Backorders are one of those frustrating moments in online shopping. With your credit card in hand, you’re all set to check out, and then, bam, you see that dreaded message: “This item is on backorder.”
Delays like this can throw people off in today’s fast-paced, get-it-yesterday culture. Shoppers don’t enjoy waiting, and businesses? They’re juggling logistics, processing orders they can’t fulfill, managing customer expectations, and dealing with inventory issues that should’ve been caught earlier.
If backorders are becoming a frequent issue, it’s a red flag. It could mean your inventory forecasting needs work or that your supply chain isn’t quite keeping up.
So, what does “back order” actually mean in practice? Why does it happen? And how does it affect both buyers and sellers in the e-commerce space? We’ll break it all down, plus share practical ways to handle backorders better and turn a negative moment into something more manageable.
Let’s unpack it.
Back Order Meaning
A backorder happens when a product is sold but not currently in stock. In other words, the customer orders, and the payment goes through, but the item is not ready to ship yet. Do note that it’s not canceled; it’s just waiting for its turn in the queue until the seller restocks and can ship it out.
From a customer’s perspective, that can feel a bit like limbo. You paid, but now you’re stuck waiting without a clear sense of when your backing order will arrive. And if part of your order ships separately, it’s easy to overlook that another package is still on the way.
That’s why it’s so important for sellers to stay transparent, especially with split shipments and delivery delays. With tools like real-time tracking and timely updates, you can reduce confusion and help customers feel more in control, even when they’re stuck waiting.
Backorders may be common, but how you handle them can make all the difference.
Types of Backorder
There are different types of backorders; some are pretty straightforward, while others can create more complexity for both the seller and the customer. Here’s a breakdown of the different kinds, along with a few things to keep in mind for each:
Standard Backorder
This is your typical out-of-stock scenario. The item sold out but is expected back in stock soon, so orders are taken with a promise to ship once inventory is replenished. Retailers usually provide an estimated restock date, but delays can happen depending on supplier reliability.
Pre-Order Backorder
Often used for upcoming product launches or restocks, customers can buy before the item even hits the shelves. This gauges demand early but requires extra care in setting expectations around release dates and delivery timelines.
Partial Backorder
This occurs when part of an order is ready to go, but one or more items are temporarily unavailable.
The in-stock items are shipped first, while the rest follow later. It’s helpful for customers who need some of their orders urgently, but it also means managing multiple shipments and communication touchpoints.
When only part of the order ships, it’s easy for customers to miss that another package is still on the way. This is where having a branded tracking page (something LateShipment does well) makes a huge difference. It keeps the whole experience clean and clear, even when things are split across shipments.
Drop Ship Backorder
In this case, the retailer doesn’t hold the inventory at all. Instead, the item is fulfilled by a third-party vendor. Let’s say the supplier is delayed or out of stock. In that case, the retailer still has to handle customer service and expectations, even if the inventory is not in their direct control.
Custom Order Backorder
These are made-to-order products like personalized furniture, engraved items, or bespoke clothing.
Production time is baked into the wait, so the back order is not due to low stock but because the product doesn’t exist yet. Clear timelines and proactive updates are key here.
Manufacturer Backorder
When the delay starts upstream, with the manufacturer or supplier, it can take longer to resolve. The retailer is stuck waiting too, often with little control. This kind of backorder highlights the importance of having solid supply chain visibility and backup sourcing options.
Seasonal Backorder
These typically involve limited-time items, holiday décor, winter sports gear, or summer fashion lines.
Customers order in advance, knowing their order won’t ship until the season arrives. While this is expected, retailers must still plan to avoid overselling popular seasonal stock.
Indefinite Backorder
This is the murky one. The product is unavailable, and there’s no confirmed restock date. Customers can still place orders (or get on a waitlist), but there’s no telling exactly when or if it’ll ship. It’s a risky play and should only be used when customers are fully informed and willing to wait.
How Backorders Work?
A backorder is a promise: the customer pays for an unavailable item right now, understanding that it will be delivered once it’s back in stock. It’s a way for businesses to keep demand flowing even when inventory temporarily dips without turning away ready-to-buy customers.
