The Differences Between Backlog vs Backorder

backlog vs backorder

The backlog represents your entire unfulfilled order history, including all unsatisfied customer orders. Backorders are customer orders of out-of-stock items. Understanding backlog vs backorder is crucial for effective inventory management. There can be backorders in your backlog, but stores can choose not to allow them on their websites. An accurate backlog will help with inventory management. Backorders are a viable sales tactic to rescue lost revenue. A staggering 55% of eCommerce businesses don’t give attention or importance to their supply chains. Knowing the differences between backlog vs backorders can give you a competitive edge on inventory management for your eCommerce store. Backlog vs backorder are an inevitable part of running an eCommerce business. Believe it or not, having backorders could actually be a sign of a spike in revenue and growth for your store. Sometimes, it’s actually not always beneficial for an eCommerce store to fulfill every order as soon as possible. So, if you’re wondering basic questions like: What are the differences between backlog vs backorder? Or how are backlogs created? Even how long to wait for backorder on average? This article breaks down the basics of backlog and backorders for eCommerce and other industries. 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 orders for you to ship the product. For instance, a customer orders a particular item on January 24, requesting the order be shipped on January 30. This order becomes part of your backlog from January 24 until January 29. Ecommerce stores often use many tools in conjunction to track their backlogs accurately: What is Backorder? Backorders are orders placed when an item has zero available inventory. In the context of BigCommerce inventory management, it’s important to note that backorders can be a part of your backlog, but your backlog is not solely composed of backorders! Stores sometimes encourage backorder purchases, seeing exceptional returns on investment simply by allowing customers to purchase out-of-stock items. However, stores must consider many factors before allowing for backorders. If you’ve done an excellent job of building an accurate and clear understanding of your backlog, backorders can be a powerful sales tactic to increase your store’s revenue. Backlog vs backorder People tend to confuse the two terms (backlog vs backorder) because of how similar they are. All eCommerce stores have a backlog: a list of unfulfilled orders. But not all stores support backorders, so their customers cannot buy out-of-stock items Is Backlog Bad in eCommerce? While many see backlog as negative, it simply represents the total number of unfulfilled orders. Stores must have a system to accurately track their backlog and ensure their customers’ experiences are up to standard. Optimizing your backlog takes work from every department, so cross-app integration and up-to-date data streams are essential to managing backlogs and inventory in eCommerce. Effective BigCommerce order management can help streamline this process, ensuring that your store runs smoothly and efficiently. What are the most common types of backlog in eCommerce? The three most common reasons for unfulfilled orders in a backlog are: Is BackOrder Bad in Ecommerce? Having backorders awaiting delivery can be a sign of a successful business. With tools like BigCommerce BackOrder from Gritglobal, eCommerce stores like Chilly Dogs can take full advantage of sales seasons by allowing purchases beyond their inventory estimation. While backorders can be beneficial, they can also backfire. Without clear and accurate information on expected shipping time, backorders can create friction in customer relations. The customer’s patience may run out before the shipping date, leading to potential cancellation. So, think ahead about your backorder threshold and supply capabilities before implementing backorders for your store. How long should you wait for a backorder? The time you should set for your expected ship date depends on various factors. Shipping location, item weight, or transportation can all factor into how long to wait for a backorder to arrive. As an eCommerce store, you should estimate your backorder ETA to ensure customer satisfaction and real order fulfillment time. It’s a good benchmark to know that the average backorder time to wait among eCommerce stores is: Understanding Backlog vs Backorder Whether you run a small or big eCommerce online store, you need to fully understand the differences between backlog vs backorder. A backlog can give you incredible insight into your store’s strengths and weaknesses, so setting up an accurate backlog should be every store owner’s top concern. On the other hand, backorders are a viable sales tactic for some eCommerce stores. Tools like BackOrder for BigCommerce generate additional revenue for many eCommerce stores with a niche feature. Contact us to have the best services with BigCommerce BackOrder!

Instruction to Integrate BackOrder into Atom8

Perhaps the biggest fear of any merchant is to fail to serve the best of their customers, especially during the high season. You might be too busy with setting up the store and forget about your stock running out.  With Atom8’s BackOrder integration, you can keep track of your inventory and allow customers to pre-order your product while running other automated tasks. It provides a centralized management system without switching back and forth between platforms.

