Back Order

A back order happens when a customer places an order for a product that is temporarily out of stock. Instead of turning the customer away, the business accepts the order with the promise to ship it once inventory is replenished. This usually happens when demand for certain stock items unexpectedly spikes, there are delays in the supply chain, or a product simply sells out faster than anticipated.

What Is a Back Order?

Back order is a customer request for a product that is temporarily out of stock, which the seller accepts and fulfils once inventory arrives. Instead of cancelling the sale, the business records the order as owed and ships when stock is replenished.

Key Points

What to know:

  • Back order vs out of stock: a backordered item can still be bought, with an estimated shipping date, while an out-of-stock item generally cannot.
  • Customer commitment: the customer reserves a place in line, and the business commits to fulfilling the order.
  • Business benefits: back orders can support customer retention, cash flow and demand forecasting.
  • Management: businesses need to track which items are on back order, for whom, and keep customers updated.

For a full guide, read our in-depth guide to back orders.

Frequently asked questions

It can be both. On one hand, it indicates high demand for a product, which is great for business. On the other, it means the current supply can't meet that demand, which can lead to customer frustration if not handled well. Effective communication and a reliable system for managing backorder situations are key.