Retail backorders management is as effective as the tool you use. Extremely fast-selling products are bound to go out of stock. It’s inevitable. Take the next-gen consoles like the Xbox series X and the PS5, for example. They were barely in stock since their launch. Merchants did not have the products in their inventories, but they continued to accept orders. That is the case even today in 2022. These orders are known as backorders.
Backorders are order requests for items not in stock at the time of purchase. Retailers accept such orders to fulfill them at a later delivery date. In this article, we take a look at the importance of backorders and how a POS solution helps. Let’s get started.
The necessity for backorders
Providing the facility for backorders to customers is a retail order strategy essential for business growth. The order tactic offers merchants a number of advantages. Let’s take a look at what they are.
- Improve customer satisfaction – Backorders allow customers to place orders even when they are not in stock, enabling them to get their hands on fast-selling products.
- Minimize overhead expenses – Ordering items in excess will require more storage space in warehouses. Maintenance costs also add up.
- Improve sales – Fulfilling customers’ order requests instead of denying sales because of stock unavailability increases profits.
Traditional backorders process
Let’s glance at how retailers traditionally process backorders.
- Inventory inspection – Firstly, store staff manually check warehouses for inventory levels. On noticing that products are out of stock, they update eCommerce portals and databases to convey it.
- Revise delivery date – Next, merchants revise the dates customers can expect to receive the unavailable products. They allow shoppers to buy those products.
- Purchase orders – The fulfillment team then proceeds to send purchase orders to manufacturers and distributors.
- Order fulfillment – After receiving the order items, retail stores notify and dispatch them to customers.
The role of a POS system in handling backorders
Traditional methods of managing backorders are time-consuming and prone to errors. They involve the use of manual-intensive tools like spreadsheet software and paper. These tools don’t have the features a backorders management software solution as a POS has. Here’s how a POS system helps handle backorders.
Real-time inventory updates
A POS system tracks stock levels in your inventory in real-time. It leverages technologies such as RFID and NFC, giving you complete visibility into what is available at all times. The system also provides notifications, bringing items that run out of stock to your attention through alerts immediately.
Multiple payment modes
Allowing customers to pay in any mode they prefer increases backorder sales. A POS system supports multiple payment modes. They include cash, debit/credit cards, mobile wallet options, and cheques. The payment convenience encourages customers to place orders for items they can receive at a later time.
Automated purchase orders
Manually, you would need to create purchase orders as and when you receive backorders. That’s not the case when you have a retail software solution – a POS. It automates the creation of purchase orders, allowing you to focus on higher-value tasks.
Multi-store inventory management
When you have multiple stores, you may have additional inventory in one branch while running out of stock in another. A POS solution lets you systematically communicate and initiate inventory requests with your stores, fostering effective backorder management.
Benefits of using POS for backorders management
Employing a POS solution to manage your backorders provides numerous advantages over governing them with manual-intensive tools. Benefits include:
- Lesser expenses – The repetitive tasks a POS system can carry out autonomously circumvents the need for human intervention, reducing labor costs.
- Accuracy – Errors in fulfilling backorders leave customers incredibly frustrated. A POS software solution sends out precise purchase forms and ensures customers receive their correct orders on time.
- Complete control – A POS streamlines all backorder management activities. You can oversee the order process from the time of placement to delivery in a single location.
Accepting backorders helps customers purchase products with a little delay while your business witness higher sales rates. Inefficient backorder management repels customers and damages store credibility. The best way to manage it is with SmartPOS – the leading Point of Sale software system. It packs the latest features and security protocols to give you a reliable retail management experience. Learn more about SmartPOS by contacting us today.