Out of stock means your shelf is empty on an item you normally carry and more is coming on your regular purchase order, a backorder means the vendor's shelf is empty and the line ships once the vendor restocks, and a special order is an item you never stock that you order for one customer. Drop ship is the fourth term in the family, for anything the vendor sends straight to the customer instead of to your store.
The four terms, in plain counter language
These terms get used interchangeably at a lot of counters, and they shouldn't be. Each one describes a different empty shelf, a different piece of paper, and a different promise to the customer standing in front of you.
Out of stock describes your shelf. It's an item the store normally carries that you're out of right now, and more is coming on the next regular purchase order to your vendor. When a homeowner wants a 50 lb bag of the lawn fertilizer you sold out of on Saturday, that's out of stock. You don't need to order it special, you tell them it lands on next week's truck and take their number if they want a call.
Backorder describes the vendor's shelf. A backorder is a product the vendor doesn't have on hand, delivered once the vendor restocks. From your side, it's a line on your purchase order that the vendor confirmed but couldn't ship, and it sits open until it fills or you cancel it. There's a second, customer-facing meaning too: you can take a customer backorder by selling or promising an item the store is out of, to be filled when the shipment arrives. Same word, two directions, and the distinction matters when you're deciding what to tell people.
Special order is reserved for one thing only: an item the store never stocks, ordered on the customer's behalf. "We don't stock that, so we'll order it for you." A specific stain color that's been discontinued, an odd fitting size, a trade item only one manufacturer makes. Calling a plain stockout a special order is the most common mix-up in this family of terms, and it causes problems, because the handling is completely different.
Drop ship is the cousin worth knowing. A drop ship is a vendor shipping straight to the customer instead of to the store. It often rides along with a special order (the manufacturer sends the odd-sized fitting directly to the contractor's shop), but it can apply to regular stock too when the freight makes more sense direct.
The comparison table
| Term | Whose shelf is empty | Who orders | What the customer hears | What happens to the purchase order |
|---|---|---|---|---|
| Out of stock | Yours | You, on the regular weekly order | "More's coming on Thursday's truck" | Item reorders as usual, nothing special |
| Backorder (on your purchase order) | The vendor's | The vendor fills it when restocked | Depends on whether you promised it to anyone | The line stays open on the purchase order until it ships or you cancel |
| Customer backorder | Yours, and you sold past it | You promised it to the customer | "We'll owe you two boxes when the load lands" | The incoming stock is spoken for before it hits the shelf |
| Special order | Nobody's, you never stock it | You, on the customer's behalf | "We'll order it for you, it'll be about two weeks" | A line you wouldn't normally write, often with a deposit attached |
| Drop ship | Bypasses your shelf entirely | You, but the vendor ships direct | "It'll ship straight to your shop" | The purchase order closes on receipt at the customer, not your dock |
A Tuesday morning, three different answers
Here's how the same morning plays out at one counter.
A contractor comes in wanting 14 gallons of a stain in a color the manufacturer discontinued last year. You've never carried it, and you're not going to start stocking 14 gallons of it. That's a special order. You confirm the exact vendor item number with him, write it on the ticket, take a deposit, and give him a pickup-by date. More on why that deposit matters in a minute.
An hour later a homeowner wants a 50 lb bag of the lawn fertilizer you sell all spring. You sold the last one Saturday. That's out of stock, not a special order, and the fix is a sentence: "More's coming on next Thursday's truck, want us to set one aside?"
Then you open the vendor's confirmation on last week's purchase order and see that 6 boxes of the deck screws you reorder every week got backordered, estimated two weeks out. That's a backorder on your purchase order. Nothing shipped, nothing to receive, and a decision to make about whether you wait, buy elsewhere, or substitute.
Three empty shelves, three different conversations, three different pieces of paper.
Handling each one at the counter
Special orders: deposits, deadlines, and the exact item
A special order is a favor with a cost attached, and the cost lands on you if the customer never comes back. The counter practices that keep special orders from becoming shelf clutter:
Take a deposit on every one. It doesn't have to be the full amount, but it has to be enough that walking away stings a little. An unclaimed special order with no deposit is dead stock the day it lands, and dead stock is a whole topic of its own (we have a guide on finding and clearing it). An unclaimed one with a deposit is at least a known exception with some of the cost covered.
