Backorder

How a backorder works

When an order is allocated, any quantity the warehouse can't cover becomes a backorder line. The available part can ship now, and the rest waits for the next receipt.

For example, a distributor orders 48 cases of brake pads, BRK-220. The warehouse has 30. It ships 30 today and backorders 18. When the next purchase order is received, the 18 cases are allocated to that customer before new orders take them, as long as the backorder has priority.

Backorders vs out-of-stock and preorders

An out-of-stock product simply can't be sold. A backorder is accepted demand you have committed to fill. A preorder is a sale taken before the product has ever been in stock, such as a new launch. All three change what customers are told, so sales channels should show the difference.

Backorders are useful for B2B customers who plan around orders and prefer partial deliveries. They are less useful for consumer orders, where a customer may prefer a refund to a two-week wait.

Why backorders matter and common mistakes

Backorders are a direct signal of stock that is too low. They lower your order fill rate and often cost extra shipping when the balance ships separately.

• Letting new orders take incoming stock ahead of older backorders.
• Not telling the customer about the split, so they report a short shipment.
• Ignoring backorder volume when setting safety stock.
• Leaving tiny backorders open for months instead of cancelling with the customer's agreement.

How NextStock handles backorders

NextStock's allocation creates backorders for quantities it can't fill, and you can split remaining demand so the available part ships now. Fill rate is part of the KPI reports, and replenishment suggestions account for demand, so recurring shortfalls show up when you plan purchases. See order picking and purchasing and replenishment.