A backorder happens when a customer places an order for a product that's temporarily out of stock but still available to purchase, with delivery promised once you restock. That way, instead of losing the sale, you're basically saying: "We're out right now, but we'll get more and we'll ship yours the second it arrives."
Backorders exist in that tricky space between "in stock" and "sold out," and how you handle them can either make or break customer trust.
This guide breaks down what causes backorders, when it makes sense to accept them, and actionable strategies to reduce them in your warehouse operations.
A backorder is an order for a product that's currently out of stock but expected back soon. Instead of turning away customers, you accept their order now and fulfill it when inventory arrives. Think of it like putting your name on a waiting list at a busy restaurant. You're committed (and already have your eye on what you want), you just need to wait your turn.
The backorder meaning comes down to this: The customer commits to purchasing, and you commit to delivering when stock gets replenished.
What is in a name, really? Out in the world, you might encounter it written as "backorder," "back order," or "back-ordered.” They all mean the same thing.
What really happens when something is backordered? The process follows a fairly simple path ...
A customer orders an item you don't have in stock right now. Rather than declining the order, your system accepts it and marks it as backordered. Meanwhile, behind the scenes, your supplier or manufacturer is working to replenish your inventory. Then, when that stock arrives and gets checked into your warehouse, you fulfill the waiting order and ship it out.
Here's how it flows step-by-step:
From the customer's viewpoint, being backordered means they've paid (or agreed to pay), but delivery is postponed until you restock.
These terms get confused constantly, but they represent completely different situations.
When something is out of stock, you're not taking orders for it what-so-ever. The customer reaches a dead end. They can't purchase, and you lose the sale.
When something is on backorder, you're accepting orders despite having no inventory available. The customer can buy now and receive the item later.
| Backorder | Out of Stock | |
| Can customers order? | Yes | No |
| When is it fulfilled? | After inventory is replenished | Not fulfilled until restocked and relisted |
| Customer expectation | Delayed delivery | Unavailable item |
| Revenue impact | Revenue continues to flow | Revenue stops |
** The key difference is that backorders keep revenue flowing. Out of stock means you're turning money away.
Backorders usually stem from visibility gaps or supply chain disruptions, not just "selling too much." Understanding the root causes helps you prevent them before they happen.
Manual counts and outdated systems create mismatches between what you think you have and what's actually on the shelf. Without solid inventory control practices in place, if your records show 50 units but you really have 12 … you're going to oversell.
Selling across multiple platforms without synced inventory is a recipe for backorders. You list the same 20 units on Amazon, Shopify, and Walmart, and suddenly you've promised 60 units you don't have. Real-time inventory sync across channels prevents this problem entirely.
Poor sales predictions leave you short. Maybe you underestimated holiday demand or missed a viral trend. Either way, you're scrambling to restock while orders pile up.
Safety stock is your buffer inventory. The cushion that absorbs unexpected demand spikes. Running too lean means any surge in orders tips you straight into backorder territory.
Sometimes the problem isn't on your end at all. With 82% of supply chains affected by tariffs, raw material shortages, production issues, or shipping disruptions from your vendors can leave you waiting for inventory that's already been promised to customers.
Extended supplier lead times, the gap between placing a purchase order and receiving goods, increase backorder risk. This is especially common with imported products where ocean freight adds weeks to your timeline.
So, why would you intentionally allow backorders?
Turns out, there are some real strategic benefits worth considering:
For certain businesses, backorders represent a calculated strategy rather than an operational shortcoming.
That said, backorders aren't without cost. They come with some real tradeoffs.
The secret is balancing the revenue benefits against the customer experience costs.
You can't eliminate backorders completely, but you can substantially reduce them with the right systems and practices in place.
Understanding exactly what's available at any given moment prevents overselling. Barcode scanning and live inventory counts maintain record accuracy – real-time inventory tracking eliminates guesswork entirely.
A centralized inventory view across e-commerce, marketplaces, channels, and locations prevents double-selling the same unit. A WMS with multi-channel sync manages this automatically, refreshing quantities everywhere instantly when a sale occurs.
Your reorder point is the inventory threshold that triggers a new purchase order. Configuring this properly, alongside adequate safety stock, makes sure you're restocking before inventory reaches zero.
Multiple suppliers reduce dependency. So, when one supplier experiences delays, another can bridge the gap. Single-source dependency creates a genuine risk.
Historical sales data enables you to forecast demand spikes. Holidays, promotional campaigns, and seasonal patterns follow predictable cycles. Use that intelligence to stock appropriately.
How you handle communication will often determine whether customers wait patiently or gather the pitchforks.
Don’t wait. Inform customers the moment you discover an item is backordered. Honesty builds trust, even when delivering disappointing news.
Offer honest ETAs based on your supplier timelines. Underpromise and overdeliver whenever possible (consumers rank on-time delivery above speed). Therefore, nothing aggravates a customer more than constantly shifting timelines.
Let customers swap for similar in-stock items or cancel easily. Forcing them to wait when they’d rather not is a fast way to lose goodwill.
Automated messages when backordered products ship keep customers updated and reduce support inquiries. They shouldn't have to chase you down for updates.
This is one of the most common questions, and the honest answer is: It depends.
Backorder timelines vary widely based on supplier lead times, product type, and whether you're dealing with a manufacturing delay versus a shipping delay. Some backorders resolve in days. Others extend into weeks or even months for specialized products.
The key is clear communication with your supplier ... and then with your customer. If you don't know when the stock is arriving, say so. Customers appreciate honesty more than vague promises.
Fulfillment partners leverage inventory management platforms, real-time visibility, and automation to keep stock levels accurate. A purpose-built WMS with features like multi-channel sync, reorder alerts, and lot tracking helps catch potential stockouts before they become backorders.
For 3PLs managing inventory for multiple clients, this visibility is even more essential. Because you're juggling dozens of SKUs across various accounts, one overlooked reorder point can trigger customer complaints and chargebacks.
Not every operation manages backorders the same way. Your approach depends on multiple considerations:
If you're ready to reduce backorders and streamline fulfillment, the right WMS makes all the difference. Book a free product tour to see how Zenventory helps 3PLs and warehouses stay ahead of stockouts.
A partial backorder happens when only some items in a multi-item order are out of stock. You ship what's in stock immediately and fulfill the remainder later.
A rolling backorder is when expected restock dates keep shifting due to ongoing supplier delays, extending the customer's wait time.
A backorder applies to an existing product that is temporarily unavailable. A pre-order applies to a new product that hasn't been released yet.
Backorderable means a product can be ordered even when it’s out of stock, with fulfillment expected once inventory is replenished.
Yes. Most retailers allow customers to cancel backordered items before they ship, though policies vary by seller.