But behind that simple idea, there’s a bit more going on in practice:
- Customer orders an out-of-stock item: The product is listed for sale despite being unavailable. Instead of displaying a “sold out” label, the seller enables back ordering, usually with a note explaining the delay.
- Seller confirms the order and expected restock: Once the order is placed, the business confirms it and typically provides an estimated restock or shipping date. That estimate depends on how soon they expect to receive new inventory from the supplier or manufacturer.
- Inventory is replenished: When the stock arrives, the seller processes the pending backorders before making the product available for new buyers.
- Order fulfillment happens post-restock: Once back in stock, the backordered items are packaged and shipped just like any regular order. Customers are notified when their order ships and given tracking information.
- Works well if stock shortages are temporary: Backorders are most effective when delays are short-term and predictable. If there’s too much uncertainty around restocking, it’s often better to pause sales or offer alternative options.
Once the stock’s back and ready to ship, the follow-up matters just as much as the fulfillment. We recommend automating these updates using LateShipment. It takes the pressure off your support team and ensures your customer doesn’t feel forgotten.
Common Causes of Backorders
Backorders usually happen due to planning gaps, supply chain disruptions, or unexpected demand spikes. Here are some of the most common (and often overlooked) causes:
Unexpected Demand Spikes
Brands usually forecast demand based on past sales and seasonal trends. But things like a viral TikTok video, a mention by an influencer, or unexpected media coverage can cause interest to skyrocket overnight, far beyond what was planned.
Other delays, such as flash sales, sudden celebrity endorsements, or trending news stories, can cause product demand to balloon overnight.
Supplier or Manufacturer Delays
Even if your demand is steady and predictable, delays from upstream partners can disrupt your ability to fulfill orders.
Suppliers might run out of raw materials, face labor shortages, or close temporarily (e.g., during holidays like Chinese New Year). If you rely heavily on a single supplier or don’t have enough buffer stock, these delays directly affect you.
Inaccurate Inventory Forecasting
Sometimes, the root cause is internal, and your projections don’t match buying behavior.
Poor data analysis, ignoring recent trends, or failing to account for marketing campaigns can lead to understocking. Even successful product launches can cause trouble if inventory isn’t scaled accordingly.
For example, a new limited-edition sneaker launch sees high engagement from early email campaigns, but stock levels are set based on older product data. You’ll be sold out in hours, with more demand left unserved.
Production Bottlenecks
If your production line has limited capacity or flexibility, it might be unable to keep up with demand or recover quickly from disruptions.
Smaller businesses or those offering customized products may need longer production times. A surge in orders or equipment failure can push lead times further out, creating a backlog.
Shipping & Logistics Delays
Even when goods are manufactured on time, delays in shipping or customs can throw off the entire fulfillment process.
Weather disruptions, container shortages, customs issues, or courier backlogs (especially during holiday seasons) can prevent products from reaching warehouses in time.
System Errors or Inventory Miscounts
Sometimes, the problem isn’t physical; it’s digital.
Inventory management systems that don’t sync in real time or are poorly integrated with sales channels can display incorrect stock levels. This leads to customers placing orders for items already out of stock.
For example, a website shows 20 units available, but due to a sync lag with the warehouse, the actual inventory is zero. Multiple orders come in, and everyone becomes a backorder.
Pros and Cons of Accepting Backorders
Backorders can actually serve a purpose when managed thoughtfully. Here’s how:
Signals Strong Demand (When Framed Well)
A product consistently selling out and still being ordered can indicate it’s in high demand. If framed correctly in your messaging, this creates a sense of urgency and desirability that may boost brand perception.
Leaner Inventory Strategy
Backorders allow businesses to reduce overstocking. Instead of tying up capital in large amounts of unsold inventory, companies can run leaner operations and restock based on real demand patterns.
Lower Warehousing Costs
With fewer items sitting idle in storage, companies can reduce warehousing fees, avoid spoilage or obsolescence (especially with seasonal or trend-based goods), and make more efficient use of space.