Assign a Product to BackOrder in Atom8

No retailer ever wants to fail their customers’ expectations, especially when it comes to best-selling items. However, there are times when the customer demands outweigh the number of inventory. To prevent customer loss, assign your product to BackOrder. This way, your visitor can still have it delivered in the future while giving your staff more time to fulfill the stock.

eCommerce Order Fulfillment Challenges and Best Practices

A man using automation in fulfillment management

For online merchants, acquiring a customer is not yet the end. It’s just the beginning of the broader supply chain process: eCommerce Order Fulfillment. There are many moving pieces of the fulfillment workflow for an order to end up at the customer’s doorstep – including receiving inventory, warehousing products, picking and packing items, and shipping orders. Let’s take a look at the overall steps involved in order fulfillment: Receiving: Merchants receive orders that are already placed by customers Warehousing: Proper inventory storage gives merchants visibility into what is available to ship to customers. Order processing: Ordered items are picked from the warehouse and packed to ship. Shipping: The carrier picks up orders from the fulfillment center while customers receive shipment notification and tracking info. Returns processing: Exchange or refund initiated by customers due to items’ quality or malfunction. Which Order Fulfillment method to use? 1. In-house fulfillment In-house order fulfillment is when a business handles all parts of the eCommerce order fulfillment process on its own. This model is the easiest fulfillment framework to get off the ground. It offers you total control over getting products to the customer, so long as the order volume is manageable. The entire process can be quite cumbersome as it takes merchants lots of time to manage a warehouse, picking and packing orders, and ultimately, shipping the items to customers. For those just starting a business with a tight budget, fulfilling in-house can be a good option. But when the business expands, it probably makes more sense to outsource the process and pay an eCommerce order fulfillment expert to handle everything. Therefore, a merchant’s time can be better spent on other matters such as acquiring more customers or developing new marketing strategies. 2. Dropshipping Dropshipping means that the merchant never holds the products they sell. Instead, the products are shipped from the manufacturer directly to the end customers without the business ever storing the product itself. In a way, dropshipping is the anti-inventory and affordable eCommerce order fulfillment method. Merchants will not have to worry about paying rent or storage, no excess stock, no storage fees as well as risks related to product quality due to storage such as mold, spoiled or fire. The convenience of a hands-off product fulfillment experience thereby enables businesses to focus on other priorities, which is especially advantageous to new companies. Dropshipping can pose an advantage to businesses that don’t have their own storage space. But because you’re not managing your deliveries yourself, communication with the shipping party is critical to delivering products on time and keeping customers happy. 3. Hybrid fulfillment This is the combination of in-house fulfillment and dropshipping methods. A company may process some orders in-house and at the same time outsource some of their sales to a dropshipping service provider. Some companies choose to use dropshipping for items that are infrequently purchased or those that they don’t want to store in-house, such as large or expensive items. This is ideal for regional brands that are expanding their presence to reach a wider number of customers with faster shipping options. Challenges of Order Fulfillment 1. Inventory management As your business grows, it will inevitably become harder to manage inventory – especially if you’re an eCommerce merchant, whose customers expect to see a product’s availability and status at every point in the buying process. Therefore, running out of stock is a one-way ticket to a sales disaster as it deters customers from shopping with you. Companies that succeed in maintaining optimal inventory levels won’t have to worry about losing customers to their competitors due to stockouts. 2. Logistics dysfunctions The right things should be in the right place at the right time. Or else, you risk late, broken, or missing packages, which can hurt your reputation and sales even more than not generating the sale. The shipping process is just as important as the sale itself. Another challenge to make a smooth eCommerce order fulfillment process is to ensure the shipping method, speed, and product quality. 3. Customs restrictions The local merchants may not be familiar with customs selling processes and shipping overseas restrictions. Help yourself clear the issue with documents or declarations that involve costume restrictions. It is essential that you get a picture of the whole process before selling out your first international order. Best practices for Order Fulfillment 1. Decide what best suits your business The best eCommerce order fulfillment model, whether it’s in-house or dropshipping, should be flexible enough to handle the order volumes without unnecessary delays. 2. Be transparent With better supply chain visibility, merchants can set clear expectations with customers about deliveries. Let your customers know the actual delivery date or any anticipated delays as well as returns processes. Detailed information makes up secured and satisfied customers. 3. Use the right tools  A smooth eCommerce order fulfillment closely relates to product availability. Of course, maintaining an ideal storage level requires insightful control and precision in every stage of the supply chain. But what if there is any deviation from your smooth logistics process or unexpected spikes in demand? Luckily, there are numerous tools that integrate with an eCommerce website and help you monitor stockout situations. You’ll thank yourself later for finding and implementing the tools that will make your fulfillment process run smoother. Your easy-win solution for out-of-stock With no doubt, stockout causes serious consequences: your regret at out-of-stock revenue and the dissatisfaction of customers – but with the BackOrder application, it is preventable. The app’s core value is that it allows customers to make purchases even when out of stock or before stock arrives. This utmost functionality is what drop shippers and Bigcommerce merchants really need. With the full-featured design for easily managing stock, the BackOrder app allows merchants to keep track of every detail regarding product inventory and customize their storefront. You can perform regular inventory audits, review inventory storage options, manage SKU creation, and especially mitigate inventory loss. Other than that, BackOrder is also a great tool

