What Is a Backorder?

A backorder is a customer order for a product that's temporarily out of stock, accepted with a promise to ship once new inventory arrives. Here is the definition, how it differs from a stockout, and how to manage it without losing customer trust.

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01 — Overview

Backorder, defined

A backorder happens when a customer places an order for a product with 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: the order exists in the system before the inventory that will fulfill it does.

SO-8841 — Canvas Tote, NavyBackordered
Available now0 units
Ordered6 units
Expected ship dateSep 22
Order accepted despite zero stock — replenishment PO already placed

Zero on hand

The item has no available quantity right now.

Order accepted anyway

The sale is taken, not blocked, with a future ship date.

Tracked separately

Backordered quantity is kept apart from available stock.

A deliberate choice

Not every stockout becomes a backorder — it is a judgment call.

A backorder is an order taken for an out-of-stock item, on the promise it will ship once replenishment arrives — it is a sales decision, not just an inventory state.

A stockout describes the inventory (zero on hand); a backorder describes what you do about a sale when that happens — accept it anyway with a later ship date, instead of turning the customer away.

Backorders work when lead time is predictable and communicated clearly. They erode trust fast when the promised date keeps slipping, so most teams cap how long an item can stay backordered before flagging it for review.

02 — Vs. stockout

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.

Every backorder started as a stockout — not every stockout becomes one

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. 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
  • Whether to backorder is a per-product or per-order judgment call
Stockout only
Available0
Blocked
Sale not accepted — customer sees "out of stock"
Stockout + backorder
Available0
Accepted
Order taken anyway, with a future ship date
Every backorder started as a stockout — not every stockout becomes a backorder

For the inventory-state side of this, see the full stockout guide.

03 — Managing it

Managing backorders without losing customer trust

The single biggest driver of backorder complaints is a promised date that turns out to be wrong.

Base the date on real lead time

Not a hopeful guess — use your actual supplier lead time, and update the customer proactively if it slips rather than waiting for them to ask.

Track backordered qty separately

So the rest of the team is not misled into thinking the item is in hand when it is really still on order.

Flag a backorder before the customer has to ask

Set a threshold based on your normal supplier lead time — twice the expected lead time is a common default. Past that point, proactively send a new estimate or offer a cancellation rather than leaving the order open indefinitely.

  • Threshold set relative to normal lead time
  • Proactive update beats a customer complaint
  • Offer cancellation once the wait is clearly unreasonable
Days backordered vs. review threshold
SO-88414 / 10 days
SO-879012 / 10 days
SO-8790 passed its threshold — needs a status update or cancellation offer

04 — Fulfillment order

Oldest backorders fulfilled first

When new stock arrives, fulfill the oldest backorders first (first-in, first-fulfilled) unless a specific customer commitment says otherwise.

A predictable queue beats arbitrary allocation

New stock should flow to whichever backorder has been waiting longest for that SKU, not to whichever order happens to get processed first. Set a review threshold too — if an item has been backordered longer than its normal lead time, it needs a status update or cancellation offer, not silence.

  • First-in, first-fulfilled by default
  • Exceptions only for explicit customer commitments
  • A review threshold catches orders waiting too long
Order — oldest firstQtyStatus
SO-8801
Placed Aug 30
2Fulfilled
SO-8814
Placed Sep 03
1Fulfilled
SO-8841
Placed Sep 09
6Backordered
SO-8850
Placed Sep 12
3Backordered
New stock fills SO-8841 before SO-8850 — first-in, first-fulfilled

05 — Vs. related terms

Backorder vs. preorder vs. waitlist vs. dropship

These all involve selling something you don't have on hand yet — but for different reasons.

TermWhat it means
BackorderStock existed, ran out; the order is accepted anyway with a future ship date.
PreorderStock never existed yet — usually for a product that has not been released or produced.
WaitlistNo order or payment taken yet; the customer is notified when stock returns, then orders.
DropshipThe seller never stocks the item — a third party ships directly to the customer.

For the full comparison including consignment, see consignment vs. backorder vs. dropship.

06 — Pitfalls

Where backorders erode trust

Most backorder complaints trace back to one of these mistakes.

Guessed ship dates

A hopeful estimate instead of the real supplier lead time sets up a broken promise.

Silent slippage

Waiting for the customer to ask instead of proactively updating them when a date moves.

No fulfillment order

Allocating new stock arbitrarily instead of oldest-backorder-first breeds unfair delays.

Backordering everything

Allowing backorders on fast-moving or low-margin items where a slipping date costs more than the sale is worth.

07 — Software

How software supports backorder management

The mechanics are simple; the discipline of tracking them consistently is what software actually provides.

PO tracking

See replenishment orders in transit alongside backordered sales.

Separate tracking

Backordered quantity kept apart from what is actually on the shelf.

Low-stock alerts

Catch a stockout before it happens, reducing how often backorders are needed at all.

Order history

A timestamped queue so oldest-first fulfillment is easy to follow.

StockFlow's real-time stock and order tracking give you the visibility backorder management needs — free for up to 25 products.

Frequently asked questions

What is a backorder?

A backorder is a customer order for a product that's temporarily out of stock, accepted with a promise to ship once new inventory arrives. It's different from a stockout: a stockout is the inventory state (zero on hand), a backorder is the order you still took anyway.

What does back ordering mean?

Back ordering (or "backordering") is the practice of accepting orders for an item that currently has zero available stock, committing to fulfill them once new stock arrives from a supplier or production run, rather than blocking the sale.

What is a backorder in simple terms?

A backorder is a customer order accepted for a product that has zero units in stock right now, with a commitment to ship it once new inventory arrives from a supplier or production run.

Is a backorder the same as being out of stock?

No. Being out of stock (a stockout) describes the inventory state. A backorder is what happens when you accept an order anyway despite that stockout, rather than blocking the sale entirely.

What is backorder management?

Backorder management is the set of practices that keep backorders from eroding customer trust: basing ship-date estimates on real supplier lead time, tracking backordered quantity separately from available stock, fulfilling the oldest backorders first when new stock arrives, and setting a review threshold for orders that have been waiting too long.

What are the causes of backorders?

A backorder happens whenever demand outpaces available stock and the seller chooses to accept the order anyway — commonly triggered by a demand spike beyond forecast, a reorder point set too low, a late supplier delivery, or a made-to-order item that is backordered by design rather than by surprise.

How long should an item stay backordered before I do something about it?

Set a threshold based on your normal supplier lead time — for example, twice the expected lead time. Past that point, proactively update the customer with a new estimate or offer a cancellation rather than leaving the order open indefinitely.

Should every out-of-stock product allow backorders?

Not necessarily. Backorders work best for items with predictable, communicated lead times. For fast-moving or low-margin items where a slipping date causes more complaints than the sale is worth, many businesses simply block the sale instead.

What order do backorders get fulfilled in?

Most teams fulfill backorders first-in, first-fulfilled: the oldest backorder for a SKU gets the next unit of new stock, unless a specific customer commitment says otherwise. This keeps the queue fair and predictable rather than allocating new stock arbitrarily.

Track backorders alongside real-time stock

StockFlow keeps replenishment orders, stock levels, and sales orders in one place — free for up to 25 products.

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