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Dealing with Backorders

by Chris Malta

It's going to happen. If you're selling on the Internet, there are going to be backorders.

When you use Drop Shippers, there is always the possibility that your Drop Ship Supplier will run out of something that you have for sale on your Internet Store or Auction. That's a "Backorder" situation. You sell the product, and suddenly find out that your Drop Ship Supplier can't deliver it for you because they are out of them temporarily.

When you use Bulk Wholesalers, the same thing can happen! Yes, even though you have your own Product Inventory stored at your house, your customer may end up backordered. How?
Let's say you're selling Blue Widgets, Green Widgets and Purple Widgets on eBay. You're getting a bit low on the number of Widgets you have in stock, so you've placed an order for 100 more of each color Widget with your Bulk Wholesaler. It's due to be delivered tomorrow.

You have 25 Purple Widgets left, and suddenly ABC Evening News runs a story on what a wonderful product Purple Widgets are. Suddenly everyone has to have one, and in one night, your Auctions sell 75 Purple Widgets.

'Well, no problem', you think. "I have another 100 Purple Widgets being delivered tomorrow".

So, you collect payment for all 75 Purple Widgets, and plan on shipping them out tomorrow when your bulk order shows up.
The next day, the order from your Bulk Wholesaler shows up. There are 100 Blue Widgets in the box, and 100 Green Widgets as well. There are no Purple Widgets to be found.



On the Packing Slip that came with your bulk order, you see that the 100 Purple Widgets you ordered have been backordered by your Supplier.

So, you have only 25 Purple Widgets left to fill 75 orders. Fifty of your customers will be backordered.

If it sounds far-fetched, it isn't. That's part of business, folks. Products get backordered. It happens. The important thing about this situation is that you deal with it well.
There will be other things besides backorders along the way that will cause problems in supplying or dealing with your customers. Again, that's just the way business goes.

Sometimes, you end up with a customer that just doesn't understand that, and that's a "Problem Customer"
As I write this, I have just finished dealing with a backorder situation, and steam is still rising from my ears.

By now, I should be used to it. I shouldn't let the little things get to me. It's not the Supplier that I'm upset with. It's the customer. Let's start from the beginning.
Recently, I handled an order for a Conair Digital Blood Pressure Monitor.

As usual, I emailed the order off to the Conair distributor with several others.

Later that day, I received a phone call from the Conair Supplier. The BP monitor was out of stock, but was expected within 10 days. Did I want to place the product on backorder, or cancel the order altogether? Also as usual, I told the Supplier I would get back in touch with them after checking with the customer.

Since the customer was located in Orlando, it was a local call. I called his house. I identified myself, told him that I had received his order, and that I was very sorry, but the product had just run out of stock, and was expected to be available again in 10 days. I told him I had not yet charged his credit card, and would cancel the order if he preferred to go somewhere else.

You would have thought I had just told him that I was planning to strangle his cat. He got upset, and I could just hear his face turning purple. Small wonder the man needed a blood pressure monitor. I'll spare you the details. It came down to this: he thought that I should give him free shipping for his inconvenience. I stuck to my guns, and politely told him that I was not willing to do that.

He had placed the order only hours before, and I had not yet charged him. He finally agreed to wait for the product, but said he would be watching the calendar.

I knew I had a "problem customer" on my hands. (Imagine the "Twilight Zone" theme music playing at this point). A week later, when I got another call from the Conair Supplier saying that the factory shipment had been delayed further, I braced for impact, and contacted the customer. I'll spare you the details of that exchange as well. There may be small children present. I managed to keep calm, although I was boiling at this point. Again I offered to cancel the order, and refund his credit card (which I had charged, since he had okayed the delay). He refused, saying that he had waited this long; he might as well wait it out.

The BP Monitor showed up at the distributor after the expected delay. They were considerate enough to Drop Ship it to the customer by FedEx 2 Day Air at no extra charge. (My Conair distributor is great!).

It would arrive at the customer's house shortly. I was quite happy. Then I checked my email. Another blistering tirade from our over-pressured friend. I wrote back, calmly and politely, and told him he could expect his order very soon, and I was sorry that he was dissatisfied. I haven't heard back from him, and probably won't.

Now, this may sound like I'm making it up for effect, but I swear it's true: I handled another order for the exact same product on the same day, and the woman who placed the order experienced the same delay. A couple of hours after receiving the nasty-gram from my friend above, I got an email from this woman. She thanked me for my persistence in following up her backorder, and told me she would definitely be back to shop with the site again. That's what makes it worth being in business in the first place! One happy email can really make your day. :o)

Here are the things that I've learned about order problems during my time in this business:

Internet customers are for the most part "instant gratification" junkies. They want it NOW.

Because of this, backorder, discontinued item and other product problem situations must be handled immediately.

Don't wait even a day. Call the customer, or email them. (A call is usually appreciated more than an email, but you have to watch your phone bill).

If you think a product might be questionable as far as stock status with your Drop Shipper, or if you stock them yourself but are running out, check with your Supplier before charging the customer's card. You get a feel for which items are stocked less than others after a while. You can always refund the charge, but it's better if you can tell them you have not charged them yet.

Always offer to cancel. Chances are they won't, because then they have to go search for the product again and hope they don't run into the same problem somewhere else, but the offer to cancel must be there. It tells them that you are not desperate for the sale, and gives you the advantage in the conversation.

Be nice. Even if you are grinding your teeth. You can't afford to lose your grip. You never know when one episode of lost temper will come back to bite you.

Follow up during the problem period. Send at least one email saying that you are monitoring the situation, and are sorry for the delay.

That is a great tactic for defusing an impatient person; at least they know you are thinking about them.

If there is an additional delay, offer to cancel again. They may actually take you up on it if it's a long delay, but you don't lose anything if the Supplier has not yet shipped.
When you know that the product has shipped, inform the customer. They appreciate that, and again, realize that you are at least thinking about them.

Most people understand order problems, and will give you no trouble. In fact, most are very appreciative if you contact them right away. Sometimes, you get the problem customers. Deal with them politely, and never lose your temper. Be the bigger person.

I always check my return emails to these people twice. There are times when I've let some temper slip in to my writing, and I'm sure to remove it before clicking the send button. It only ends up helping you in the long run!

 
Archive List

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Dealing with Backorders

When Your Customers Steal

WorldwideBrands.com Article abou...

Mass Emails to Distributors Shou...

4 Rules for New Entrepreneurs - ...

Take Charge of Your Time, Take C...

Two to Tango - EBay Buyer/Seller...

Virtual Staffing for Your Small ...

Software Designed Around Your Ne...

Beating the Odds - 3 Ways to Ens...

Good Business Sense - Microsoft'...

Is Fulfillment Right for My E-Bi...