How to Handle Backorders with Minimal Complications

Any business that sells products to customers has the option of offering a backordering process. In this case, a customer can order a product that is not currently in stock and receive the item once it comes in. Backorders can be tricky because they rely on future events that may not always work out. Nevertheless, there are some steps you can take to make this process as painless as possible for everyone involved. Follow the guide below to learn how to handle backorders with minimal complications.

Explore Different Ways to Hold and Accept Backorders (from the Customer Side)

There are a number of different ways you can go about accepting backorders. You need to figure out which option works best for your products, your customers, and your business as a whole. You could…

  • Have customers request notifications for when an item comes back in stock, but do not take their money or any reserve payment. This is ideal for times when you are not sure if you will be able to get a product back in stock.
  • Accept payment for a product and provide an estimated date for when the item will be back in stock, but do not withdraw the money from the person's account until you officially process the order. This puts you at risk if the customer does not have money when it comes time to process the order, but it also prevents you from taking money for an item you do not and will not have.
  • Process the payment completely and provide an estimated shipping date, if this is an item you are confident you will get back in stock.

It's always better to underestimate and over-deliver, so try to adjust your backordering process to provide the highest level of customer satisfaction. Assess your abilities as the provider, and make sure your backordering matches them.

Let Your Inventory Management System Do the Work for You

To avoid the risk of human error, you can set up your inventory management system to do a lot of the work for you. For instance, you can set up reorder points that automatically determine when you need to reorder inventory. The program will use data from previous months and years to ensure that you are stocked to meet your projected demands. This will help you proactively manage your inventory so backorders don't have to occur.

Another way you can use your inventory management system is by setting it to auto-schedule inventory orders for high-demand items. You can look over your inventory reports regularly to determine how often you need to set these auto-orders, and then you can let the program take care of the rest.

Communicate with Your Customers Frequently

Having a solid organization scheme will not only improve the productivity levels for your warehouse, but it will also keep your employees safe. The better organized you are, the easier it is for your employees to find and put away items in the warehouse. This leads to less time spent wandering around and running into one another. Your labeling system will play a critical role in the success of your warehouse's organization, so make sure that all of your products are properly labeled. Get an efficient inventory management system that is compatible with your labeling program, and you will see great success across the board.

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