What is a backorder?

A backorder is an order that is meant to be fulfilled using products that are currently unavailable or out of stock (OOS).

Backorder management approaches

If you receive an order and some or all of the products are out of stock, there are a few approaches to consider.

  • One approach is to fully refund the customer who placed the order and cancel the order.
  • Another approach is to partially refund the order and fulfill only the currently available products.
  • A third approach is to offer your customer exchange alternatives in place of the OOS products. These can be useful when a customer is not willing to wait for products to be available or you simply do not plan on or are unable to reorder the OOS products.

However, what do you do when you have a loyal customer who is willing to wait for the whole or part of the order? In that case, you can use single or multi-shipment backorder fulfillment approaches.

Multi-shipment backorder fulfillment

To complete a backorder over multiple shipments, partially fulfill the order by shipping the available products first. SKULabs automatically sets the status of the orders with Partially shipped status.

Then, to make it easier to identify the orders waiting on backordered products, mark them by assigning a "Backorder" tag. Creating a tag to filter and identify backorders quickly is immensely valuable later on when you are ready to fulfill them.

Once the backordered products are back in stock, simply complete the backorder by shipping the remaining items on the backorder.

Single shipment backorder fulfillment

If the customer is willing to wait and receive the whole order at once, the first step is to assign backorder tag to the order. Then, you have two fulfillment options to consider.

One option is to pick and fulfill all items in the order once the backordered products are back in stock. However, what if some of the products that were in stock become unavailable or OOS while waiting on the remaining backordered products?

Prevent this from happening by picking and setting aside available products for the backorder. Then, once the remaining products are back in stock, complete the process by picking the rest of the order and shipping the whole order together.

Picking and put-away process for backorders

Picking available products and putting them away prevents selling them out while waiting on the backordered products.

The first part of this process involves activities that take place in your warehouse to pick, organize, and store backorders.

  1. Dedicate a space in your warehouse to store picked backorders.
  2. Use a separate container to store products for each backorder to prevent product mixup between orders.
  3. Place order identifier, such as a packing slip, in the container to easily and correctly identify which order the products in a container belong to.
  4. Consider grouping backorders waiting on the same product to save time and effort when fulfilling the backorder once that product is back in stock.

The second part of this process involves deducting on-hand count for picked products. When the available items are picked, on-hand count must be deducted for the order. On hand can be deducted by either adding a manual shipment or scan deducting the order.

Adding a manual shipment

One way to deduct on-hand for picked items is adding a manual shipment for accounts that use per-shipment deduction method.

Scan-based deduction

For accounts that use scan-based deduction method, simply scan verify the available products and the would automatically be deducted for you. For accounts that always scan verify orders, using per-scan deduction method is recommended.

For more information on which deduction method is best suited for your operation, please contact SKULabs support.

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