The reorder point tells you when to order. Safety stock decides how much risk you're carrying when you do. Here's how both are calculated, what the numbers mean, and where small stores usually get them wrong.
From those:
The logic is simple: while you wait for a delivery, you keep selling. The reorder point is just "enough stock to cover the wait", plus a cushion.
Lead time is not the number the supplier quotes. It's the whole span from you placing the order to the stock being sellable — which includes the days before you actually place it, production, shipping, customs, and receiving/putaway at your end.
Measure it from your own records if you can: the gap between when you sent a purchase order and when the stock became available. If you've never measured it, take the supplier's quote and add a week. Most stores that stock out do it because they used the quoted number.
Pick a number of extra days you want to be covered for, and hold that much:
Seven to fourteen days is a sensible starting range. Use the low end for cheap, fast-moving, easily reordered items; the high end for anything with a long or unreliable lead time.
If your demand is fairly steady but deliveries are erratic, the risk lives in the lead time:
If a supplier normally takes 20 days but occasionally 35, you carry 15 days of sales as protection. This is often the single most useful formula for small importers.
If deliveries are dependable but sales jump around, size the buffer from how much daily demand actually varies — its standard deviation — scaled by how certain you want to be:
Z is the service level: about 1.65 for 95% (you accept stocking out roughly one replenishment cycle in twenty), 1.28 for 90%, 2.33 for 99%. Chasing 99% on everything is how stores end up with cash locked in dead stock.
The reorder point says when. Order quantity says how much, and it's a cash decision as much as an inventory one:
Two traps worth naming. First, forgetting stock already on order — that's how you accidentally double-order a slow supplier. Second, ordering to hit a supplier's free-shipping threshold on an item that sells 0.2 a day; the shipping saving is real, the eighteen months of shelf life is also real.
| Blue Widget | Red Gadget | |
|---|---|---|
| Sold in last 90 days | 270 | 45 |
| Sales velocity | 3.0/day | 0.5/day |
| Average lead time | 21 days | 10 days |
| Worst lead time seen | 35 days | 14 days |
| Safety stock (variability method) | 3.0 × 14 = 42 | 0.5 × 4 = 2 |
| Reorder point | (3.0 × 21) + 42 = 105 | (0.5 × 10) + 2 = 7 |
| Stock on hand | 40 | 60 |
| Action | Order now — already below the line | Nothing; ~120 days of cover |
The gadget is the more interesting case: it isn't at risk of stocking out, it's at risk of being overstocked. Days-of-stock-left is worth watching in both directions.
These formulas are easy for ten products and miserable for a thousand. Our free browser tool takes your Shopify Orders and Products exports and produces the whole table — velocity, reorder point, days of stock left, suggested order quantity — for every SKU. It runs entirely on your device; nothing is uploaded.
If you have open purchase orders, add a third CSV with SKU, quantity and expected date: those units are subtracted from the suggested quantities so you can't double-order, and anything already past its expected date is listed separately rather than counted as cover.
Honest limitation: no export contains your supplier lead times, so you supply those. Everything else is derived from your own sales history.
Open the Reorder Report tool →Drop your Orders + Products CSVs, get your reorder plan. Name your price — free if you need it.