What is Backorder in Retail? Explained

A backorder in the retail industry occurs when a customer places an order for a product that is temporarily out of stock or unavailable. In such cases, the retailer allows the customer to proceed with the purchase, promising to fulfill and deliver the item once it becomes available again. Backorders enable retailers to manage inventory more efficiently, maintain customer satisfaction by accommodating demand, and avoid losing sales opportunities. Retailers typically communicate transparently with customers about the backorder status, providing estimated delivery times and updates to manage expectations during the fulfillment process.