers especially when the wait time is too long, as customers are forced to look elsewhere for the product or get a substitute.

Consequences of Backorders

Generally people are not willing to wait a long while to get their orders delivered to them; backorders can damage your customer relationship as they begin to lose confidence in you. They may be willing to wait once that doesn’t mean they might do it again.

Backorder can lead to lower sales as customers are forced to look elsewhere for products as they become frustrated with company’s lack of product availability.

Tips on Handling Backorders

Here are some few tips to help you handle backorders and maintain a good relationship with your customers;

1) Ship out part of the order: In a situation where you have part of the order in stock, offer to ship out part of the order. This would mean an additional shipping cost but it assures the customer of getting his order completed in time.

2) Offer a consolation: You can offer consolations such as discounts or free shipping fee to the customers for making them wait for their order. This will help sustain the relationship and keep them from looking elsewhere for the product.

3) Great customer service: It is crucial you have constant communication with your customers. Keeping your customers posted on the progress of their order is an avenue of reassuring their confidence in you. It helps them know when to expect their items.

4) Evaluate your inventory: If backorders are experienced frequently it may be time to evaluate your inventory. Your historical data will help you know when to reorder before you run out of stock.

Conclusions

Backorder means allowing your customers order for items even if you are out of stock to these items. It can be a very powerful tool that promotes your business growth if properly managed. It enables you sustain sales and keep your customer base even when you don’t have what is needed at the moment. This helps you understands the customers pattern and helps stock accordingly.