Picture this: a customer falls in love with one of your products, clicks "buy," and then sees the words "on backorder." Do you lose the sale, or do you keep it? If you handle backorders well, you keep it, and you keep the customer happy too. That's the opportunity hiding inside every out-of-stock moment, and it's exactly what we'll help you get right.
Backorders are one of those parts of running a product business that can feel like a headache or a handy tool, depending on how you manage them. Get them wrong and you risk frustrated customers, extra costs, and lost revenue. Get them right and you can keep selling products you don't currently have on the shelf. Stockouts are expensive when they aren't managed: the IHL Group estimates that inventory distortion, the combined cost of out-of-stocks and overstocks, runs retailers about $1.77 trillion globally each year. Backorders are one of the smartest ways to claw back some of that lost revenue, so let's walk through what they are and how to make them work for you.
A backorder is an order you promise to fulfill for a product that isn't currently in stock, along with a shipping date the customer agrees to wait for. In plain terms, you're still selling the item, you just can't ship it right this second.
The key difference from a plain "sold out" message is the promise. When something is on backorder, you're telling the customer, "We've got you, and here's when it'll arrive." That commitment keeps the sale alive instead of sending your customer off to a competitor.
The flow is simpler than it sounds. Here's how a typical backorder moves from click to doorstep:
How long does all of this take? It varies by product and supplier, but a typical backorder lands in the customer's hands within about 14 days. Some clear faster, and some (think custom or imported goods) take longer. The golden rule is to set a realistic date and then beat it if you can. Under-promising and over-delivering never goes out of style.
These three terms get mixed up all the time, and the difference really matters for how you set customer expectations. Here's a quick side-by-side to keep them straight.
| Term | Can you still order it? | Ship date | What it means for the customer |
|---|---|---|---|
| Backorder | Yes | Promised future date, usually about 14 days out | The item exists and sells normally, but it's temporarily unavailable. You'll get it once stock returns. |
| Out of stock | Often no | No date offered | The item is unavailable with no promise of when, or whether, it'll return. The sale is usually lost. |
| Pre-order | Yes | Tied to a launch or release date | The item is new and hasn't been released yet. You're reserving it ahead of its debut. |
The short version: a backorder keeps the sale alive with a promise, "out of stock" often lets the sale slip away, and a pre-order is about something that hasn't launched yet. Knowing which is which helps you word your product pages so customers know exactly what they're getting into.
Backorders don't appear out of thin air. They usually trace back to one of three culprits, and understanding them is the first step to keeping them in check.
Sometimes a product simply flies off the shelves faster than you planned. A seasonal rush, a viral moment on social media, a holiday shopping surge, or a surprise mention from an influencer can all send demand through the roof overnight. When sales outpace your stock levels, backorders follow.
These spikes aren't always predictable, but they aren't always random either. Reviewing past sales data and watching for early signals can help you spot the wave before it crashes over your inventory.
Take a familiar real-world case: when a small skincare brand gets an unexpected shoutout from a beauty creator, a product that normally sells a few dozen units a week can rack up thousands of orders in a day. There's no way the brand's usual stock could absorb that, so backorders become the only way to say "yes" to every eager buyer instead of turning them away.
Even the best-laid inventory plans can be thrown off by forces outside your control. Supplier delays, shipping bottlenecks, raw material shortages, and logistics snags all stall the flow of goods into your warehouse. When your restock doesn't arrive on time, the products you were counting on end up on backorder.
Supply chain disruption is a big deal at scale. The IHL Group points to supply chain issues as one of the largest single drivers of global inventory distortion, the umbrella term for the cost of stockouts and overstocks combined. In other words, you're far from alone if your suppliers occasionally leave you hanging.
This is the frustrating one, because it's the most preventable. Miscounts, outdated stock records, and systems that don't talk to each other can make you think you have plenty of a product when you're actually running on empty. By the time you catch the mistake, orders are already piling up.
These errors multiply fast when you're selling across multiple channels. If your online shop, marketplace listings, and physical store all pull from separate spreadsheets, it's only a matter of time before the numbers drift apart and a phantom stock count triggers a backorder.
The fix is usually connection, not more counting. When every sales channel reads from one shared, real-time stock number, the "we thought we had 50 but really had 5" problem mostly disappears. That's the difference between reacting to backorders and preventing them.
Backorders aren't automatically bad, but left unmanaged they can chip away at your business in a few important ways. Here's what's at stake.
Waiting isn't most shoppers' favorite activity. If a backorder drags on, or if the promised date keeps slipping, customers can lose patience and take their business elsewhere. Worse, a bad backorder experience is the kind of thing people mention in reviews.
The flip side? Customers are surprisingly forgiving when you keep them in the loop. A clear, honest heads-up about timing turns a potential complaint into a "no problem, I'll wait." Communication is doing a lot of heavy lifting here.
Backorders create extra work, and extra work costs money. Your team spends time fielding "where's my order?" questions, coordinating with suppliers, and processing split shipments. You might also eat rush-shipping fees to get products to waiting customers faster.
None of these costs are huge on their own, but they add up quietly. A steady stream of unmanaged backorders can turn into a real drag on your margins before you even notice.
Every backorder is revenue you've earned but haven't collected yet, at least not fully. Some customers cancel while they wait, which turns a promised sale into a refund. Others delay repeat purchases because they're not sure you'll have stock next time.
That uncertainty ripples into your cash flow. When you can't reliably predict which orders will ship and when, planning your next purchase or production run gets a lot trickier.
Scale that up and the numbers get real. The IHL Group's research on inventory distortion shows just how much revenue slips away when stock and demand fall out of sync, which is why treating backorders as a controlled, deliberate process (rather than a constant scramble) matters so much for your bottom line.
