What a backorder is
A backorder happens when a customer places an order for a product that has zero units available, and the seller accepts the order anyway rather than rejecting it outright committing to ship once new stock arrives from a supplier or production run.
This is a deliberate choice, not an accident: some businesses backorder by default (especially for made-to-order or high-lead-time items), while others only backorder when a customer explicitly agrees to wait. Either way, the order exists in the system before the inventory that will fulfill it does.
Backorder vs. stockout: what is the difference
A stockout is the inventory condition available quantity has reached zero, full stop. What happens next is a separate decision. If you simply block the sale and show "out of stock," that is a stockout with no backorder. If you let the customer order anyway with a promised ship date, that stockout has become a backorder.
Practically, this means every backordered item started as a stockout, but not every stockout becomes a backorder some businesses never backorder low-margin or fast-moving items, since a slipping ship date on those causes more complaints than the sale is worth.
- Stockout: available quantity is zero, no order exists yet
- Backorder: available quantity is zero, but an order was accepted anyway with a future ship date
- Not every stockout becomes a backorder; that is a per-product or per-order judgment call
How to manage backorders without losing customer trust
The single biggest driver of backorder complaints is a promised date that turns out to be wrong. Base the ship-date estimate on your actual supplier lead time (not a hopeful guess), and update the customer proactively if that lead time slips rather than waiting for them to ask.
Track backordered quantity separately from available stock so the rest of the team is not misled into thinking the item is in hand. When new stock arrives, fulfill the oldest backorders first (first-in, first-fulfilled) unless a specific customer commitment says otherwise, and set a review threshold—if an item has been backordered longer than its normal lead time, it needs a status update or cancellation offer, not silence.