Imagine you want to buy headphones, but the store has run out. They let you place the order now and promise to ship it once it’s back in stock. The headphones are on back order.
What is Back Order?
Back order items are products that customers can purchase even though they are not currently in stock. The seller commits to shipping the item once it becomes available again. These items are clearly marked as back ordered on the invoice or order summary and are delivered in a future shipment.
What Are the Pros and Cons of Selling Back Order Items?
Pros:
- Keeps sales flowing even when stock is low
- Secures revenue before restocking
- Shows commitment to fulfill demand
- Reduces missed opportunities from out-of-stock notices
Cons:
- Delays in delivery can frustrate customers
- Inventory planning errors can lead to overselling
- Risk of losing trust if items take too long to ship
- Increases customer service workload
Example:
A customer orders a popular jacket that is currently out of stock. The seller allows the purchase and notes that the jacket is on back order. The customer is informed that it will ship in 10 days when new stock arrives.