--- title: "Backorder vs Pre-Order: The Difference and When to Use Each" description: "Backorder vs pre-order: a pre-order sells a product before release, a backorder sells one that sold out. See how they differ and when to use each." image: https://www.hotwax.co/hubfs/blogs/pre-orders-vs-backorders-what-is-the-difference/preorder-vs-backorder.jpg --- [![HotWax Commerce](https://www.hotwax.co/hs-fs/hubfs/hotwax-logo.png?width=200&height=63&name=hotwax-logo.png)](https://www.hotwax.co/) [![HotWax Commerce](https://www.hotwax.co/hs-fs/hubfs/Common%20assets/Logos/HotWax/HWCLogoDarkMode.png?width=200&height=63&name=HWCLogoDarkMode.png)](https://www.hotwax.co/) ☰ - Product - Overview - [Order Management System](https://www.hotwax.co/product/omnichannel-order-management-system/) - [Store Inventory Management](https://www.hotwax.co/solution/store-inventory-management) - [Omnichannel Suite](https://www.hotwax.co/product/omnichannel-order-management-system-for-shopify/) - [OMS Architecture](https://www.hotwax.co/product/technology/oms-architecture) - [MCP Server](https://www.hotwax.co/product/technology/mcp-server) - [AI Powered Order Routing](https://www.hotwax.co/product/technology/ai-powered-order-routing) - [FAQs](https://www.hotwax.co/frequently-asked-questions) - [Product Updates](https://www.hotwax.co/product-updates) - [Knowledge Base](https://www.hotwax.co/hotwax-commerce-documentation) - Integrations - [Shopify](https://www.hotwax.co/shopify-order-management-integration) - [NetSuite](https://www.hotwax.co/hotwax-netsuite-integration) - [All Integrations](https://www.hotwax.co/all-integrations/) - Use Cases - By Business Benefits - [Prevent Overselling](https://www.hotwax.co/use-cases/prevent-overselling) - [Unified Inventory](https://www.hotwax.co/solution/unified-inventory/) - [Order Routing](https://www.hotwax.co/solution/configurable-order-routing) - [Ship From Store](https://www.hotwax.co/solution/ship-from-store-software) - [Buy Online Pick-Up In Store](https://www.hotwax.co/solution/buy-online-pick-up-in-store-bopis-software/) - [Pre-Orders](https://www.hotwax.co/solution/pre-orders/) - [Inventory Transfers](https://www.hotwax.co/inventory-transfers) - [Cycle Counts](https://www.hotwax.co/cycle-count) - [Return In Store](https://www.hotwax.co/solution/buy-online-return-in-store-boris-software) - [Retail Sales Audit](https://www.hotwax.co/product/omnichannel-retail-sales-audit-oresa/) - By Business Model - [Footwear](https://www.hotwax.co/industries/footwear) - [Jewelry](https://www.hotwax.co/industries/jewelry) - [Fashion & Apparel](https://www.hotwax.co/industries/apparel-and-fashion) - [Beauty](https://www.hotwax.co/industries/beauty-and-personal-care) - [Travel](https://www.hotwax.co/industries/travel-and-bags) - Resources - [Blog](https://www.hotwax.co/blog) - [Podcast](https://www.hotwax.co/podcast) - [Whitepaper](https://www.hotwax.co/whitepaper) - [Luxury Order Management](https://www.hotwax.co/order-management-system-for-luxury-brands) - [Comparing Order Management Capabilities B/W Shopify and HotWax](https://www.hotwax.co/comparing-order-management-capabilities-between-shopify-and-hotwax) - [How To Do By Online Pick-Up In Store Right](https://www.hotwax.co/how-to-do-buy-online-pick-up-in-store-right) - [Solution Briefs](https://www.hotwax.co/solution-briefs) - [Demo Videos](https://www.hotwax.co/demo-videos/) - [Sample BI Reports](https://www.hotwax.co/business-intelligence-bi-reports) - Company - [Our Story](https://www.hotwax.co/about-us/our-story/) - [Team](https://www.hotwax.co/about-us/) - [Partners](https://www.hotwax.co/become-a-partner) - [Customers](https://www.hotwax.co/customers) - [Pressroom](https://www.hotwax.co/hotwax-commerce-pressroom) - [Social Impact](https://www.hotwax.co/social-impact-hotwax-commerce) - [Events](https://www.hotwax.co/events-and-conferences) - [Security](https://www.hotwax.co/privacy-and-security) [Book a demo](https://cta-na2.hubspot.com/web-interactives/public/v1/track/click?encryptedPayload=AVxigLISXXGkcOtRysPKfjcriLyodY4rudkc50veKlKDe8q2B1%2FRWGeLxDhbY%2BkohRU8XspED5h92umpu7OkRZM1bllkBJKAFAlbNGEnCRAQX7O752HQT17G9v%2FBCweH%2FXvHlZ5%2FUC0MRPtKYCn5XoGb8TpxbLxvKbLalLOZcHeqoaHicFtr15mZOUkn2Y06IxHVsa5b0g%3D%3D&portalId=6357099) 4 min read [Pre-Orders](https://www.hotwax.co/blog/tag/pre-orders) --- # Pre-Orders vs Backorders: What’s the Difference? 