There is a hypothetical scenario that you have experienced a backorder. If you don’t understand what that means, then this might make it easier. Imagine a customer who visits your websites and decides to buy a particular item. He searched for the item with so much excitement and eagerness and added it to its cart, hoping he has gotten what he wanted. It was his last destination to acquire that product.
However, after checking the expected date his order will arrive, he receives an alert, “We are sorry. Currently, the order is on backorder. We will notify you once we get it in our inventory.” Suddenly, all the expectation has turned to disappointment and anger towards your store. It is frustrating to find yourself in such a situation. How long does a backorder take? What can a store online do to minimize backorder?
In eCommerce, a backorder is when an item ordered isn’t available in the inventory but will be made available at a future date. The problem with backordering products is the fact that it brings about delay. The customer has to wait until the date specified in the shipping date to receive the item. Most customers are unwilling to wait for a backorder, which might be a loss for the business owner to his competitors.
Furthermore, a backorder is quite different from an out-of-stock order. Both terms refer to the shortage of an item, but there is a distinct difference. While a backorder relates to an item that is currently unavailable but can be delivered at a particular time, an out-of-stock order means the item isn’t available and might never be listed in a store.
How to reduce backorders
No eCommerce store owner wants to experience a backorder situation consistently. Therefore, to reduce backorders, there are several things you can do to minimize the shortage of items and handle it peradventure they happen in the future.
Have an estimate of demand using past purchases
The first thing to do is to get an estimate of what your customers purchase in a particular period to reduce backorders. For instance, if you sell sweaters, and you observe that during the fall and winter, customers order over 120 pieces.
You can use this information to restock your store during this period. You can double the number of sweaters you purchase to accommodate more customers during this period. In this way, you will always have enough items in your store to meet your customers’ needs.
Work with manufacturers or suppliers
If you face an unexpected increase in demand for an item or ran into shortage, you can work hand-in-hand with the manufacturer or supplier of the product to know when the item will be available. If you know the exact date an item will be restocked; you can help manage your customer’s expectations. Good supplier relationship management will help you greatly in meeting requirements.
Diversify your manufacturer or suppliers
At times, backorder occurs when you depend on a particular supplier or manufacturer. To minimize the risk of running into frequent back order situations, you can have multiple suppliers or manufacturers working together. In this way, once a particular supplier doesn’t have the product, you can switch to the other. With this, nothing can disrupt your supply chain as you always have products to meet the demands.