A stockout costs you sales twice: the orders you miss, and — on marketplaces like Amazon — the ranking and momentum you lose while you're out. The fix is knowing your reorder point: the inventory level that should trigger your next purchase order.
It's a simple formula once you know three numbers about your product.
Reorder before you hit this level to avoid stockouts.
Units sold per day
Order → in-stock
Extra days of cover
Reorder point = (Average daily sales × Lead time in days) + Safety stock. The first part covers demand while you wait for stock to arrive; the second is a buffer for the unexpected.
Example: you sell 25 units a day, your supplier takes 21 days, and you want a 10-day buffer. Lead-time demand is 25 × 21 = 525 units, safety stock is 25 × 10 = 250 units, so your reorder point is 775 units. Reorder the moment you hit it.
Safety stock protects against two things: sales spikes and late deliveries. The more variable your demand or lead time, the bigger the buffer should be. Expressing it as “days of cover” (as the calculator does) keeps it intuitive.
Too little and you risk stockouts; too much and you tie up cash and rack up storage fees. Review it whenever your sales velocity or supplier reliability changes.
Reorder point isn't set-and-forget. Recompute it as your daily sales grow (especially into peak season) and if your lead times shift. A number that was safe at 10 units/day will leave you short at 30.
Connect your store to a live dashboard and your average daily sales stay up to date automatically — so your reorder point does too.
Reorder point = (average daily sales × lead time in days) + safety stock. It covers demand during the wait for new stock plus a buffer for variability.
Enough to cover sales spikes and late deliveries — the more variable your demand or lead time, the more you need. Expressing it as a number of days of cover (e.g. 7–14 days) keeps it easy to reason about.
Whenever your sales velocity or supplier lead time changes, and before peak seasons. A reorder point set for slow months will cause stockouts once sales speed up.
Connect your store and watch these numbers update themselves — no spreadsheets.
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