31 Mar, 2022 ![Pre-Orders vs Backorders: What’s The Difference?](https://www.hotwax.co/hs-fs/hubfs/blogs/pre-orders-vs-backorders-what-is-the-difference/preorder-vs-backorder.jpg?width=960&height=500&name=preorder-vs-backorder.jpg) SHARE - - - [mailto:?subject=Check%20out%20https://www.hotwax.co/blog/pre-orders-vs-backorders-what-is-the-difference&body=Check%20out%20https://www.hotwax.co/blog/pre-orders-vs-backorders-what-is-the-difference&media=https://6357099.fs1.hubspotusercontent-na1.net/hubfs/6357099/blogs/pre-orders-vs-backorders-what-is-the-difference/preorder-vs-backorder.jpg](mailto:?subject=Check%20out%20https://www.hotwax.co/blog/pre-orders-vs-backorders-what-is-the-difference&body=Check%20out%20https://www.hotwax.co/blog/pre-orders-vs-backorders-what-is-the-difference&media=https://6357099.fs1.hubspotusercontent-na1.net/hubfs/6357099/blogs/pre-orders-vs-backorders-what-is-the-difference/preorder-vs-backorder.jpg) - - Retailers are constantly searching for innovative ways to sell their inventory quickly to avoid end-of-season markdowns and maximize their ROI. Pre-Order and Backorder models are great strategies to sell future inventory or inventory still in transit. They work especially well for brands releasing high-demand products that consumers are willing to wait for. However, setting correct customer delivery expectations can be very challenging when promising future inventory. Many retailers deploy Pre-Order and Backorder strategies without a solid plan in place to manage expectations, leaving eCommerce shoppers confused and unsure when to expect their product. In this blog, we will discuss Pre-Orders & Backorders in detail, including the key differences between them and how retailers can deploy these models to provide a better experience for their customers. If you are weighing backorder vs pre-order for a launch, the right choice depends on whether the product has been in stock before. Pre-order management software helps with both by showing a promise date on the product page and holding orders until inventory arrives. ## What is the difference between a backorder and a pre-order? A pre-order is an order for a product that has not been released yet and has never been in stock. A backorder is an order for a product that was released, sold out, and is waiting on replenishment. Both sell inventory that has not arrived yet. | | Pre-order | Backorder | | --- | --- | --- | | Product status | Never released, has never held stock | Released earlier, currently sold out | | Why stock is missing | Still in planning or production | High demand, forecasting gaps, or operational discrepancies | | Inventory it sells against | A first production run or opening purchase order | An incoming replenishment purchase order | | Payment | Full or partial upfront, varies by brand | Usually full payment upfront | | Typical use | New launches and demand testing | Proven sellers waiting on replenishment | The label is the easy part. Keeping the promise is harder, because both models sell a delivery date before the stock exists, so retailers cap how much they presell and keep that date current as the shipment moves. The sections below cover each model in turn, plus a closer look at [how pre-order management works](https://www.hotwax.co/solution/pre-orders/). ## Pre-Orders Pre-Orders are orders placed for products that have not yet been released in the market. Naturally, these products are not in stock. These orders are referred to as “Pre-Orders” because they are advance orders for items still in planning or production. ### When are Pre-Orders taken? Many retail brands will simply list unreleased products as “coming soon” on their eCommerce site, especially when their release timeframe is undefined. However, Pre-Order models are used when products are expected to be available within a reasonable timeframe and their production is already planned. Different retailers may accept Pre-Orders for different reasons. Small retailers may need the revenue for their manufacturing run, while established retailers might be looking to test, validate, and capture demand levels for an upcoming release. ### When to set a maximum limit for Pre-Orders? Depending on the product category and a brand's reason for taking [Pre-Orders](https://www.hotwax.co/solution/pre-orders/), merchandisers can decide if they want to take unlimited Pre-Orders for an item or use “on order” inventory