Reorder Point = (Average Daily Sales × Lead Time) + Safety Stock. Sounds simple — but getting the inputs right is where most merchants go wrong. We break it down with real examples.
The reorder point is the stock level at which you need to place a new order so that fresh inventory arrives before you run out. It sounds simple. It is simple — but most merchants get at least one of the three inputs wrong, and that one mistake causes a stockout every time.
Average Daily Sales (ADS) is your total units sold in a period divided by the number of days in that period. The question is: which period should you use?
- Last 30 days — best for fast-moving products or recent trend changes
- Last 60 days — good balance between recency and smoothing out weekly noise
- Last 90 days — better for seasonal products where you want to capture the full cycle
- Do not use "all time" — your sales from 18 months ago are not a good predictor of next month
Tip
If your sales are growing (e.g. from a new ad campaign or influencer post), use a shorter window like 14–21 days. The most recent data is the most predictive when velocity is changing.
Lead time is the number of days between placing an order and receiving inventory in your warehouse. Most merchants use the optimistic number their supplier gives them. This is a mistake.
Use the realistic lead time — meaning the number it actually takes, including processing delays, transit variance, customs clearance (for imports), and your own receiving process. If your supplier says 7 days but you've received shipments in 9–12 days before, use 12.
| Scenario | Quoted Lead Time | Realistic Lead Time to Use |
|---|---|---|
| Domestic supplier (India) | 5 days | 7–9 days |
| Import (China / SE Asia) | 15 days | 20–25 days |
| Festival season (Oct–Nov) | 7 days | 14–18 days |
| New supplier (first order) | 10 days | 18–22 days |
Safety stock is the buffer inventory you keep to absorb demand spikes and supply delays. The simple formula for safety stock:
Choose your buffer days based on demand unpredictability. Stable, predictable products can use 5–7 days. Products that spike with ad spend or social sharing need 10–14 days.
Let's say you sell protein powder. Over the last 60 days you sold 480 units — that's 8 units per day. Your supplier in Pune takes 10 days realistically. You want a 7-day buffer.
Note
Reorder Point = (8 × 10) + (8 × 7) = 80 + 56 = 136 units. When your stock hits 136 units, place your order immediately.
This means if you currently have 200 units, you have about 8 days before you need to reorder. Not a crisis — but you should have it in your calendar.
For 5 products, you can maintain this in a spreadsheet. For 30, 50, or 200 SKUs, you need to update the numbers constantly as sales velocity changes. A product that was safe last week might be critical today if a video went viral.
Forestock calculates the reorder point for every product in your catalog automatically from your Shopify CSV — and tells you the specific calendar date by which you need to place the order, not just the stock level.
Try it free
Upload your CSV and see which products are at risk in 30 seconds.