Backordering is a process that keeps your supply chain intact and helps the store meet customer demand. When you do not have a particular product in-store that is out of stock, that does not mean that the visitors cannot order them. All this is possible with backorders. In this article, we talk about backorder and how it can be helpful for the eCommerce store. Backordering is closely associated with inventory management and keeps your eCommerce store running with steady customer inflow. Backordering helps eCommerce stores cater to customers even though they do not possess the ordered item.
What Is Back Ordering?
Back ordering is ordering a product that is not currently in stock. The order is filled and shipped to the customer when the product becomes available. There are a few reasons why a company might choose to backorder a product. Maybe there was an unexpected increase in demand for the product, and the company didn't have enough inventory on hand to meet that demand. Or maybe there was a problem with the manufacturing process, and a new shipment of products won't be available until next month.
Regardless, back ordering can be frustrating for customers because it often means they must wait longer than expected for their order to arrive. Companies try to avoid back orders whenever possible, but sometimes it's unavoidable.
Why Is Back Ordering Important?
Backorder best practices ensure you can do business even though the items are not yet in stock. The method of back ordering helps increase demand for a particular product and enables you to improve the value of the product backordered. The practices help engage customers even if there is no product in stock. Backordering can be good if you meet the expected deadlines and provide the items to customers.
When an item is back-ordered, it will be delayed in transit and delivery of the item because it is not in stock with the supplier or the eCommerce store. However, the store has to convey to the customers that the item is in high demand and delays can be expected. Moreover, the eCommerce company should always keep the customers on track with the transit and expected delivery timelines to know they will receive the product. Transparency is key here. The product's value increases when you state that an item is in high demand because of back orders.
Related: Order Management System: The Secret To A Successful Business
The Effects Of Backordering On A Company's Operations
Backordering can have several effects on a company's operations, both positive and negative.
On the positive side, back orders signify that a company's products are in high demand. This can be a good indicator of future sales and can help to generate excitement around a company's products.
On the negative side, backorder can be disruptive to a company's operations. It can cause inventory shortages, leading to lost sales and frustrated customers. Backordering can also be costly, requiring a company to maintain a waiting list of customers and manage regular communication with them.
Overall, back order is a mixed bag for companies. While it can signify high demand for products, it can also be disruptive and costly to manage.
Related: What Does Order Processing Mean?
Strategies To Prevent Or Mitigate Backordering
Companies can use a few strategies to prevent or mitigate backordering.
One strategy is to keep close track of inventory levels and anticipate customer demand. This can help avoid situations where products sell out and must be back ordered.
Another strategy is to offer rainchecks or discounts to customers willing to wait for a back-ordered item. This can help to ease customer frustration and keep them loyal to the company.
Finally, companies can use backorder as an opportunity to upsell customers. For example, if a customer is back ordering a product that is out of stock, the company could offer them a similar product in stock.
By using one or more of these strategies, companies can help to prevent or mitigate backordering.
Tips And Reminders For Backordering
Now that you know what items back ordered mean, here are the things you should remember about backordering.
Learn more about customer buying patterns and wants: Before ordering an item, take some time to learn about buying habits and what they are looking for in a product. This way, you can ensure that you are back ordering the right items that customers want to purchase.
Communicate with customers: Once an order is placed, keep the lines of communication open with the customer. Let them know that their order has been placed on a waiting list, and provide them with regular updates on their order status.
Be transparent about expected wait times: Customers should have realistic expectations about how long they will have to wait for their backordered item. Be upfront about any potential delays so that customers can plan accordingly.
Consider offering alternatives: If an expected delay is lengthy, you may want to consider offering options to the customer. This could include showing a similar product in stock or providing a discount for their patience.
By following these tips, you can help make the back ordering process smoother and more efficient for you and your customers.
Managing backorders can be challenging for any business, but it's especially difficult for eCommerce businesses. In this blog post, we've explored the causes and effects of back ordering and offered tips on managing them effectively. We hope you found this information helpful! Please check out our website if you're looking for tools to help you manage your backorders. We build powerful tools that 3PLs use to compete and win new business.
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