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How Much are You Losing on Back-Ordered Inventory?

October 21, 2015 Published by

Many ecommerce amateurs tend to think of back-orders as “sales about to happen.” But when you look at the big picture, the hidden costs behind backorders reveal why it’s important to have top-notch inventory management. [more] The longer a product stays on backorder, the longer you are dealing with:

Lost sales

If the product is not exclusive to your company, customers will move on to a competitor in order to get the product shipped faster.

Strained call center resources

The longer an item stays on backorder, the more customer calls you’ll receive asking either when the order will ship, or to cancel the order.

Warehouse and shipping costs

Let’s say a customer placed an order containing multiple products, one of which is backordered. The initial order is picked, packed, and shipped, but you’ll need to send the backordered item separately at your own expense. If you charge the customer twice for shipping on the same order, they may not return.

Processing costs

  • Administrative/overhead
  • Merchandising and inventory control
  • Expedited freight costs
  • Etc.

As you can see, managing inventory to maintain optimal levels of stock is critically important. At Fulfillment Works, our inventory management services utilize a dedicated team to ensure the availability of the right products at the right times to meet varying customer demands during periods of normal business, promotional spikes, and seasonal volume increases. With our inventory control solution, you are able to manage your overhead and control your costs by keeping in step with current inventory stock levels and accurately forecasting future demand. Contact us to learn more, and start recouping money from backorders today!