Ecommerce Fulfilment Services

Backorder

backorder

A backorder happens when a customer orders a product, but it’s not in stock. The product is still sold, but sent later when it’s available.

Backorders happen for several reasons:

  1. High Demand: A product is more popular than expected.
  2. Supply Issues: Problems in getting materials or making the product.
  3. Unexpected Delays: Shipping or production delays.

How Do Backorders Affect Businesses?

For businesses, backorders can be good and bad:

  • Good: Shows high demand for a product.
  • Bad: Can lead to unhappy customers and extra work in managing orders.

How Do Backorders Affect Customers?

Customers might have to wait for their product. This can lead to disappointment. But, if the product is worth waiting for, customers might not mind.

If handled well, backorders can build trust. Customers appreciate honest communication and good service, even when there’s a delay.

Technology and Backorders

Good inventory management helps prevent backorders. By tracking stock levels, businesses can order more products before they run out.

Technology helps manage backorders better. Systems can:

  • Track stock levels.
  • Automatically update customers.
  • Suggest when to order more stock.

Strategies for Reducing Backorders

To reduce backorders:

  1. Better Forecasting: Predict sales to stock the right amount.
  2. Reliable Suppliers: Work with suppliers who deliver on time.
  3. Safety Stock: Keep extra stock for unexpected demand.

More Fulfilment Terms

A payment gateway is a technology used in e-commerce to authorise credit card or direct payment processing for online businesses and online retailers
Vendor Managed Inventory (VMI) is a supply chain practice where the inventory is managed by the supplier, rather than by the retailer.

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