When to reorder stock: a plain guide to reorder points

Every store that buys stock answers the same two questions again and again: when should I reorder this, and how much should I buy? Get them wrong one way and you run out of your best sellers. Get them wrong the other way and your cash sits on a shelf.

The idea in one sentence

Reorder when the stock you have left will run out before a new delivery could arrive, plus a small cushion.

1. Know your daily sales

Start with how many you sell on a normal day. Use recent weeks, not last year's average, and leave out days when the item was out of stock: you sold zero because you had none, not because nobody wanted it. Counting those days as zero makes you order too little, which makes you run out again.

2. Know your lead time

Lead time is how long it takes from placing the order to having stock you can sell: the supplier's production time, shipping, and the day or two it takes to receive and shelve it. Ask each supplier, and check what actually happened on the last few orders.

3. Add a cushion: safety stock

Sales go up and down, and deliveries are sometimes late. Safety stock is the extra you keep to cover that. The more your sales jump around and the longer the lead time, the bigger the cushion needs to be. Your best sellers deserve a bigger cushion than slow lines, because running out of them costs more.

4. Put it together

• Reorder point = daily sales × (lead time + days until you next check) + safety stock.
• If you only review stock once a week, add those days: you need enough to last until the next review, not just until the delivery.

Example: you sell 8 black tees a day, the supplier takes 12 days, and you check stock weekly. 8 × (12 + 7) = 152, plus a cushion of 40 makes a reorder point of 192. When stock on hand plus stock already on order falls below 192, it's time to order.

How much to order

Order enough to cover sales until the next delivery after this one could arrive, plus the cushion, minus what you have and what's already on the way. Then adjust for the supplier's minimum order and pack size, and sanity check it against how much cash you want tied up.

What trips people up

• Promotions. A sale week can sell three times normal. Plan for it, and don't let one big week make every week look busy.
• Seasons. Using last month's sales for a December order underbuys; using December's for February overbuys.
• Stock on order. Forgetting what's already on the way leads to double orders.
• New items. With little history, start small and watch the first weeks closely.
• Too many items. Doing this by hand for 20 items is fine. For 2,000 it never gets done properly.

Letting someone else do it

This is exactly the job Cathy, wurkkin's inventory manager, does every morning for every item in a Shopify store: daily sales without the out of stock days, each supplier's lead time and minimums, your promotions, and a cushion sized to how much each item matters. She writes the order sheet and you decide whether to place it.