Backorders

Updated 1 month ago by Colin Mollenhour

When an order item cannot or will not be fulfilled with the current inventory, the item is said to be Backordered.

ShipStream supports the concept of backorders at both the order level and the order item level. Thus, it is possible for one or more items to be backordered while one or more other items are not backordered.

The order status can then be either Backordered or Partially Backordered. To understand the difference you must understand the Ready to Ship status and the Backorder Policy. A Partially Backordered order is one that has backordered items and non-backordered items and is not prevented from being shipped in it's current state while a Backordered order is one that has at least one backordered item and cannot ship in it's current state.

Allow Backorders

By default ShipStream does allow backorders, meaning it will accept an order when there is not enough inventory in-stock to fulfill the order immediately. This behavior can be changed at both the Global and Merchant configuration scopes and also on a per-SKU basis. The Global and Merchant configuration can be set at System > Configuration > Catalog > Inventory > Product Inventory Options > Allow Backorders Default.

The configuration value will determine the behavior when the Product's "Backorders" attribute is set to "Use Config". You can override the configuration value for each SKU in the Inventory tab by choosing a value other than "Use Config" for a given product.

Ready to Ship

An order in ShipStream is Ready to Ship if it is not on Hold status and also not prevented from being at least partially fulfilled by the current inventory levels and the Backorder Policy. When an order transitions from Ready to Ship: No to Ready to Ship: Yes the Ready to Ship time is recorded and displayed on the order page. This timestamp tells you the moment that an order could be fulfilled from the warehouse operations point of view. This timestamp is also used to inform the determination of the Target Ship Date.

Backorder Policy

The Backorder Policy can be configured at the Default and Merchant scopes under System > Configuration > Sales > Backorders > Backorder Policy. This setting determines in a situation where an order is partially backordered if it will be considered as partially fulfillable or not. The options are:

  • All or Nothing - Do not ship anything until all items are in-stock.
  • As Available - Ship in-stock items as they become available. No limit to number or frequency of additional shipments.
  • Up To X Shipments - Same as As Available, but effectively changes to All or Nothing before shipping the Xth shipment.

As inventory is adjusted the order allocation and status will update automatically and when the Backorder Policy allows an order to be fulfilled based on the inventory available and assuming it is not on hold, the Ready to Ship status and time will be updated.

The Backorder Policy may be specified for individual orders and updated even after the order is created. If not specified, the configuration will be used as the default Backorder Policy.

Assigned vs Allocated Inventory

An order for an item that is Backordered and not locked to a specific warehouse (see Order Allocation) will not be assigned to any warehouse meaning it could in the future be assigned to the next available warehouse. If the order is locked to a specific warehouse the inventory will be Assigned to that warehouse even though it is not Allocated indicating that it will only be fulfilled from that warehouse regardless of availability in other warehouses. Only when the inventory becomes available will the inventory be Allocated and deducted from the product's Available inventory. Order items that are Assigned but not Allocated are not included in the product's Allocated inventory.

Order not locked to a warehouse
Order locked to Newark, NJ

Why is the item Backordered while there are units Available?

When you lock orders to one warehouse or another it is possible that some items will be backordered because they are not available at the warehouse they were locked to. Additionally, if the effective Backorder Policy for some orders is All or Nothing, it is possible that the units that are available cannot be shipped because other items on those orders are "blocking" the order from being Ready to Ship. Therefore, you can have a situation where there is inventory in-stock but that cannot be shipped. Possible solutions might be:

  1. Cancel the backordered items from some orders
  2. Change the Backorder Policy to allow the orders to be partially shipped
  3. Change the order priority higher or lower to allow other orders to take precedence
  4. Receive more inventory so that the backordered orders can be completed
ShipStream uses FIFO when allocating inventory to orders to ensure "fairness" and to avoid a situation where large orders are perpetually backordered because small orders with fewer backordered items jump in front. However, you can set/change an order's Priority to override this strict FIFO ordering and more finely manage the allocation of orders relative to one another.


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