to limit Pre-Orders and then mark it as “out of stock.” If merchandisers are using this model to generate sales in advance and do not plan to produce the product in the future, they should choose to cap Pre-Orders only to cover the quantity that is planned to be produced. Alternatively, if brands are using Pre-Orders to sense demand for a product release, they may choose not to set a maximum limit. ### Full payment or partial payment? For Pre-Orders, the payment strategy varies from brand to brand. Some retailers decide to require the full payment upfront, while others opt to collect a portion upfront and charge the remaining amount when the product is delivered. This decision depends on brands’ unique products and business cycle. ## Backorders Backorders are orders taken for products that have been released but are temporarily out of stock. These orders are referred to as “Backorders” because they were previously in stock and will be available again soon, but are currently out of stock due to high demand, inaccurate sales forecasting, or operational discrepancies. ### When are Backorders taken? In general, retailers will list unavailable products as “out of stock” or “notify me when available” on their eCommerce site when they are unsure about the production time frame. However, it is a mistake to mark all out-of-stock products as Backorder products, because customers will still expect a reasonable timeframe for delivery, and will become aggravated if they have to wait for months on end.  Generally, retailers decide to take Backorders for “standard” products that are not seasonal, because they know that these products are already under production and they will receive inventory soon. For example, a plain white shirt could be considered a standard product for a fashion brand, as they will always sell this item, so they will always produce it.  In some cases, retailers may also take Backorders for popular seasonal products. Such products are generally in high demand within a given timeframe and customers are willing to wait. If the full inventory of the seasonal product is sold out and it’s the end of the season, then merchandisers do not prefer to take Backorders as they are not planning to produce additional inventory. ### When to set a maximum limit for Backorders? Like Pre-Orders, the decision to set a maximum limit for Backorders depends on the industry and product category. Merchandisers can decide to accept unlimited Backorders for a product or cap Backorders and mark items as “out of stock.”  Retailers should set a maximum limit on the number of Backorders they accept based on the quantity of planned inventory and how much has already been ordered. This keeps retailers from overpromising and accepting an order they cannot fulfill. For non-seasonal products in high demand, merchants generally opt to take continuous Backorders because they know they will fulfill them. ### Full payment or partial payment? Generally, the full payment for a Backorder is taken upfront. ## Comparing Pre-Orders & Backorders ![Pre-orders vs backorders comparison table: product release, seasonality, limits, and payment](https://www.hotwax.co/hs-fs/hubfs/blogs/pre-orders-vs-backorders-what-is-the-difference/preorder-backorder-comparison.png?width=860&height=256&name=preorder-backorder-comparison.png)*Pre-Orders & Backorders Comparison* ## How to maximize Pre-Order & Backorder effectiveness Many retailers make the mistake of showing the regular “Add to Cart” button on the product detail page (PDP) for products that allow for Pre-Orders and Backorders. This creates a confusing experience for customers because they make the decision to add an item to their cart assuming that it’s a standard order following a standard delivery timeline. [Communicating Pre-Order](https://www.hotwax.co/podcast/how-to-avoid-pre-order-disasters-with-sylvain-nigra)s and Backorders later in the shopping journey results in higher cancellation rates. To solve this problem and [prioritize a clear checkout process](https://www.hotwax.co/blog/4-key-benefits-of-pre-orders-for-retailers), merchants should replace the “Add to Cart” button with “Pre-Order” and “Backorder” buttons respectively, and display the expected delivery date directly on the PDP. This sets correct customer expectations and reduces cancellations.  