At a recent business development meeting I was told one of my client’s issues were back orders.

I told the team that as of today back orders were a thing of the past and we will never have to worry about them again. One of the team spoke up and said “It is impossible, sometimes our customers place an order and we do not have the item in stock, so we have to order it.”

Tips on how to avoid back orders and become a value added provider:

1. If you have a customer that places orders on a regular and consistent basis that can put you in an out of inventory position.
2. Move that client to a contract order basis. A contract order basis is an order where the customer has committed to buy specific quantities of an item over a specific time period.
3. Schedule your customer’s deliveries that are consistent with their needs.
4. Knowing the product is sold, you are now in a position to purchase in larger volume and potentially get better pricing which decreases your cost.
5. You now have the potential to pass on some of the saving to your customer, increase your profit on the buy side, reduce the stress of being out of an item, become a value added provider to your customer and start moving out of being a commodity.