It’s frustrating, but it happens to every retail store owner. You try to order something you need to stock your displays, but then you see “backorder.” 

What does it mean for an item to be backordered? Is there anything you can do to manage items that are delayed or out of stock?

The good news is that yes, you can take action. It’s important to implement the right strategies so that your customers trust that they can find high-quality items in your shop on a regular basis.

Here’s what you need to know!

Backorders Meaning

What is a backordered item? A backorder is an item that your supplier does not currently have in stock but will have available in the near future. If you order something that’s backordered, you can expect your order to be on the list to be fulfilled as soon as the item is available again.

Just because your supplier doesn’t have an item at this moment does not mean that your customers can’t buy it. It just means that if you take an order for the product, the customer will have to wait a little longer in order to receive it.

The exact length of time a backorder takes will depend on why it’s out of stock and how quickly the supplier can get it back, but often you can expect about 14 days. Before you promise a delivery date to your customer, ensure you talk to the supplier to get an accurate estimate.

Should Your Boutique Accept Backorder Purchases?

You don’t have to accept purchases of backordered items from customers, but if you do there are a lot of benefits. Because you’re a boutique, you’re more likely to carry unique items that customers are willing to wait for. Backorders don’t work as well for chain stores because a customer can go buy something similar at another location.

Before you accept backorders, make sure your customers understand the extra shipping time. Also, you’ll need a software system that can track the backorders and keep customers informed about the expected delivery date. 

Backorders help your store get cash right away, gives you information about what products have strong demand, and can help you build a relationship with your customer immediately instead of waiting for the product to be back in stock. Just make sure you can meet the customer’s expectations when it comes to customer service and order updates.

How to Manage Out of Stock Inventory

Sometimes an item isn’t backordered, it’s simply out of stock. What is “out of stock”? That means the supplier doesn’t have it and also doesn’t know when — or if — it will be back.

Unfortunately, COVID-19 caused a lot of unexpected out-of-stock issues, but it can happen at any time. It’s important to know how to manage inventory so that you can minimize out-of-stock items and keep your boutique going strong.

Understanding Inventory

What is inventory? Inventory is the stock that you have available to sell right now. It’s classified as an asset on your balance sheet, but inventory can also age and become less valuable or even obsolete. 

As a result, you want to ensure that you have the right level of inventory to keep your customers happy without losing money to outdated clothing or having to cut prices significantly in a clearance sale. You can use the retail inventory method to calculate how much stock you need to keep on hand and when you should order more.

Avoiding Out-Of-Stock Items

When an item is out of stock, you can’t sell it and you may lose money and customers. Some causes of out-of-stock items are outside your control — after all, no one could have foreseen or prevented COVID-19 from impacting the world.

However, there are a lot of causes you can control. One of the biggest causes of items being out of stock is inaccurate data. If you don’t use an up-to-date inventory system connected to your point of sale, it’s possible that you won’t know when you’re about to run out of stock.

Another common problem is failing to reorder popular products in time. To avoid this, identify the sales patterns of each of your products. Notice when they tend to be low, and make sure you order around this time. You can also forecast the demand for various products and ensure you have enough to meet that demand.

Finally, people management is a frequent concern with boutique stores. You need people that you can trust who will move stock from the back to the shelves consistently, while also understanding the data in the inventory system so they can take action if a new trend emerges.

Manage Your Boutique’s Backorders

Taking backorders and avoiding out-of-stock items takes some diligence, but with the right software and strategies, you can stay on top of your inventory.

If you enjoyed this article, be sure to check out the rest of our site for more information about how to run a successful boutique!