Sometimes, events occur that prevent the warehouse from filling up as quickly as it needs to. One alternative to simply informing the customer that the product is sold out is to create a backorder, which means that the product will be shipped as soon as its available. In this article we will clarify the term backorder, to give you access to an additional tool which can contribute to increased sales.

What is a backorder?

Backorder is a type of customer order created when a complete order can’t be shipped. This often occurs as a result of one or several products temporarily being out of stock, but still in production. As long as the customer doesn’t choose to cancel, a part delivery is completed and the remaining product or products are sent at a later date. The purpose of backorders is that the company doesn’t lose any income or customers even if the delivery can’t be made immediately. From the customer perspective, it can be seen as an advantage because they have, after all, spent time on placing the order.

Also read: Demand management and Warehouse management.

When can backorders contribute to increased sales?

In order for the backorder solution to contribute to increased sales, several puzzle pieces need to fall into place. An even flow of incoming products requires continuous production and a tight team of suppliers and transporters. If that is not the case, and many weeks pass before the warehouse is filled up again, it’s better to find another solution which doesn’t risk disappointing the customers. One alternative is to, for example, give the customer the option to leave their e-mail address and for the company to contact them as soon as the product is available again.

Better customer communication with Portal Business

It’s never fun to have to inform a customer that a product is no longer readily available, and that the wait for a delivery can be longer than normal. During this time, it’s important that the customer doesn’t feel neglected or forgotten. This can be countered by creating personal notifications that are sent automatically with the latest updates on the delivery.

As a contracted PostNord client you have access to Portal Business – a platform which simplifies a number of work tasks for e-traders, including customer service. In Portal Business you get an overview of all deliveries and customer cases.

Click here to learn more.

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Frequently asked questions about backorders

What is a backorder?

A backorder is when a product is temporarily out of stock and the delivery is scheduled for a later date, separately from the rest of the order.

When should the company charge for a backorder?

If the product is only delayed by a few days, you can take the payment as usual, but remember to inform the customer of the new delivery time.

When should the customer be informed that the product is temporarily out of stock?

Make information about the warehouse status available directly in your web store, so that the customer avoids disappointment if the delivery takes longer than expected.