Managing Pre-Order & Backorder models successfully is all about setting customer expectations correctly and meeting them. To achieve this, retailers need an [Order Management System](https://www.hotwax.co/product/omnichannel-order-management-system/) that: - Automatically tags products as Pre-Orders & Backorders - Captures, tags, and manage a queue of Pre-Orders & Backorders - Gets information on inventory receipts and releases limited inventory to the queue of Pre-Orders and Backorders so that they can be fulfilled on time - Communicates changes in the expected delivery date to customers \*     \*     \*  HotWax Commerce’s Order Management System enables retailers to effectively capture and manage Backorders and Pre-Orders so customers receive their orders by their expected delivery date. Our software also communicates changes in expected delivery dates directly to customers to avoid any surprises that will negatively impact your customers. If you are interested in learning more about how our omnichannel solutions can take your brand to the next level, [contact our omnichannel experts](https://www.hotwax.co/connect) today. ## Related Blogs ### [![Four phone screens of product detail pages for jackets and hoodies with stock and pickup details](https://www.hotwax.co/hs-fs/hubfs/blogs/how-to-optimize-the-product-detail-page-for-higher-conversions/how-to-optimize-the-product-detail-page-for-higher-conversions.png?width=960&height=498&name=how-to-optimize-the-product-detail-page-for-higher-conversions.png) Pre-Orders How to Optimize the Product Detail Page for Higher Conversions](https://www.hotwax.co/blog/how-to-optimize-the-product-detail-page-for-higher-conversions) ### [![Hands holding a package, Shopify pre-order management compared with HotWax](https://www.hotwax.co/hs-fs/hubfs/blogs/shopify-pre-order-management-vs-hotwax-pre-order-management/shopify-pre-order-management-vs-hotwax-pre-order-management.jpg?width=960&height=498&name=shopify-pre-order-management-vs-hotwax-pre-order-management.jpg) Pre-Orders Shopify Pre-Order Management vs HotWax Pre-Order Management](https://www.hotwax.co/blog/shopify-pre-order-management-vs-hotwax-pre-order-management) ### [![Managing Pre-Orders in Shopify Multiple Stores](https://www.hotwax.co/hs-fs/hubfs/multi-store-blog-image.png?width=960&height=503&name=multi-store-blog-image.png) Pre-Orders Managing Pre-Orders in Multiple Shopify Stores](https://www.hotwax.co/blog/managing-pre-orders-in-multiple-shopify-stores) ### [![How to Capture and Release Shopify Pre-Orders with ease?](https://www.hotwax.co/hs-fs/hubfs/blogs/how-to-capture-and-release-shopify-pre-orders-with-ease/Pre%20Order%20Release.jpg?width=960&height=503&name=Pre%20Order%20Release.jpg) Pre-Orders How to Capture and Release Shopify Pre-Orders with ease?](https://www.hotwax.co/blog/how-to-capture-and-release-shopify-pre-orders-with-ease) ### [![Man on a beanbag with a laptop, managing a pre-order catalog on Shopify](https://www.hotwax.co/hs-fs/hubfs/blogs/how-to-manage-pre-order-catalog-on-shopify/how-to-manage-pre-order-catalog-on-shopify.png?width=960&height=503&name=how-to-manage-pre-order-catalog-on-shopify.png) Pre-Orders How to Manage Pre-Order Catalog on Shopify?](https://www.hotwax.co/blog/how-to-manage-pre-order-catalog-on-shopify) ### [![4 Key Benefits of Pre-Orders for Retailers](https://www.hotwax.co/hs-fs/hubfs/blogs/4-key-benefits-of-pre-orders-for-retailers/4-key-benefits-of-pre-orders-for-retailers.jpg?width=960&height=499&name=4-key-benefits-of-pre-orders-for-retailers.jpg) Pre-Orders 4 Key Benefits of Pre-Orders for Retailers](https://www.hotwax.co/blog/4-key-benefits-of-pre-orders-for-retailers) ### [![Top 7 Questions to Ask Before Buying a Pre Order App for Shopify](https://www.hotwax.co/hs-fs/hubfs/top-7-questions-to-ask-before-buying-a-pre-order-app-for-shopify-featured-image.png?width=960&height=503&name=top-7-questions-to-ask-before-buying-a-pre-order-app-for-shopify-featured-image.png) Pre-Orders Top 7 Questions to Ask Before Buying a Pre-Order App for Shopify](https://www.hotwax.co/blog/top-7-questions-before-buying-pre-order-app-shopify) [![HotWax Commerce](https://www.hotwax.co/hubfs/Hotwax-2021/HotWax_February2020/Images%20Icons,%20Apparel%20background,%20Hexagon/logo-hotwax-dark.svg)](https://www.hotwax.co/) ### Connect ### Headquarters 175 S Main St Suite 1310, Salt Lake City, UT 84111 - 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