Black Friday Stock-out: What It Costs Sunglass LA and Why BackOrder is The Perfect Solution

Sunglass LA is one of the few eyewear brands that achieved success from the very beginning owing to its trendy and affordable designs. The innovative visual merchandising, store branding and product strategy enabled Sunglass LA to achieve astonishing results in the market. Like other brands, Sunglass LA always developed thoughtful strategies to maximize its revenue during major shopping occasions. Black Friday 2019 was expected to be the best campaign. And sure, they hit their targets. But there was a whole bunch of regrets for not selling more and leaving some customers very dissatisfied. A regrettable 2019 Black Friday For Sunglass LA, Black Friday is the single most important time for boosting revenue, increasing brand awareness, and retaining loyal customers. On this occasion every year, they typically see: 150% increase in daily organic traffic to their website from the beginning of November to the end of December. At least triple the monthly revenue at the end of every year. Up-selling & cross-selling rates increase by 50%. For the above reasons, Sunglass LA had their eyes on the prize for the 2019 Black Friday campaign. They focused on selling their Cat Eye Sunglasses, which were the top trending product at the time, with discount codes and bundle products. Their Marketing team built up a perfect plan to attract more customers: from taking professional product pictures to designing banner ads, writing ad copies to set up ad campaigns, email marketing, and chatbot conversations,… According to their CMO, Sunglass LA spent over 30 days preparing for the holiday campaigns and poured over $1,500 a day for the ad budget with super high hopes. And indeed, it worked. Their 2019 Black Friday campaign did reach out to nearly 450,000 customers. The online traffic to their website increased by 215%. Along with the optimization of delivery policy, the products were flying off the shelf. And that’s when the problems started. The out-of-stock issue “While making a sale was super tempting, the reality was that we did get caught selling out of stock inventory. As a result, we could no longer sell the winning products and even worse, our customers got disappointed.” Viet Tran – CEO of Sunglass LA The soaring holiday demand in 2019 had put Sunglass LA in a passive position. Their best-seller products were out of stock in only 10 days. As a result, there are tons of requests and emails asking when they would be back in stock. Customers reported their advertising campaign for sold-out products. Buyers kept complaining about not getting what they wanted and, at the same time, the customer service team faced constant headaches for the whole holiday season. “Everything was out of control. We were all in panic.”  It was a harsh time for the brand. Viet Tran and his team came up with some solutions in hopes of easing the storm: gathering up those unsolved orders, sending letters of apology to customers, pausing the advertising campaigns for those best-seller products, and shifting the focus to the others. “This was just the way to mitigate some of the issues, not the most favorable when it comes to generating revenue. However, we had no other option,” said Viet Tran. “Not preparing for selling out is a one-way ticket to your Holiday sales disaster. We did not prepare well enough, and we had to pay the price – a heavy price…” But this 2020 Black Friday season, they learned their lesson. Sunglass LA has found an innovative inventory back-up solution – BackOrder. The solution from BackOrder This year, even during the pandemic, Viet Tran and his team are ready. BackOrder helps them keep selling even when there’s no sufficient stock on hand and avoids the dreaded customer dissatisfaction disaster of 2019. Non-stop selling and communication with customers Sunglass LA put all the best-seller products on backorder settings. This is THE way to keep selling AND keep their customers informed whenever there’s a stockout. The product will automatically be switched to BackOrder along with a message to inform customers about the expected delivery date. That way, they don’t lose revenue. And valuable customers won’t leave their store to buy from other competitors. Get insights into the market trend With the soaring demand and traffic to the site, the team figures this could be the time for testing and validating demand for new products. Based on the number of back-ordered products, the Sunglass LA team can learn more about consumer shopping behaviors, and therefore strengthen their overall strategy in Black Friday 2020.  Viet Tran and his team calculate the demand for specific kinds of eyewear based on sales and BackOrder data. That way, they understand customers’ preferences and reallocate resources to what really matters. “It’s all about inventory management. We are so happy we started using BackOrder. This app is exactly what we are looking for. It’s saved us from last year’s crisis.” Viet Tran – CEO of Sunglass LA Key takeaway BackOrder solution has now become one of the best choices for inventory management. It’s the life-saver for out-of-stock revenue. With its transparent view on sales and inventory status, BackOrder helps eCommerce merchants prioritize their products based on popularity and orders. Great news for e-retailers: you can set BackOrder on trial for free until November 16. Enjoy great launch offers. Sit back and watch your products automatically be put on BackOrder when out of stock.

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