A reorder point is the stock level at which you should place a new order — low enough that you're not sitting on excess cash, high enough that you don't run out before the shipment lands. The formula is simple: reorder point = daily sales × (supplier lead time in days + safety-stock days). The hard part isn't the math; it's keeping it current for hundreds of variants whose sales pace keeps changing. This guide walks through the formula by hand, then shows how to automate it.
The formula, piece by piece
Reorder point = daily sales × (supplier lead time + safety-stock days)
- Daily sales — average units sold per day. Use recent history, weighted toward the last few weeks; a year-old spike shouldn't set today's reorder point.
- Supplier lead time — days from placing an order to stock arriving. This is per supplier: a domestic mill might be 7 days, an overseas factory 60.
- Safety-stock days — buffer days against a sales spike or a late delivery. Two weeks is a sensible default for most products; more for critical items with unreliable suppliers.
A worked example
Say a Pima Tee · M / White sells 0.5 units a day, your supplier (Pacific Knit Co.) delivers in 7 days, and you keep 14 days of safety stock:
| Level | Math | Result |
|---|---|---|
| Reorder point | 0.5 × (7 + 14) | ≈ 10 units |
| Order-up-to level | 0.5 × 90 days of cover | 45 units |
When available stock drops to about 10, it's time to order. And the second number answers the follow-up question — how much? — which brings us to:
How much to order: the order-up-to level
The reorder point says when; an order-up-to level says how much. Decide how many days of demand you want on the shelf when a shipment lands ("days of cover" — 90 days, roughly 12 weeks, is a reasonable default for most small merchants) and refill to it:
Order-up-to = daily sales × days of cover
Suggested order quantity = order-up-to − available − incoming
Subtracting incoming (units already on an open purchase order) is what stops you from double-ordering. Continuing the example: order-up-to is 45, you have 12 available and 0 incoming → order 33 units. If Pacific Knit Co. sells that tee in cases of 12, round up to 3 cases (36 units).
Why spreadsheets fall over
The formula works in a spreadsheet for a dozen products. It stops working when:
- Sales pace changes — daily sales is a moving number, and a stale velocity gives you a wrong reorder point in whichever direction hurts more.
- You have variants — an apparel store with 40 styles in 6 sizes and 4 colors is ~960 reorder points, each with its own velocity.
- Seasonality — a product heading into its peak needs a bigger buffer than its off-season average suggests.
- Lead times differ by supplier — one formula column can't reflect that your reorder point on domestic goods should be a third of the one on container-shipped goods.
This is the job Stockwik automates: it computes sales velocity from a rolling year of your Shopify order history (recent sales weighted heavier), applies each supplier's real lead time and your safety-stock buffer, recalculates every variant's reorder point continuously, and rounds suggested quantities to your supplier's case sizes and MOQs. Products then surface by status — Stockout risk, Reorder, Watch, or Healthy — so the morning check is a glance, not a spreadsheet session. (Full math, with defaults and overrides: How reorder levels are calculated.)
FAQ
What is the reorder point formula?
Reorder point = daily sales × (supplier lead time in days + safety-stock days). Example: 0.5 sales/day × (7-day lead time + 14 safety days) ≈ 10 units.
What's a good safety stock?
Around 14 days of demand is a sensible default. Raise it for critical products or unreliable suppliers; lower it for slow movers where overstock ties up cash.
How is a reorder point different from a low-stock alert?
A low-stock alert fires at a number you picked once, by hand. A reorder point is calculated from current sales pace and lead time — it moves when your business does.
Should reorder points be per variant?
Yes. Sizes and colors sell at very different rates; a style-level reorder point overstocks slow variants while the popular size stocks out.
