Does Backorder Mean Discontinued?

What is a backorder?

A backorder is when a product is temporarily out of stock but the retailer accepts orders in anticipation of receiving more inventory. Backorders occur when customer demand exceeds the available supply. The product is still available to order, but delivery will happen at a later date once new stock arrives.

There are several common reasons a product goes on backorder:

• Higher than expected customer demand
• Production or supply chain issues
• Discontinuation by the manufacturer
• Seasonal fluctuations in supply and demand

Backorders can last anywhere from a few days to several weeks or longer, depending on the product and circumstances. The retailer should provide an estimated time frame for when the product is expected to ship based on guidance from suppliers.

Backorder vs Discontinued

There is an important difference between a backorder and a discontinued product. When a product is backordered, it means the retailer has temporarily run out of that item but expects to receive more stock in the future. Customers can still place orders for backordered products. The retailer will ship the item once it becomes available again.

In contrast, a discontinued product is one that has been removed from the retailer’s offerings and is no longer available for purchase. The retailer does not expect to get more stock of a discontinued product. Once an item is discontinued, customers cannot place new orders for it. Any existing backorders may still be fulfilled while supplies last.

The key difference is that a backorder still allows customers to reserve the product for future shipment, while a discontinued product is permanently unavailable going forward.

Common reasons for backorders

There are a few main reasons why products go on backorder:

Sudden spike in demand – Popular products can experience a sudden surge in orders that exceed inventory. For example, a viral social media post about an item can drive an influx of purchases and quickly deplete stock. Retailers may not be able to keep up with the spike in real time.

Production or supply chain issues – Manufacturing delays, shortages of raw materials, shipping delays, and other supply chain disruptions can result in fewer products being available. With global and complex modern supply chains, issues anywhere along the chain can impact product availability.

Seasonal product going out of stock – Seasonal items like holiday decor or warm weather clothing often have a limited window of peak demand. Retailers aim to stock enough to meet demand without being left with excess inventory but can misjudge and sell out of popular items.

How long do backorders last?

The length of a backorder can vary significantly depending on the product and the reason for the backorder. Some key factors that impact backorder timeframes include:

Product type – Some products like clothing or small consumer goods may only be backordered for days or a couple weeks. But larger items like furniture or appliances could potentially take months to restock.

Reason for backorder – If it’s just temporarily out of stock, a backorder may be fulfilled in under 2 weeks once new inventory arrives. But if the product is discontinued or the supplier has manufacturing delays, backorders could drag on for months.

According to this article, the average backorder takes about 14 days to fulfill. However, that can vary widely in individual cases. High demand items or scarce products are more likely to have lengthier backorder periods. Electronics in particular tend to have long backorder times due to global supply chain issues.

Ultimately the timeframe comes down to the retailer’s supply chain and logistics capabilities. Customers should check with the merchant for backorder estimates specific to that product. Setting proper expectations upfront can help reduce customer frustrations with extended backorder waits.

Impact of backorders on customers

Backorders can be incredibly frustrating and disappointing for customers. When a customer places an order, they expect to receive their purchase in a timely manner. But with a backorder, the order is delayed, sometimes by weeks or even months. This leaves customers stuck in limbo, waiting on an item they already paid for ( source ).

When faced with a backorder, customers have to make a difficult decision – continue waiting on the delayed order or cancel it altogether. After already looking forward to the item, having to choose between these less than ideal options can turn customers off from shopping with that retailer again. The frustration of not receiving the purchase in expected time frame damages trust and satisfaction ( source).

In addition to frustration with the buying experience, backorders can also lead customers to seek substitute items from other retailers rather than wait. The longer the backorder, the more likely customers will look elsewhere to fulfill their needs ( source).

Retailer strategies for managing backorders

Retailers can employ several strategies to better handle backorders and minimize customer frustration:

Improved inventory management systems can help retailers avoid stockouts and backorders in the first place. Using data analytics to understand buying trends and predict popular items can allow retailers to stock extra inventory of top-selling products (Source). Having visibility into inventory across warehouses and stores is also key.

For items that do end up on backorder, retailers should focus on providing frequent order status updates to customers. Setting clear expectations through shipping estimates and tracking info helps ease worries about delayed orders (Source). Automated backorder emails and notifications are useful here.

Offering substitute items for products on backorder is another strategy retailers can use. This gives customers the option to receive a similar product sooner rather than waiting indefinitely. Retailers should make it easy for customers to accept substitutions or cancel backordered items if desired.

Customer options for backordered items

Customers have several options when an item they ordered is placed on backorder by the retailer:

• Wait for the item. Customers can opt to keep their order and wait for the backordered item to come back in stock. This allows them to still receive the specific product they originally wanted. However, there is often no firm timeline for when they will receive the item.
• Cancel the order. If customers need the item by a certain date or simply don’t want to wait, they can cancel the backordered portion of their order or the entire order. This allows them to seek out the item elsewhere if needed.
• Choose a substitute item. Some retailers allow substitution options for backordered products. Customers can choose to receive a similar or replacement item instead of waiting for the original one.
• Get a refund. Customers are entitled to request a refund on any items that the retailer cannot fulfill in a timely manner. Refunds free up their money to make purchases elsewhere.

Each option has its pros and cons. Customers should weigh factors like their time frame, product needs, and retailer policies when deciding how to handle a backordered item.

Best practices for retailers

Retailers can take some key steps to effectively manage backorders and keep customers satisfied:

Set proper expectations up front – Be transparent about the likelihood of a backorder and provide estimated timeframes. This helps manage customer expectations.

Provide frequent status updates – Keep customers in the loop with proactive notifications about order status changes. Fedex recommends providing status updates every 5-7 days.

Offer refunds or substitutions – Make it easy for customers to cancel backordered items for a refund or switch to an in-stock alternative. Providing options helps avoid losing the sale.

Prioritize getting back in stock – Use supply chain analytics and improved forecasting to minimize backorders. When they occur, make it a top priority to replenish inventory.

Best practices for customers

If you find yourself dealing with a backordered item, here are some tips on how to handle it smoothly as a customer:

Be patient. Backorders can happen due to reasons out of the retailer’s control, like supply chain issues or unexpected demand spikes. Recognize that the retailer likely wants to fulfill your order as soon as possible.

Ask about estimated restock times. Reach out to customer service and inquire when the item is expected to be back in stock. This allows you to gauge if you’re willing to wait or want to consider other options.

Consider substitute items. See if there are any similar products in stock that could work instead. Retailers will often suggest alternatives.

Cancel if needed. If the backorder timeline is too long for your needs or the item is no longer wanted, cancel the order. Just know cancellation can take 1-3 billing cycles to process depending on the retailer’s policies.

The Bottom Line

In summary, a backorder is when an item is temporarily out of stock but still available for purchase with delivery delayed. It differs from a discontinued item, which is no longer being made or sold. Backorders occur due to supply chain issues, unexpectedly high demand, production delays, or other problems with inventory.

The key takeaway for retailers is to clearly communicate with customers about backordered items, provide estimated timelines, and offer alternative options to improve the customer experience. Retailers should streamline backorder management through inventory software, supplier collaboration, and order optimization strategies.

For customers, the main thing is to understand that a backorder will ship later but is not cancelled or refunded unless you request it. Track the status online, look for retailer updates, and reach out if your wait seems excessive. Consider whether you want to wait for the backordered item or cancel for a refund.

With proper communication and transparency from retailers, and patience and flexibility from customers, backorders can usually be resolved satisfactorily despite the inconvenience.