Confirm the exact item in writing before you order. Color, size, finish, and the vendor item number, on the ticket, where both of you can see it. "The blue one" is how you end up with 14 gallons of the wrong discontinued blue. For a contractor, get the vendor item number on the sale alongside the PO they use to mark the job, so the whole thing ties back to their paperwork.
Tell the customer the vendor's estimated date, and tell them it's the vendor's estimate. "They say two weeks" sets a very different expectation than "two weeks," and when the manufacturer slips a week, you're the messenger rather than the promise-breaker.
Set a pickup deadline and call when it lands. Pick a window, say 30 days, and whatever yours is, say it out loud when you take the money.
Decide your return policy before you're standing there with the item. Some stores make special orders non-returnable, or take them back with a restocking fee, because by definition you never stocked the thing and have no shelf to put it on. There's no wrong answer, but there is a wrong time to announce it, and that time is after the customer has paid.
Out of stock: the easiest conversation you'll have all day
An out of stock on a regular item is a one-sentence fix, because the reorder is already happening. The discipline here is on your side of the counter, not the customer's: know when your truck lands, know whether the item is on it, and set the thing aside if the customer asks. If your stockouts keep surprising you, the fix is upstream, in your reorder points and safety stock, which we've written up as a worked formula. An item that goes out of stock every other week isn't bad luck, it's a number that's set wrong.
Customer backorders: sell what you have, owe the rest
When a contractor wants 20 boxes of the $12.40 deck screws and you have 14, the clean move is to sell the 14, record 6 as owed, and fill them when the load comes in. What you don't want is checking out all 20 and letting the system go negative to "sell" stock that isn't in the building. Negative inventory feels harmless in the moment and quietly wrecks your counts, your costing, and your reorder suggestions, which is why it gets its own write-up. An owed line you can see beats a phantom box the system thinks exists.
This is also where will calls fit into the picture. Stock set aside for a customer moves from on hand to committed, so the next person at the counter sees what's available rather than what's physically still sitting in the aisle.
Backorders on your purchase order: the three-way match
When the vendor's confirmation shows a backordered line, you have three choices and about a week to make one. Keep the line open and wait for the vendor's next ship date, cancel it and buy the item elsewhere, or substitute something close that you can get now. The right answer depends on whether anyone's waiting on it (check your customer backorders and will calls first) and how deep your shelf is on the item.
Two habits make this painless. First, check the vendor's updated ship date every time you look at the open purchase order, because estimates move and nobody calls to tell you. Second, don't pay the invoice for a backordered line until it ships. A proper three-way match ties the purchase order, the receiving record, and the vendor's invoice together, and a line that never arrived has no receipt to match. If your purchase order process is more shoebox than system, our walkthrough of the whole flow covers it from creation to receiving.
Drop ship: the freight shortcut
Drop shipping pairs naturally with special orders. If the manufacturer can send the odd-sized fitting straight to the contractor's shop, you save a receiving step, a phone call, and a round trip, and the customer gets it sooner. The counter version of the conversation is the same as any special order (exact item, deposit, estimated date), with one addition: confirm the delivery address and whether someone needs to be there to sign.
The mistakes that cost money
Most of the pain in this family of terms comes from three habits.
The first is calling a stockout a special order, which sends the counter through the whole deposit-and-deadline routine for a bag of fertilizer that was already coming Thursday. It wastes the customer's time and teaches the staff that the words don't mean anything.
The second is taking special orders with no deposit and no pickup deadline, then wondering why the back room fills up with orphaned items nobody will ever buy. Every unclaimed special order started as a customer who said "yeah, I'll take it" and a counter that took their word instead of their card.
The third is letting inventory go negative to paper over a backorder. It makes the sale look complete, but the count is wrong, the cost on the sale is wrong, and the reorder suggestion built on top of both is wrong too. Owe the customer on the record, not in the system's imagination.
How Rundoo handles it
In Rundoo, quotes, held drafts, will calls, and special orders live in the same flow as a regular sale in the POS, so the counter never learns a separate screen for the exceptions, and every sale, return, and special order updates inventory the moment it happens. One lumber yard owner described quoting a job, hearing "go ahead," and turning the quote straight into the special order on the spot.
Inventory shows on hand, committed, available, and on order, so the counter can see what is promised to customers versus free to sell, and backorders stay tracked on the purchase order until the load comes in. Special orders stay attached to the customer record, which means when that discontinued stain finally lands, the counter sees who's waiting on it without anyone keeping a sticky note. You can see the whole flow on the Web App & POS page.
