Backorder
Also called back order
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is backorder?
A backorder is the quantity on a customer’s order that a distributor has agreed to supply but can’t ship yet, kept open until stock arrives. Backorders are what a stockout leaves behind when customers choose to wait, and each one stays on the open order report until it ships or is cancelled.
How it works
When an order is short, the CSR agrees with the customer whether to ship partial or hold everything until it can ship complete, and gives an expected date based on available to promise. As stock arrives, it is allocated across waiting backorders, by order date or customer priority, and each allocated line is released to the warehouse.
Buyers meet the same thing from the purchasing side when a manufacturer ships a distributor’s PO short. Those open PO lines set the dates CSRs can promise, and a long supplier backorder may lead the buyer to a second source or the CSR to a substitute.
Backorder example
A customer orders ten pressure switches when six are available. Six ship today; four stay on backorder against a supplier delivery due Thursday, which is the date the CSR gives the customer.
Related terms
- Partial shipmentA partial shipment is a delivery that includes only part of an order, with the rest shipped later once it is available.
- StockoutA stockout is a situation in which a distributor has none of an item available to sell when a customer wants it.
- Available to promise (ATP)Available to promise (ATP) is how much of an item a distributor can commit to new orders by a given date, including incoming stock not yet promised.
- Fill rateFill rate is the percentage of ordered goods a distributor ships straight from its shelves on the first delivery, before any backorders arrive.
- Open orderAn open order is a sales order or purchase order that hasn’t yet been fully shipped, received or closed.
