Backorders and pre-orders are a valuable part of the inventory management strategy. They help in increasing customer satisfaction, ordering the right supply for the demand and increases sales.
What Is a Backorder?
A backorder is an order for a product that cannot be fulfilled due to a lack of available inventory. Even though the item may not be available in the inventory at the moment, it could be in production, on its way from your supplier, or it may have to still be manufactured.
Backorders represent any amount of inventory your customers have ordered but have not yet received because it isn’t currently available.
Just because there may be a lack of inventory items, doesn’t mean companies can’t sell them. Instead of having to sell a “no”, keeping products on backorder helps the customer experience, and creates an increase in sales.
Backorders are an important factor in inventory management analyses. Keeping track of the number of backorders and the time it takes to fulfill orders provides insight into how well the company manages its inventory.
What is a Pre-order?
A pre-order is an order placed for an item that has not yet been released. Even though the item may not be available yet, the release date for the product has often been planned. Pre-orders guarantee customers immediate shipment as soon as the product is released. Also, manufacturers get an accurate prediction of how much demand there will be.
Pre-orders represent any amount of inventory your customers have ordered but have not yet received because the release date has not yet been reached.
Just because the product is not available yet doesn’t mean companies can’t sell that item. Instead of having to sell a “no”, and risking to lose the sale to a company that does allow pre-orders, allowing pre-orders helps the customer experience and creates an increase in sales.
How to work with Backorders and Pre-orders in Marello
To allow a product to be backordered or pre-ordered it’s necessary to set a product as such. This will allow the Sales Channels to sell the product even when there is no inventory available. When a customer places an order, the WFA rules will determine if the products in the order can be assigned to inventory in the warehouses. When this is not possible and the products are marked as a backorder and/or pre-order allowed product, the order row status will be set accordingly.
When product inventory becomes available in Marello, the system will look for orders that include order rows marked as a backorder and/or pre-order. It will process these orders and assign them to the appropriate warehouses for further fulfillment.
Additionally, Marello’s dashboard widget “Order items by Status” shows an overview of the current number of order rows with a backorder and pre-order status. Also, the Marello custom reports functionality can be used to create overviews of how many backorders and pre-orders there are, as well as giving a clear overview of their statuses.
Related Backorder and Pre-order Information
Learn more about backorders / pre-orders and how to configure them in Marello on the following pages: