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.
