4 Tips to Deal With Backorders.
Customers never like it when retailers say, “Sorry, your order is in backorder.” It is quite frustrating for customers to keep waiting for their orders. But it is equally irksome for retailers to deal with supply chain challenges only to find their products held up at docking stations or yards or in shipping. There are many ways to deal with backorders. Here are a few ways to ensure that you can easily deal with backorders.
1. Don’t process the sale transaction for out of stock items.
If a customer places an order for a product on the backorders list, it might be a good idea not to complete the transaction and deduct charges until the item is actually available. Doing this would mean that the customer can hold onto their money until the stocks are replenished. That also saves you from the cost and hassle of refunds in the event a customer decides to cancel the order. Many times, if a customer has to wait a little, they prefer cancelling the order. It will happen, so make it easy on them and on yourself!
2. Change the status game.
Keeping the status of a product not on stock as a backorder could affect your reputation, especially if you are dealing with some serious supply chain challenges and are unsure when the stocks will be replenished. This was seen by most businesses during the COVID-19 Pandemic.
When you don’t have a reliable method to confirm the number of orders received for items not available, it might not be a good decision to name them as backorders. Instead, it might be in your best interest to change the status to out of stock. This is especially meant to retain customer trust. Remember, customers always want to have a timeline with regard to when the product will be back in stock. So, you need to show the status as out of stock and if possible, also add a note saying “Stock replenishes every 2 weeks…” or something like that. That lets your customers know that they will be able to order at a later date or they may just be comfortable with the wait and order right away and then wait.
3. Give them something to cheer about.
You want repeat business but with backorders, this might not be possible. However, offering special discounts to customers to entice them to purchase again is a good idea. This is especially true if they have shown interest in an item that is unavailable but you want them back when you restock the item. Offering discounts or special offers is one way to thank them for patiently waiting for the product to be back in stock.
4. Evaluate your internal processes.
If you are frequently dealing with backorders, then the problem is not always with the supply chain. Instead of considering it a supply chain challenge, introspect and evaluate your internal processes. Are there any inefficiencies or weaknesses that your business process is affected with? Are you having problems with Inventory Management? This might be the reason that you don’t realize things are out of stock. This could be due to poor planning or a sudden spike in demand. Taking a closer look might help you find the root cause of the problem and deal with backorders effectively.
The bottom line is that you always need to be on top of inventory management. You should know what stock you hold, what you have sold, and what is incoming. You must be able to forecast inventory needed for future sales and be able to order ahead and ensure backorders don’t cause serious inventory problems.
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