Early Revenue Recognition
Taking orders upfront, even when inventory is not ready, means cash starts flowing in sooner. For newer businesses or pre-launch products, this can provide important working capital and validate demand early.
Flexibility in Production Planning
Backorders offer manufacturers or small-batch producers more time to pace production and better plan resource allocation. This can be especially helpful for custom or made-to-order goods.
Challenges and Drawbacks of Relying on Backorders
While backorders can sometimes be a clever play, relying on them too heavily can hurt trust, satisfaction, and long-term loyalty. Here’s what to watch out for:
Customer Frustration and Drop-Off
Not every customer is willing to wait. If fulfillment timelines feel vague or too long, buyers might abandon the purchase or worse, switch to a competitor who can deliver faster.
Brand Credibility Risks
Chronic stockouts can look like poor planning. Over time, customers may interpret frequent backorders as a lack of operational stability or reliability, even if the reason is high demand.
Strain on Customer Support Teams
Backorders tend to generate more “Where’s my order?” inquiries, increasing your support team’s workload. Updates that aren’t proactive and clear can quickly escalate into negative reviews.
Unpredictable Supply Chain Pressure
If your supply chain is tight or facing disruptions, taking backorders adds extra pressure to fulfill delayed orders while managing new ones. This can compound risk, especially if restock dates keep slipping.
Cart Abandonment Risk
Some buyers may add an item to their cart, see the “backordered” status, and abandon the purchase altogether. Without incentives or clear communication, backorders can quietly lower your conversion rate.
Strategies for Managing Backorders Effectively
Backorders are often seen as a necessary inconvenience when demand outpaces supply. But how you manage them can make a big difference. A thoughtful backorder strategy can soften the impact, preserve trust, and even turn a delay into a moment of reassurance.
Here’s what you can do:
Maintain a Reliable Safety Stock Buffer
One of the most practical ways to prevent backorders is to maintain safety stock and hold extra inventory in reserve to absorb unexpected spikes in demand or supplier delays. This is especially helpful for high-turnover items, where running out even briefly can result in lost sales.
If a product lands in backorder status repeatedly, your buffer levels are likely too thin or outdated. While safety stock doesn’t solve extreme demand surges, regularly reviewing your reorder points and adjusting for seasonality or promotions can help keep fulfillment consistent.
Consolidate Backordered Items for Simpler Fulfillment
One of the most practical ways to prevent backorders is to maintain safety stock and hold extra inventory in reserve to absorb unexpected spikes in demand or supplier delays. This is especially helpful for high-turnover items, where running out even briefly can result in lost sales.
If a product lands in backorder status repeatedly, your buffer levels are likely too thin or outdated. While safety stock doesn’t solve extreme demand surges, regularly reviewing your reorder points and adjusting for seasonality or promotions can help keep fulfillment consistent.
Consolidate Backordered Items for Simpler Fulfillment
When a customer’s order includes both available and backordered products, shipping them separately can create confusion, double the shipping costs, and increase customer service inquiries. When timelines allow, a more efficient approach is to group backordered items and send them together once they’re all available.
This minimizes shipping overhead, ensures a smoother customer experience, and helps teams better manage fulfillment workflows. However, always communicate clearly if there’s a delay due to item consolidation.
Set a Clear Backorder Fulfillment Window
Keeping a backorder indefinitely open without a plan creates internal inefficiencies and customer dissatisfaction. Set a defined timeframe, usually around 30 days, during which your team actively tries to fulfill the order.
This timeframe sets internal expectations, helps prioritize procurement, and lets you be more transparent with your customers. It also prevents systems from being clogged with outdated or abandoned orders.
Prioritize Procurement, Even If It Comes at a Cost
If an item is on backorder, don’t wait passively. Make intentional efforts to source it, even temporarily absorbing higher costs or activating manual processes. Delays beyond your defined window hurt brand credibility more than the short-term cost of rushing a shipment.
Examples include contacting alternate vendors, expediting shipments, or re-prioritizing production queues. While not scalable for every item, this level of responsiveness matters when high-demand or high-margin products are at stake.
