If you've ever tried to order something online only to find it's “on backorder,” you’re not alone—and if you run a business, chances are you’ve had to deal with it from the other side too. Backorders occur when a product is already sold but temporarily out of stock, and they may sometimes be frustrating, but they are part of the business, especially when the demand exceeds the supply.
This guide simplifies all there is to know about backorders in a way that will enable you to understand the impact it has on your pricing and serviceability, as well as your advice on managing your customers and keeping your stock levels at bay. Whether you're trying to reduce lost sales or just want a smoother way to handle out-of-stock items, you'll find simple, practical advice to help you stay ahead.
Understanding What Backorder Means
Have you ever come across a product you really wanted to order, only to see the word backorder beside it? Well, there is no need to panic. Backorder simply means that the item is out of stock, but additional ones are coming soon. You will be able to purchase it today, though it will not be shipped until the store restocks.
Key points about backorders:
- You pay for the item now, but receive it after restocking.
- Orders with both in-stock and backordered items may be split into separate shipments.
- Backordered products cannot be shipped until they are physically in stock.
Backorders are a helpful way to make sure you don’t miss out on something popular. Instead of refreshing the page every day, waiting for it to be back in stock, you can lock in your order and wait for it to ship when it’s available.
Backorder Guide
Pricing for Order Fulfilment Requests
When making backorder requests, you should be aware of how the fulfilment pricing operates. The prices may be a bit higher than normal orders, and this is mainly attributed to different handling, packaging and shipping of inventory. Being on top of these differences helps protect your margins and keeps customers informed.
For instance:
- Handling fees typically run a couple of dollars higher, say $7 for a backorder versus $5 for a standard item.
- Shipping costs may rise slightly, perhaps from $10 to around $12.
- Packaging supplies also add up: think $4 instead of $3.
If you use a logistics partner like ShipWithMina, their AI-driven fulfilment and efficient inventory processing can help offset these added costs. Mina’s technology reduces picking mistakes and accelerates processing, saving you up to 30% on operational costs.
Their strategic warehousing and exclusive shipping routes also mean you benefit from lower shipping fees and faster turnaround, which is especially useful when handling backorders.
Difference Between Backorder and Stock Unavailability
When a product is on backorder, it means it’s temporarily sold out—but there’s good news: the seller knows when it will be restocked. You can still go ahead and place your order, and it’ll be shipped out as soon as the item is available again.
On the other hand, if a product is simply listed as out of stock, that usually means there's no clear idea of when (or even if) it’ll be restocked. You won’t get an estimated delivery timeline, which can make the wait uncertain—or endless.
Understanding the difference helps you decide whether it's worth waiting or if it's better to look for alternatives elsewhere.
What Causes Backorders?
1. Unexpected Spikes In Customer Demand
Having a product become viral or highlighted by a celeb, or simply becoming a trend overnight. Once that occurs, your standard inventory fails to cope. These demand surges may be social media hype, changing of the seasons, or even a new sales channel putting your product in front of more eyeballs than normal.
2. Insufficient Emergency Stock
Having a cushion of extra inventory—also called safety stock—helps you deal with surprises. But if that backup is too small, even regular orders can clear you out before the next shipment arrives. It’s all about striking the right balance between having enough stock on hand and not overstocking.
3. Supply Chain And Manufacturer Issues
When your supplier encounters a hitch, be it a raw material unavailability, factory downtime, or slow shipping, it slows everything. You might find yourself out of stock, even though demand has remained constant, because you might not be restocked in time.
4. Mistakes Made By Staff
We are all humans, and it happens. Perhaps the order was not ordered, something has been overlooked in stocktaking, or not put up on the site. Such minor miscalculations may result in the sale of more things than are available in the warehouse.
5. Inventory Tracking And Warehouse Errors
Occasionally, products are damaged, or lost within the warehouse, or even, expire without anyone realizing. Your tracking system does not pick it up, and you end up having an inventory to fulfill when you have none, causing backorders.
6. Extended Delivery Times From Suppliers
Some suppliers simply take longer, whether you place the order on time or not. They may deliver slowly or unpredictably, so you may go through your safety stock without the next batch arriving. The gap means you have no choice but to backorder.
Advantages of Selling Products on Backorder
1. Increased Available Storage
When you sell products on backorder, you do not need to keep huge quantities of that stock. This implies that your warehouse shelves are free, and you are able to stock other fast moving products in more quantities. It can help to avoid additional shortages and assist in space efficiency.
2. Lower Storage Expenses
Keeping a smaller number of products in the warehouse can also lower your warehousing expenses temporarily. You may save on storage and fulfilment costs because it does not have to store as much inventory per day. This monetary reprieve can extend until new inventory comes.
3. Enhanced Customer Interest
Backordered status may suggest to consumers that the products are very popular. This kind of perception usually heightens the desires of customers to buy, stimulating demand going forward despite the temporary shortages of the product.
