November 2003

I was lucky that first time. I've since learned that backorders are just a normal part of businesses, online or off. Even though 99% of all orders go through fine, anyone who sells long enough will have to deal with backorders sooner or later. Depending on your customer's attitude, backorders can be fairly painless (like my first backorder), or they can be as much fun as a migraine headache. Although you can never eliminate all the hassle of backorders or satisfy every upset customer, there are some things you can do when managing backorders that will make it a better experience for your customers and less painful for you. In this article, we'll discuss the reasons backorders happen and the best ways to deal with them.

"Why Me?"

In talking with many Wholesale Marketer members, I've discovered that many people feel much as I did when faced with their first backorder. Some feel that their business will be ruined by bad feed back, some have feel like some one is out to get them, and others simply take the news of backorder with a stiff upper lip, handle it the best they can, and keep selling other products like crazy.

The facts are that backorders can happen for several reasons. The following are all reasons I've seen on more than one occasion:

1. Some one listed an item on eBay that was in stock when their auction started, but, due to an unforeseen large amount of orders, is out of stock when the auction ends.
2. A product on someone's web site has actually been out of stock with the distributor for several days, but that person doesn't notice it's out of stock until they receive an order for the item.
3. The distributor shows an item as in-stock, but when the go to fulfill orders, they find out some shrinkage in their inventory has occurred due to products being damaged or even mis-shelved somewhere in their gargantuan warehouse.
4. With Wholesale Marketer, product quantities are updated daily, but it is possible that the supplier stocked out of a product earlier in the day and the change has not been reflected on the Wholesale Marketer website when you place your order.

In my opinion, there are two good methods for dealing with backorders. Which one you use depends a lot on your business, the type of products you sell, and your own personal preference. I'll list them both and let you choose which one is best for your business.

Method 1: I recommend Method 1 if you feel that your business has good potential for repeat business from customers, and you have a decent markup on products. Here's how it works: as soon as you find out that the product is on backorder from your supplier, jump on the internet and find the product somewhere else. After all, there's certainly more than one distributor carrying products from large manufacturers like Sony or Coleman, and there are also plenty of online retailers that don't drop ship, but carry inventory. You won't always find the product somewhere else, but if you do, you can usually place the order from one of these other online stores and have it gift shipped to your customer ASAP.

Using this method you stand to lose some money on the order (since you'll pay retail instead of wholesale), but you may gain a customer. If you do choose to do this, be sure to let your customer know what you've done for them. Call them and let them know that their order may come in a box from Amazon or WalMart.com (or wherever you managed to find the product) and explain why. Tell them that the item was temporarily on backorder in "your" warehouse, but rather than have them wait, you were willing to take a loss on the product in order to provide superior customer service. If you handle the situation right, your customer will remember you as someone who truly cares about his/her customers and will come to you again and again in the future.

Method 2: The second method is the more traditional way of handling backorders, but can also reduce the hassle if done right: As soon as you find out about a backorder (this will usually be the day after you place your order if you working with Wholesale Marketer) contact your customer and let them know. This is the most important step. Customers are much more understanding if they know what's going on. If you can, I highly recommend calling them over sending an email. Give them the option of waiting for the product to come back in and give them an estimate of how long that will be. Also give them the option of canceling the order and receiving a full refund. This will let your customer know that you care and 8 times out of 10, your customer will choose to wait for the product to come back in stock. After all, if you've done your marketing right, they should feel like they got a great deal and they'll want to hang on to that deal.

One more thing I should add for those of you using Wholesale Marketer: If you're paying by PayPal or wire transfer, your product is not reserved until we receive payment. So if the order status shows as pending and the quantity is getting low, you should get you payment in as soon as possible to prevent the product from going on backorder status.

As the Holiday Season looms ever nearer, the likelihood that you'll experience backorders becomes ever greater. Prevent them as much as you can by checking product quantities often; and, if you sell on auctions, making sure there are plenty in stock before you list an item. When the backorders do happen, remember to handle them as professionally as possible, even if your customer does lose their temper, don't lose yours. If things get really out of hand, just do like Jack Nicholson in Anger Management -- close you eyes, take a deep breath, and say "G-o-o-s-f-r-a-b-a."

Sincerely,

Clark Winegar
Marketer Monthly Editor

Wholesale Marketer is pleased to announce our development team has completed all system integration for our new billing system and PayPal partnership. Our members are now able to choose PayPal to pay for product purchases. This gives our members the added convenience of paying the same way they receive payment.

PayPal has over 31 million members and is recommended by CNET as "the most reliable personal bill payment service on the web." Wholesale Marketer also recommends PayPal as our preferred method of Payment. If you don't yet have a PayPal account, you can sign up at www.paypal.com in less than five minutes. If you're not accepting PayPal yet, you could be losing customers.

Image Search

Have you ever come across a product on Wholesale Marketer that didn't have an image? Unfortunately, because of the way our site is updated from various supplier data feeds, we can't always just add the image for you if the supplier didn't include it, but we have added a new image finding tutorial. To check it out, go to www.wholesalemarketer.com/pages/image_search.html It can also be accessed from any product page by clicking "Learn more about finding images"

More Wholesale Marketer Happenings...

This month our marketing tip is another service we've found to be extremely helpful when listing on eBay. The service in an eBay research tool from Andale. Again, we would like to clarify that we are in no way affiliated with Andale, nor do we receive any compensation from them for telling you about their service. It is just something we have found to be very useful in our own business practices.

Product research can be time consuming and tedious, but the Andale research tool helped us cut the time down and eliminate a lot of the trial and error for our eBay listings. It automatically checks completed eBay auctions for the product you specify, then gives you a plethora of data in easy to read charts and graphs to help you make good decisions. Want to know if your likely to make a profit? The research tool will tell you the average selling price and the percentage of successfull listings as well as the best days to list, and what eBay features work.

The best part is, it's free for thirty days so you can see if you like it. If you do, it's only two bucks a month after that. For the time it saves you, it's well worth it!

Learn More About the Andale Research Tool