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How Backordering Can Make Your Business Easier?

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How Backordering Can Make Your Business Easier? – Everyone certainly dreams that his business is always busy. However, if it happens constantly, the business will often not be able to meet the needs or demands of customers continuously.

When the product is sold out, customers who don’t get the product they are looking for in the end have to bite their fingers and look at another store. If this is the case, over time, you will lose a lot of customers.

This time, you will not learn about how to have spare stock or predict future stock needs. If your product runs out and there are still customers interested in buying it, try applying this one technique!

Get to know the Backordering Technique

Backordering is a technique that allows your customers to order products in your business even if the products are out of stock or not in the warehouse. This technique or process is usually applied when there is a sudden spike in demand for a product. It’s good for you to alert this technique if there is a spike in demand from customers. Therefore, this technique will be crucial for you in the future.

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What Are the Benefits for Your Business?

1. Reduce Warehouse Costs

When customer demand starts to spike, you usually have some spare stock ready. However, if it turns out that customer demand is not as much as you think, you can experience problems due to overstocking, aka excessive storage in the warehouse.

Well, for that, backorder is here to solve this problem. With backorder, you can keep stock levels in the warehouse to a minimum and manage product requests on-demand, aka products will only be made when orders come in.

2. Reduce Damaged Products

What happens if the customer’s demand is lower than the goods available in the warehouse? Of course, this will make some items sit in the warehouse, even for a long time. 

The result is clear: products that stay too long in the warehouse will become stale or experience a decline in quality. If you have this, like it or not, you have to throw it away.

Backordering techniques help you prevent that from happening. This technique allows you to better manage the stock of goods in the warehouse with less risk because there is no excess stock, and you don’t have to waste stale stock.

3. Allow Custom Products

Who doesn’t like custom products or products that can be tampered with according to customer tastes and desires? Customization makes the customer freer to determine the product according to what he likes.

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Now, backorder allows you to give time for customers to customize products while you buy the raw materials or materials needed to produce your products. So, even if the product doesn’t exist yet, customers have time to customize the product according to their taste.

How does it work?

The backorder technique has two scenarios:

1. If the product is still available:

  • Customers place an order
  • Orders will be matched with items available in the warehouse
  • Goods are packaged and shipped to customers
  • The customer receives the ordered goods.

2. When the product is out of stock:

  • Business opens backorder
  • Every backorder is converted into a purchase order
  • Purchase orders are given to vendors or distributors
  • Vendors or distributors send goods according to purchase orders
  • Items received are then matched with orders
  • Goods are packaged and shipped to customers
  • The customer receives the ordered goods

How about Stockers? Simple, isn’t it? Even though the name seems complicated, the backorder technique makes it easier to manage your merchandise without a pile of goods in the warehouse.

However, it will be even easier for you to manage goods in the warehouse with a warehousing application like On stock! With a reminder feature for almost out and expired products, On stock will be perfect for those of you who are starting to use the backorder technique!

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