Most eCommerce businesses don’t give attention or importance to their supply chains. Significantly, the success of a business depends on how the supply chain performs. It means to make your business successful; you need to pay attention to your supply chain.
An optimized supply chain focuses on driving all backorders to zero.
However, what do you do when you find yourself experiencing backorders? What if it was a backlog? How do you overcome this minor setback to provide quality service to your customers?
The general rule is that the bigger your backlog, the better it is for your company. Nevertheless, having backorders isn’t something that is always good.
What is a backlog?
In eCommerce, a backlog represents the total number of orders a customer sent, which haven’t been shipped yet. Usually, it comprises many customers since many customers have given the orders for you to ship the product. For instance, a customer places an order for a particular item on January 24, requesting the order to be shipped on January 30. This order becomes part of your backlog from January 24 until January 29.
Backorders are orders that a company hasn’t supplied because the item isn’t available at the moment. For instance, if you don’t ship the order from our previous example on January 30, it automatically becomes a backorder. It will remain in your backorder pending when you ship the item to the customers. Interestingly, the order also remains in your backlog.
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Backlog vs. backorder
At times, people tend to confuse the two terms because of how similar they are. A backorder can also be a backlog. While many see backlog as something negative, it can be something good in terms of the supply chain because you are not putting your customer out since they already paid for the item.
Optimizing your supply chains can help customers get whatever they want and when they need it. In backorder, you don’t give customers what they want at that time as they have to wait pending when the item is available.
Furthermore, while backorder can be something good, it can also backfire. Perhaps, you think what is the big deal because you will eventually ship the order? Well, there is no assurance that your customers will have the patience to wait for the order. Most customers will cancel the order because it didn’t get to them when they needed it.
Therefore, backorder comes with the risk of losing your customers to competitors. Additionally, you start the chance of losing revenue for your store as it put off customers.
Whether you run a small or big eCommerce online store, there is a need to increase your supply chain because it means you can give the customer whatever they need. Furthermore, backorder and backlog are two important strategies that can add to your business revenue and sales. Notwithstanding, backorder comes with certain disadvantages, which include losing your customers to your competitors.