The Differences Between Backlog vs Backorder
Understanding the differences between backlog vs backorder is crucial for businesses aiming to optimize their supply chain and inventory management. Both terms are integral to ensuring smooth operations and high customer satisfaction, but they are often misunderstood. By clarifying these concepts, businesses can improve efficiency and better meet customer needs. Understanding Backlog A backlog is essentially a queue of tasks or orders that are waiting to be processed. In the context of supply chain management, a backlog represents unfulfilled orders that have not yet been completed or shipped. This can happen at any stage in the order processing system, from order receipt to production to shipping. Definition of Backlog A backlog occurs when there is an accumulation of unfulfilled orders in a business’s system. These orders are yet to be processed or shipped to customers. This situation can arise at various points in the order processing cycle. Backlogs are common in businesses experiencing high demand, and while they indicate growth, they need careful management to avoid customer dissatisfaction. Understanding where backlogs can occur helps in addressing and preventing them effectively. Causes of Backlog Backlogs can occur due to several reasons. Here are the main causes: Each of these factors can contribute to a growing list of unfulfilled orders, requiring businesses to address the root causes to manage their backlogs effectively. By identifying these causes, businesses can implement strategies to minimize their impact. Impact of Backlog on Business The impact of a backlog on a business can be both positive and negative, depending on how it is managed. While backlogs can signal business growth, they need to be managed effectively to prevent them from becoming a burden on the business and affecting customer satisfaction. Proper management can turn backlogs into opportunities for growth and improvement. Managing Backlog Effective backlog management is key to maintaining customer satisfaction and operational efficiency. Here are some strategies: By employing these strategies, businesses can manage their backlogs more efficiently, ensuring timely order fulfillment and high customer satisfaction. Regular assessment and adjustments to these strategies can lead to continual improvement in backlog management. Understanding Backorder A backorder is a situation many businesses face when they cannot immediately fulfill customer orders due to a lack of stock. While it might seem similar to a backlog, it’s a more specific term within inventory management. Knowing the distinction between backlog vs backorder is essential for handling supply chain issues effectively. Definition of Backorder A backorder occurs when a customer places an order for a product that is currently out of stock. Unlike a backlog, which can include any unfulfilled orders at various stages, backorders specifically refer to items that are not currently available but still in demand. Understanding backorders helps businesses recognize areas where inventory management needs improvement to better meet customer expectations and maintain satisfaction. Implementing BigCommerce BackOrder by GritGlobal ensures that customers are informed about stock status and expected delivery times, maintaining transparency and trust. Causes of Backorder Several factors can lead to backorders, each requiring different strategies to address. Here are the primary causes: Each of these causes highlights the importance of having a robust inventory management system and being prepared for unexpected changes in demand and supply chain conditions. Impact of Backorder on Business The effects of backorders on a business can be both positive and negative, much like backlogs. Properly managed, backorders can indicate healthy product demand; unmanaged, they can lead to customer dissatisfaction. Balancing the positive aspects with proactive management can help businesses turn backorders into opportunities for improvement rather than points of failure. Managing Backorders Effectively managing backorders is critical to maintaining customer trust and ensuring business operations run smoothly. Here are some key strategies: Implementing these strategies can help businesses manage backorders more effectively, reducing negative impacts on customer satisfaction and turning potential issues into opportunities for growth. BigCommerce BackOrder offers features like automated notifications, stock level updates, and seamless integration with your inventory management system. These features from GritGlobal help businesses manage backorders more efficiently, reducing negative impacts on customer satisfaction and turning potential issues into opportunities for growth. Key Differences Between Backlog vs Backorder Understanding the key differences between backlog vs backorder helps businesses manage their inventory and order fulfillment more effectively. These distinctions impact how businesses approach their operations and customer service. Scope and Duration Between Backlog vs Backorder The scope and duration of backlogs and backorders differ significantly, influencing how they are managed. These differences highlight that while a backlog encompasses a broad range of unfulfilled orders, backorders focus specifically on stock-related issues. Managing each requires understanding their unique scopes and durations. Management Strategies Effective management strategies for backlogs and backorders are essential for maintaining smooth operations and high customer satisfaction. By implementing these tailored strategies, businesses can effectively manage both backlogs and backorders, ensuring timely order fulfillment and customer satisfaction. Business Implications The implications of backlogs and backorders on a business can vary, affecting everything from customer satisfaction to operational efficiency. Understanding these implications helps businesses develop strategies to mitigate the negative effects while capitalizing on the positives. Effective management of backlogs and backorders ensures a balanced approach to growth and customer service. Conclusion In conclusion, knowing the differences between backlog vs backorder is crucial for effective supply chain and inventory management. While both concepts involve unfulfilled orders, their causes, management strategies, and implications for business differ. By addressing these differences, businesses can improve their operations and maintain high levels of customer satisfaction. Leveraging tools like BigCommerce BackOrder from GritGlobal can significantly enhance the efficiency of managing backorders, ensuring seamless inventory management and improved customer experience. For more information on how to manage your backlogs and backorders effectively, contact us today.
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
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.
Selling online with BackOrder: Keep your customers happy & revenue flow going
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
