what is a backorder

A backorder is an order for a good or service that cannot be filled at the current time due to a lack of available supply. The item may not be held in the companys available inventory but could still be in production, or the company may need to still manufacture more of the product. Backorders are an indication that demand for a company's product outweighs its supply. They may also be known as the company's backlog. Backordered items are not on-hand at the time of sale but are expected to arrive at some point in the future. Customers can buy backordered items on a website, and they will be delivered as soon as they are back in stock. Companies normally inform customers that the product they've ordered is on backorder when the order is placed, and when delivery is expected. Backorders or a company's backlog may be expressed as a dollar figure or by the number of units ordered and/or sold. Backorders often require special accounting. When an order contains a backordered item, it can’t be packed and shipped immediately given the lack of physical inventory at the time. If there are other items in the same order that are in stock, the order may be split and shipped at different times, with the backordered items being shipped at a later date.