As an eCommerce business owner, you know you lose money when you’re out-of-stock. Stockouts cost US and Canadian retailers an estimated $350 billion every year. In addition, according to IHL Group, retailers lose almost $1 trillion in sales each year due to out-of-stock items, with $144.9 billion lost in North America alone. It seems like the data tells us that 'out-of-stock' is quite a big deal, doesn't it? So, what can save your store then?

Backorders! 🦸‍♂️ When you're out-of-stock, it lets you keep making sales and, accordingly, profit. It's like having a secret weapon in your eCommerce game.

Not quite! There are plenty more benefits that backorders can bring to your eCommerce store. Let's dive in together and explore them all!

How Does the Backordering Process Work?

Backorder is a process in which you allow customers to place orders for products currently out of stock. When a product is on backorder, the customer is securing their purchase, but the product will be delivered later when it becomes available.

Here's how backorder works:

1️⃣ Product is Out of Stock: Customers can place a backorder When they want to buy a product that is currently out of stock.

2️⃣ Order Placement: The customer places the order and makes the payment as usual, even though the product is not in stock.

3️⃣ Reservation: The system reserves the ordered item for the customer, ensuring they receive it once new stock arrives.

4️⃣ Wait for Restock: The business waits for the manufacturer or supplier to restock the product.

5️⃣ Fulfillment: Once the product is back in stock, the business fulfills the backorders, shipping the reserved items to the customers who placed them.

Backordering helps your business manage customer demand during stock-outs and provides customers with the opportunity to secure items, even if they are temporarily unavailable. It can be an effective way to maintain customer satisfaction and generate cash flows while waiting for restocks.

📌 You can also read How Does Backorder Work for more detail.

Backorder Benefits for Your eCommerce Store

There are a lot of benefits backorders bring to your eCommerce game. Some help for out-of-stock moments, while others let you turn backorders into a winning strategy. So, what are these benefits? Let's uncover them together and level up your business game!

📦 Reducing Stockouts and Overstock Issues: Backorder lets your customers buy products temporarily out-of-stock, ensuring they don't miss out on what they need. Just picture it – without this option, they might wander off to check what our competitors have to fulfill their immediate needs. Allowing backorders also prevents overstocked products, optimizing stock levels for efficient operation. Backorders keep things smooth and keep your customers smiling!

❤️ Building Customer Love: In October 2021, online shoppers saw over 2 billion messages indicating out-of-stock items, probably leaving store pages unhappy. Offering backorders demonstrates a commitment to customer satisfaction. It shows that you are willing to meet customer demand, even when stock is temporarily unavailable, which can contribute to building and maintaining customer loyalty.

💸 Increased Cash Flow: There are several ways of using backorders; one is turning them into a strategy to make more profit. Backorders provide a steady stream of incoming orders, allowing businesses to maintain a consistent cash flow even when certain products are temporarily unavailable. This can contribute to financial stability and flexibility. To understand this profit mechanism of backorder better, you can read Backorder as a Cash Flow Generator.

🕘 Enhancing Sales Predictability: The data collected from backorders can offer insights into product demand patterns. This information aids in forecasting and planning inventory levels, making future sales more predictable.

📌 Wondering how you can manage backorders in your Shopify store? Then you can read Backorder Management on Shopify & Best Practices.

Boosting eCommerce Backorder Efficiency 💰

Let's say you've decided to use backorders. However, since Shopify doesn’t have this capability, you've started using Fabrikatör as your Inventory Management Assistant. Now, how do you make the process even more efficient? Taking advantage of the backorder’s benefits becomes a breeze with these tips. Here are the game-changing recommendations we've put together just for you.

Communication is the key: In today's e-commerce world, notifications are like friendly notes that connect online stores with customers. By keeping things transparent and involving them in the process through notifications, it's like saying, 'Hey, your favorite product is back!' 🔔 Letting customers join a waitlist for items adds to the excitement. And if there's a delay, a heads-up goes a long way. Share the reasons, give realistic timeframes, and watch the magic happen – happy customers making informed choices means more sales and more money in the pocket!

Let Them Know ‘’You’’ Better: Did you know that, the average person spends 147 minutes daily on social media according to Statista? Tap into the power of social media to connect with your customers. Share sneak peeks behind the scenes, customer success stories, and updates on the production journey to keep the excitement alive. 🤳 Boost confidence in backordered items by spotlighting positive customer reviews and offering exclusive product previews. Shine a spotlight on the features and benefits to keep potential buyers intrigued and eager to purchase. Social media is your stage – make the most of it to foster engagement and drive sales!

Make Them Feel Exclusive: Implement referral programs where existing customers can invite their friends to backorder and gain rewards with referral programs. Moreover, being exclusive should have its perks! 🌟 You can offer exclusive access to the backordered product for a selected group, such as loyalty program members or subscribers. You can also give them special discounts, which adds a sense of exclusivity. 👑

Up Your Sales Game with Bundle Deals, Limited-Time Offers, Anticipation, and Preorder:

• With bundles, you feature the backordered item and throw in perfect companions, making it still highly desirable for customers to buy from your store and grab a delightful package. 🛍️
• You can also introduce limited-time promotions 🚨 for customers who place backorders within a specific timeframe. Not only does this create a sense of urgency, but it also fuels the Fear of Missing Out (FOMO), encouraging early commitments.
• Build excitement around the backordered product by creating anticipation. Dive into teaser campaigns, countdowns, or sneak peeks that will have your customers on the edge of their seats. 🔥
• Offer pre-order options for customers eager to secure the product in advance. Enjoy enticing perks like exclusive accessories or early access – because being an early bird comes with its rewards! 🎁
• Use Backorder/Preorder as your market detective! Wondering how? Well, it lets customers show interest in products before they hit the shelves, giving you a sneak peek into their interests. This insight helps you stock up on the star items and regulate your inventory to match exactly what your customers love! 🕵️

If you want to learn more about backorder and preorder, you can now download our Ultimate Guide: Backorder/Preorder! 🚀

Elevate Your eCommerce Store with Fabrikatör!

Fabrikatör provides all the benefits of backorders and it seamlessly integrates with your Shopify store. With Fabrikatör, you can fully automate and utilize features like backorders and so much more to increase your profits efficiently.

⭐ Fabrikatör helps you to use backorders as a lifesaver 🛡️, enhancer 🚀, profit-maker 💰, and customer relationship feature 💬 How? Let’s discuss this briefly together!👇

🎉 Exciting news is that Fabrikatör is proudly rated 5/5 on the Shopify App Store. Our users love it, and we're confident you will, too. Book a demo today and unlock the incredible benefits for your Shopify store!