Here's the part the panic-inducing headlines skip: backorders can actually work in your favor. Offered thoughtfully, they're a genuine growth tool, not just damage control. Here's why plenty of smart businesses choose to keep selling even when the shelf is empty.
The trick is to treat backorders as a deliberate strategy rather than an accident. When you decide in advance which products you're comfortable selling this way, you get all the upside with far less of the stress.
Managing backorders well comes down to a few habits. Nail these and your backorders become a minor footnote instead of a recurring fire drill.
The single biggest factor in a good backorder experience is honest, proactive communication. Tell customers up front that an item is on backorder, give them a realistic ship date, and update them if anything changes. Silence is what turns a patient customer into a frustrated one.
For example, imagine a customer orders a popular water bottle that's temporarily out of stock. A quick email at checkout ("Thanks! This one's on backorder and will ship by the 15th") followed by a shipping confirmation on the 13th makes the wait feel effortless. That's the whole game.
Your suppliers are your lifeline when stock runs low, so it pays to keep those relationships strong. Reliable suppliers who understand your business can prioritize your restocks, flag delays early, and sometimes expedite shipments when you're in a pinch.
For example, a small home goods brand that regularly shares its sales forecasts with a key supplier gets a heads-up the moment a component runs short. That early warning gives the brand time to adjust its promised backorder dates before a single customer is disappointed.
Trying to manage backorders with spreadsheets and guesswork is a recipe for stress. Inventory management software (IMS) gives you real-time visibility into stock levels across every channel, automates reorder points, and keeps your numbers accurate so backorders don't sneak up on you.
For example, a business selling on Shopify, Amazon, and in a retail store can use an IMS to sync stock across all three in real time. When a product dips below its reorder point, the system flags it automatically, so you can restock before an accidental backorder ever happens. That's exactly the kind of behind-the-scenes work we love to take off your plate.
Managing backorders is great, but preventing the unnecessary ones is even better. These three strategies help you keep more products in stock and more customers smiling.
Good forecasting is your crystal ball. By analyzing historical sales, seasonal trends, and market signals, you can predict how much of each product you'll need and when. Accurate forecasts mean you order the right amount at the right time, well before stock runs dry.
Modern tools make this easier than ever. AI-driven demand forecasting can spot patterns you'd never catch by hand, so you're planning with data instead of gut feeling. It can weigh seasonality, promotions, and long-term growth all at once, then tell you what to reorder and when.
The payoff shows up everywhere. Sharper forecasts mean fewer backorders, less money frozen in overstock, and a lot less last-minute scrambling to source products in a hurry. You spend less time firefighting and more time on the parts of the business you actually enjoy.
Safety stock is the buffer of extra inventory you keep on hand to cover surprises, like a sudden demand spike or a late supplier shipment. Think of it as a cushion that absorbs the bumps so your customers never feel them.
The goal is balance. Too little safety stock leaves you exposed to backorders, while too much ties up cash and warehouse space. The sweet spot depends on each product's demand patterns and lead times, which is exactly where good data earns its keep.
A simple way to start is to set safety stock levels for your best sellers first, since those are the products where a stockout hurts most. From there, you can fine-tune the buffer for slower movers so you're not sinking cash into inventory that rarely gets touched.
Regular inventory audits keep your records honest. By periodically comparing what your system says you have against what's actually on the shelf, you catch discrepancies before they trigger a phantom stockout or a surprise backorder.
Audits don't have to be a massive quarterly event, either. Cycle counting, where you check a small slice of inventory on a rolling basis, keeps your numbers accurate without shutting down operations. A little consistency here saves a lot of headaches later.
When your audits are backed by software that tracks every stock movement automatically, they get even easier. Instead of hunting for where the numbers went sideways, you can see exactly what sold, what shipped, and what's left, so catching a discrepancy takes minutes rather than an afternoon.
When you buy a backordered item, your order still goes through, it just won't ship right away. In most cases you're charged at checkout (though some sellers wait until the item ships), and you'll get an estimated ship date up front. From there, a good seller keeps you posted as the restock date gets closer, so you're never left guessing.
Usually, yes. Since a backordered item hasn't shipped yet, most sellers let you cancel it and get a refund before it leaves the warehouse. Policies vary, so it's worth checking the store's terms, and it's another reason clear communication about backorders matters so much.
Most of the time they do, but we'll be honest with you: it's not a guarantee. A backorder depends on your supplier actually restocking, and delays or cancellations can happen. That's exactly why setting realistic ship dates (and being upfront if something changes) keeps your customers trusting you.
It's a bit of both, and it really comes down to how you manage it. Handled well, backorders let you keep capturing sales instead of losing customers to an "out of stock" message. Ignored or poorly communicated, they can frustrate buyers and dent your reputation. The difference is honest communication and inventory software that gives you a clear view of what's coming in and when.
Be upfront about it right at checkout, so nobody's surprised after they've paid. Give a realistic ship date rather than an optimistic guess, and then proactively update customers if anything changes. A little transparency goes a long way toward keeping shoppers happy and coming back.
Backorders don't have to be the villain of your inventory story. Handled well, they're a way to keep selling, gauge demand, and protect revenue that might otherwise walk out the door. Here's what to remember:
Ready to spend less time chasing stock and more time growing? Cin7's cloud-based inventory management software gives you real-time visibility across all your channels, automatic reorder alerts, and AI-powered demand forecasting, so you can head off stockouts before they turn into backorders. We'll work alongside you to keep your shelves stocked and your customers happy. Request a demo and see how much smoother your inventory can run.