4. Better Cash Availability
Allowing payment of backordered products means you get money up front. This enhances your cash flow and frees up money otherwise spent on unsold stocks. It provides additional capital that your business can use to invest in other things or pay operational expenses.
Drawbacks Of Offering Products On Backorder
1. Missed Sales Opportunities
Not all customers will opt to purchase an item when they find it not easily accessible. Many customers tend to change sides and go to their competitors instead of waiting because fast delivery is a promised standard. This action can actually lower your direct revenue.
2. Customer Dissatisfaction And Loss
Repetitive backorders may be frustrating to your buyers, and they may decide not to visit your store at all. By losing such customers, you lose not only present sales but also future business. They cost extra effort and expense to replenish or rebuild.
3. Greater Operational Demands
Backorders need additional work. When your stock branches out, you may take more time updating customers, accelerating supplier deliveries, or addressing emergency deliveries. These activities may add to your operating expenses and stretch your resources.
Tips For Minimizing Backorders
1. Maintain Buffer Inventory
Always maintain a buffer supply of stock as an expected contingency against unforeseen demand peaks or supplier delays. This buffer is a cushion that minimizes the chances of understocked products before incoming stocks. When levels run low close to this buffer, use real-time inventory tracking to understand the moment.
2. Determine And Apply Reorder Thresholds
Consider your reorder point as the point at which your merchandise makes a slight shove at you and tells you to restock. You calculate it by combining two factors: the quantity of stock you normally sell over a period of time, whilst waiting on the arrival of a delivery, and a little cushion to hopefully cover you in the unlikely event that everything does not play out as we’d desire it.
For example, if you tend to sell 100 units while waiting for your supplier to deliver, and you want to play it safe with a 20-unit backup, your reorder point would be 120. When your inventory hits that number, it’s your signal to order more—before you run out.
It is not a set it and forget kind of thing. Monitor it (especially during sales or trading seasons). Your reorder point should be in line with what is actually going on in your shop, not what worked a couple of months ago.
3. Monitor Stock Levels Of Fast-Moving Products
Review inventory regularly, particularly the best-selling items. They are fast-moving items and are likely to be out of stock. Frequent checks ensure you take prompt action on replenishment so that you do not run short of popular SKUs.
4. Use Multiple Sourcing Options
Review inventory regularly, particularly the sell best items. They are fast-moving items and are likely to be out of stock. Frequent checks ensure you take prompt action on replenishment so that you do not run short of popular SKUs.
5. Order Adequate Quantities Without Overstocking
When placing orders, it’s all about finding that sweet spot: enough stock to keep things running smoothly, but not so much that you’re drowning in boxes or locking up money you might need elsewhere. Big orders can help prevent backorders, but they also take up space and cost more to store.
Take a moment to calculate how much it costs to hold inventory. That’ll help you decide how much to order each time without overdoing it.
Getting this balance right can really improve your inventory management and help you avoid those dreaded “out of stock” moments that can mess with your sales.
Don’t Lose Your Customers Due To Backorders
1. Inform Them Promptly
If something’s out of stock, let people know right away. No one likes getting to checkout only to realize the item they wanted isn’t available. Add a clear note on the product page with the expected restock date so shoppers know what to expect upfront.
2. Provide Realistic Delivery Timelines
If an item’s on backorder, don’t sugarcoat the wait. Give a realistic delivery timeline—people appreciate honesty, and they’re more likely to stick around if they know exactly when their order will arrive.
3. Create A Waitlist For Notifications
Let customers drop their email to get a heads-up when the item’s back. It’s a simple way to keep them interested, and hinting at limited stock can actually make them want it more.
4. Notify Immediately When Stocked
As soon as the item is restocked, send out a quick email to everyone on the list. Start with any pending orders, then reach out to the rest with a clear, friendly message that gets them excited to buy. It’s a good way to rebuild momentum and show you’re reliable.
Eliminate Backorders with Support from ShipwithMina
Tracking your inventory doesn’t have to be a guessing game. With ShipwithMina, you get real-time updates that show what’s in stock, what’s running low, and when it’s time to restock—so you're always a step ahead. By using insights from your sales and order history, you can spot fast-moving products and make better decisions before items sell out.
And when inventory does run low? We act fast. As soon as your new stock arrives, we help you clear backorders and get shipments moving quickly, keeping customers satisfied and your business running smoothly.
Key benefits:
- Real-time inventory visibility
- Automated alerts for low-stock items
- Data-backed restock planning
- Fast order fulfillment once inventory is replenished
Backorder FAQs
What is a Partial Backorder?
This is referred to as a partial backorder when some of your items are not available. You have an option to have the merchandise supplied immediately and await the rest or you may wait to receive all at once.
What Does a Rolling Backorder Mean?
A rolling backorder is simply a backorder with no delivery date. It applies a flexible time margin, enabling companies to manipulate shipments as inventory is available.
How Long Do Backorders Usually Take?
Backorder times may also be variable, although normally they usually take a period of two weeks. The time will differ depending on the supplier and the particular order.
