Everything You Need to Know About Backorder Management and Partial Shipments

What Is Backorder Management?

Backorder management is the process of handling orders for products that are currently out of stock but are expected to be available in the future. Rather than canceling the order, businesses place the items on backorder and fulfill them once the inventory is replenished.

Why Backorders Happen

Supply chain disruptions

Sudden spikes in demand

Inventory forecasting errors

Production or shipping delays

The Importance of Backorder Management

Effective backorder management helps:

Maintain customer trust and satisfaction

Reduce order cancellations

Optimize inventory planning

Improve cash flow by preserving revenue from unfulfilled orders

Best Practices for Backorder Management

• Transparent Communication

Always keep customers informed about expected restock dates, delays, and fulfillment options. Use automated email or SMS updates to reduce customer service inquiries.

• Real-Time Inventory Syncing

Integrate inventory management with order processing systems to reflect accurate stock levels and automatically flag backordered items.

• Flexible Fulfillment Options

Offer choices like partial shipments or substitution with similar products to reduce customer dissatisfaction.

• Forecast and Plan Intelligently

Use historical sales data, seasonality, and market trends to anticipate demand and prevent stockouts.

• Set Backorder Thresholds

Avoid over-promising by capping the number of items that can be placed on backorder.

What Are Partial Shipments?

Partial shipments involve sending available items from an order separately, while the remaining backordered items are shipped later when they’re restocked.

Benefits of Partial Shipments

Faster delivery of in-stock items

Improved customer experience

Reduced pressure on warehousing operations

Challenges of Partial Shipments

Increased shipping costs

Potential confusion if not communicated clearly

Added complexity in logistics and tracking

When to Use Partial Shipments

Partial shipments are ideal when:

The customer needs part of the order urgently

Delays in restocking are significant

Shipping policies or agreements support split deliveries

How to Manage Partial Shipments Effectively

Automate Workflow Use an order management system (OMS) that can split orders and generate separate tracking numbers for each shipment.

Set Clear Policies Define when and how partial shipments are allowed—consider thresholds like order value or shipping destination.

Provide Visibility Allow customers to track each shipment individually through your platform or email notifications.

Coordinate With Suppliers If you’re drop shipping or working with 3PLs, make sure they can handle split shipments and maintain service levels.

Conclusion

Both backorder management and partial shipments are essential tools for balancing supply chain realities with customer satisfaction. When handled proactively and transparently, these strategies can turn potential frustrations into trust-building opportunities.