Imagine you’re selling. In fact, imagine you’re selling a lot; your product is flying off the shelves so quickly that you can’t keep up with the demand. So what do you do? Stop selling? Disappoint customers, lose sales, and drive them into the arms of a competitor? No way. To prevent that from happening, you can use backorder.
A backorder allows your customers to shop your products even when you don’t have sufficient stock on hand. Sounds tricky? It isn’t. In fact, it’s really common in retail.
1. What is BackOrder?
In the retail context, a backorder is an order for a good that is temporarily unavailable to purchase at present due to a lack of inventory supply. Allowing an item to be backordered means shoppers can still buy the item and receive it at a future date. This gives retailers some time to prepare stocks.
When to use backorder?
- Unusual demand
When demand for an item or traffic to an online store is irregularly high, backorders are likely to occur. This can be due to seasonality, a television appearance having a celebrity post about your product to their massive following or even through an introduction of a new sales channel that increased visibility.
- Low safety stock
Safety stock is the excess number of products you keep on hand in case of an emergency or supply chain failure that causes less than average inventory to be available. If a product’s safety stock was not prepared, you may experience backorders due to insufficient stock levels.
- Manufacturer or supplier problem
If your manufacturer or supplier runs out of a material or is shut down for an extended period of time (e.g., for Chinese New Year), or cannot hit production goals in time, your store may need backorders.
Backorder an item means that shoppers can pay for the product now and receive it at a future date. This helps boost demand, retain and increase the customer base, and creates value for their products.
2. Why putting your products on BackOrder?
Demand’s off the charts, and your products have sold out! So now you’ve got two choices: Disappoint your customers and tell them that you’re out of stock, or open a backorder. The bottom line is all about managing customer expectations regardless if you’re a small accessories & apparel store or if you’re a big-item seller such as a furniture store.
Arrange products based on customer preferences
There’s always a possibility that unexpected demand surges can happen, and you’ll go out of stock, even when you are a small retailer, let alone an enterprise. While making a sale is tempting, the reality is you might get caught selling out of stock inventory. Your customers will thereby get disappointed if they don’t know that their items might take longer to deliver.
One suggestion to keep selling AND keep customers happy is to create a new sales page where you can list all backorders. Having a separate page for items on backorder allows you to sell stocks that are not on hand. It also informs your customers that the items they are about to purchase may take longer than usual to deliver.
You hold no stock (Especially for drop-shippers)
Running your business with backorders and a reliable supplier works. You’ll save a ton on carrying costs — no added storage and service costs needed to store inventory. You begin with taking backorders on the products displayed on your website and once enough you’ve got enough orders to hit the quota, it’s time to place an order with your supplier. It also lets you offer a huge variety of products at a lower cost as you won’t have to cover carrying costs. If you dropship your backorders, your customers won’t even have to wait for their backorders to reach you. Your supplier will fulfill these for you, further cutting down your customers’ waiting time.
Think about the types of items you sell. Imagine you’re selling hand-carved Chinese-made furniture. Furniture usually consists of big and bulky items so the holding costs for these tend to be very high. Instead of incurring hefty carrying costs, you can inform customers that delivery time may vary while keeping a small quantity of the most popular for immediate sale. Most customers are willing to wait, especially when dealing with big-ticket items.
If this sounds like preordering to you, you’re not wrong. The difference is that preorders are advance purchases of the product that will only be shipped out on the release date. Meanwhile, backorders will be fulfilled as soon as possible without needing to conform to a predetermined release date.
3. BackOrder for your BigCommerce store
Customers can navigate to a competitor’s website faster than if they were window shopping at brick-and-mortar shops. When they encounter something they don’t like (expensive shipping, long transit times, out-of-stock items, and other causes of cart abandonment), you risk not only that sale but their lifetime value as well.
Understanding this problem, GritGlobal is pleased to announce the launching of BackOrder: BigCommerce #1 solution. Its ultimate function is to help you automatically put your products on Back Order when out of stock.
BackOrders simply lets your buyers know that the product is not available currently, but they can still preorder and receive it on a particular day. This way, you don’t lose a valuable customer, and customers don’t have to leave your shop and hustle somewhere else.
Backordering – It’s about Inventory management
- Assign products & apply BackOrder: All you have to do to get your products backordered is to assign the best seller products, define inventory threshold & apply backorder settings. Sit back, relax & watch your products automatically be put on Back Order when out of stock;
- Predictive inventory management: a BackOrder Threshold to control BackOrder quantity. At the same time, plan your incoming inventory and Back in Stock Date;
- Next-level reports & analytics: get a transparent and in-depth view of your sale & inventory data. Export them to CSV whenever you like.
Backordering – It’s about Customer service
- Notify them
Notify shoppers that there is a stockout, but also provide the date you expect the inventory to become available again. Communication is key, and the product page is the place to do it. Don’t let customers keep shopping on your site only to find they can’t buy it when attempting to check out.
- Give manageable ETAs
Post an estimated time of arrival for your products so that your customers aren’t left waiting in the dark.
- Set up an email list
Collect email addresses of those who want to be notified once the product is back in stock on the product page. People tend to believe that fast-sold items are good. Therefore, this is a huge opportunity to trigger excitement and create a sense of urgency once the product is available again.
- Send emails once restocked
The most important part of having an email list is to send them the right message. Email any interested shoppers once stock has arrived and you’ve fulfilled any backordered orders for customers who have already paid. Here are some other ideas on how to keep customers engaged through email.
Learn more about BackOrder: BackOrder Management Platform