What is a backorder?

A backorder is a promise made against stock you don't have yet. The customer commits, the business commits, and fulfillment waits on the next receipt. Done well, backorders preserve sales that a flat "out of stock" would lose. Done badly, they generate the worst kind of customer service work: explaining for the third week running why the part hasn't shipped. The operational requirements are specific. The system needs to distinguish on-hand quantity from available quantity, so a unit promised to a backorder doesn't get sold twice. It needs the incoming PO linked to the waiting orders, so when the truck arrives, receiving knows that 12 of the 50 units on the pallet are already spoken for. And it needs honest dates: a backorder quoted from the supplier's actual lead time beats an optimistic guess that slips twice. Where teams trip: treating backorders as a free pass to understock. Persistent backorders on the same SKU are a signal, not a workflow. If an item backorders every month, the reorder point is too low or the supplier's lead time has drifted, and the fix belongs in the replenishment settings rather than the apology email.