Backorder: A backorder is an order for a product or service that cannot be filled at the current time because the item is not in stock. The customer is willing to wait for the item to become available rather than cancelling the order.
Backorders are common in inventory management and order fulfillment. They occur when demand for a product exceeds the supplier’s current inventory. When an item is on backorder, it means the company has accepted orders for the product, but their supply of it has been exhausted.
Backorders can be a sign of strong demand, but they can also lead to customer dissatisfaction if not managed properly. Companies often communicate with customers about the expected wait time and offer them the option to remain on backorder, switch to a different product, or cancel the order.
For example, if a popular new book sells out quickly, a bookstore might put customers who still want to purchase the book on backorder. The customers will then receive the book when the next shipment arrives at the bookstore.
What does it mean when an item is on backorder?
When an item is on backorder, it means that the item is not currently in stock, but the company has accepted orders for it. The customer has chosen to wait for the item to become available rather than cancelling the order.
How does a company manage backorders?
Companies manage backorders by communicating with customers about the expected wait time and offering them the option to remain on backorder, switch to a different product, or cancel the order.
Are backorders good or bad for a business?
Backorders can be a sign of strong demand, which is positive. However, they can also lead to customer dissatisfaction if not managed properly, which can be negative for a business.
