What are backorders and when are backorders taken?

What are backorders?

Backorders are orders taken for products that have been released but are temporarily out of stock. These orders are referred to as “backorders” because they were previously in stock and will be available again soon but are currently out of stock due to high demand, inaccurate sales forecasting, or operational discrepancies.

When are backorders taken?

In general, retailers will list unavailable products as “out of stock” or “notify me when available” on their eCommerce site when they are unsure about the production time frame. However, it is a mistake to mark all out-of-stock products as backorder products, because customers will still expect a reasonable timeframe for delivery, and will become aggravated if they have to wait for months on end.

Generally, retailers decide to take backorders for “standard” products that are not seasonal, because they know that these products are already under production and they will receive inventory soon. For example, a plain white shirt could be considered a standard product for a fashion brand, as they will always sell this item, so they will always produce it.

In some cases, retailers may also take backorders for popular seasonal products. Such products are generally in high demand within a given timeframe and customers are willing to wait. If the full inventory of the seasonal product is sold out and it’s the end of the season, then merchandisers do not prefer to take backorders as they are not planning to produce additional inventory.

To learn more about backorder strategy and how taking backorders is different from taking pre-orders, this article can be helpful: Pre-Orders vs. Backorders: What’s The Difference?