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What is a backordered item?

Backorders happen when your customer orders items that you don’t have enough inventory in your fulfillment center to process. There was a time, not so long ago, when customers were content to wait for backordered items to be restocked. There are still unique situations where backorders act as placeholders for new products that aren’t yet in your inventory. Consumers will pay in advance to make sure they get the new product as soon as it is available. However, generally, backorders are not a good thing and should be avoided.

As e-commerce has evolved in tandem with a significant increase in online shopping, the number of online retailers has increased, providing online shoppers with the option to purchase your backordered item from another vendor. To add more to the importance of real-time inventory management, Amazon began offering customers two-day delivery that made it even more important to make sure you kept a close watch on your inventory levels. When delivery times shortened even further to next-day delivery with free shipping, consumers weren’t about to wait for an item they could get the next day from another online vendor. If you have one or two products on backorder, you can issue a purchase order for those products and inform your customers when they will be available.

However, backorders can become a logistical and inventory control nightmare when you’re trying to manage hundreds of sales orders. What happens if your supplier runs out of materials and you have no choice but to issue refunds to your customers? Customer experience is an important element for online shoppers so doing everything possible to keep these situations to a minimum is vital. Otherwise, your integrity as an online vendor may be compromised and customers will buy from other vendors, they feel they can rely on.

When you partner with Phase V, you no longer need to worry about backordered items because our proprietary software allows you to set up inventory alerts so you have time to replenish your inventory before it becomes an issue. Our software will also help predict the items that might be big sellers at certain times of the year based on data from previous years to ensure you are ready to meet the demand. We understand that inventory management is essential to your e-commerce business’s success – call us today to discuss how we can help avoid backorder issues for your customers.