Notify Customers Before It Becomes a Pain Point
A common source of frustration is that the customers do not know their item is on backorder until they check the shipping status days later. Proactive communication is key.
If an order can’t be fulfilled within your window, notify the customer immediately. Offer options: keep the order open, switch to a similar product, or cancel with a refund.
This is where being proactive pays off. Don’t wait for people to email you in frustration. With a tool like LateShipment, you can automate updates, whether a delay, a new ETA, or even a heads-up that their order is still on track.
How is a Backorder Different from an Out-of-Stock Item?
Backorders and out-of-stock items mean the product isn’t currently available, but there’s a key difference in how they’re handled.
A backorder means the item is temporarily unavailable but still orderable. The seller expects to restock soon and is willing to accept orders, promising to ship as soon as inventory is replenished. Customers can pay upfront and wait.
On the other hand, an out-of-stock item cannot be ordered at all. It is unavailable, and there’s no option to purchase it until it’s restocked if it ever is. The seller may not have a confirmed restock timeline or may choose to stop offering the product altogether.
Backorder vs Out of Stock: At a Glance
Feature | Backorder | Out-of-Stock |
Can customers order it? | Yes, the purchase is allowed | No, the purchase option is disabled |
Stock availability | Temporarily unavailable, but expected to return | Unavailable with no current purchase option |
Customer payment | Collected at the time of order | Not applicable (item can’t be ordered) |
Fulfillment timeline | Fulfilled once new stock arrives | Fulfillment is only possible after the item is restocked |
Typical messaging | “Ships when available” or “Backordered” | “Out of stock” or “Currently unavailable.” |
Implications for business | Revenue still flows despite the delay | Potential missed sales if customers go elsewhere |
How Can LateShipment.com Help?
Backorders may begin as a simple inventory hiccup, but the ripple effect they create, delayed shipments, uncertainty, rising support tickets, and potential churn are anything but minor.
What’s often overlooked is that the real damage doesn’t stem from the delay itself; it comes from the silence, the lack of visibility, and the feeling that customers are left in the dark. That’s where the true friction lies.
This is where Delivery Experience Management becomes a critical lever, and LateShipment offers one of the most targeted solutions in this space. It helps businesses regain control over post-purchase communication and customer satisfaction, even when fulfillment hits a snag.
Here’s how:
- Proactive shipment notifications: LateShipment automatically alerts customers when orders are delayed, especially valuable when backordered items ship later than expected. It eliminates guesswork and prevents “Where’s my order?” inquiries before they start.
- Branded tracking pages: Replace generic carrier pages with branded, personalized tracking experiences. This reinforces your brand presence and keeps customers engaged during the wait.
- Real-time delivery monitoring: The platform monitors deliveries across multiple carriers and identifies exceptions, such as delayed, lost, or stalled shipments, so your team can respond faster and more effectively.
- Automated customer communication: With LateShipment, you can trigger emails or SMS messages when something changes, like a new ETA for a backordered item or a partial shipment in transit.
- Insights: You gain access to analytics that reveal how delivery delays (including those due to backorders) impact customer satisfaction, helping you fine-tune your operations and set realistic expectations.
FAQs About Backorder
1. Can offering backorders actually improve customer loyalty?
Yes, if handled well. When customers are informed about delays and feel they’re kept in the loop, many are willing to wait, especially for products in high demand or limited supply.
2. Should I always allow backorders, or only for certain products?
Not all products are good candidates for backorders. They’re best used for high-demand items, customizable products, or SKUs with predictable restock cycles. For items with long or uncertain lead times, it may be safer to disable back ordering to avoid customer frustration and operational strain.
3. How do backorders affect forecasting and inventory planning?
Backorders offer valuable data on unmet demand. If a product consistently sells out and enters backorder, it’s a strong signal that your forecasting or lead times need adjustment.
4. Can I still promote products that are on backorder?
Yes, but with transparency. If a product is backordered and you’re still actively marketing it, be upfront about shipping timelines. Promoting a backordered item without clear availability details can lead to customer dissatisfaction and higher cancellation rates. But if you’re honest and set expectations, some customers may still convert, especially for limited or high-value items.
