A backorder is an order for a product or service that cannot be fulfilled immediately due to a lack of available supply. The item may not be held in the companys current inventory, but it could still be in production or available from a distributor. Backorders are an indication that the demand for a company's product exceeds its supply. They may also be referred to as the company's backlog.
When a product is on backorder, it means that customers are pre-ordering a product that is temporarily unavailable. Customers can still purchase backordered items on a website, and they will be delivered as soon as they are back in stock. A SKU (stock keeping unit) that is on backorder indicates that customers are pre-ordering a product that is temporarily unavailable.
Backorders can be caused by various factors, such as poor planning, supply chain issues, overly strict policies on safety stock, or an unforeseeable spike in demand for an item. Companies with manageable backorders tend to have high demand, while those that can't keep up may lose customers.
