To calculate a reorder point, multiply your average daily sales by your lead time in days, then add safety stock. Selling 12 units a day with a 14-day lead time uses 168 units while you wait; with 192 units of safety stock, you reorder when stock falls to 360. Order then, and the new stock arrives before you run out.
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If you only need the number, our free reorder point calculator works it out from your daily sales, lead time and stock, and also shows days of stock left, a reorder-by date and a suggested order size. It runs in your browser and nothing you type is sent anywhere. This guide explains the formula, the two common ways to set safety stock, how to count lead time properly (including for Amazon FBA), and how to plan ahead of a busy season.
- Reorder point = average daily sales × lead time (days) + safety stock.
- Safety stock (simple, cautious): highest daily sales × longest lead time, minus average daily sales × average lead time.
- Lead time is door to sellable: production, shipping, customs and warehouse check-in, not just the supplier's quote.
- Seasonal demand breaks averages. Before a peak, use the daily sales you expect then, not last month's.
- Recalculate monthly and whenever a supplier, carrier or sales rate changes.
What is a reorder point?
A reorder point (ROP) is the stock level that tells you to place the next purchase order. It's set so the stock you have left covers sales during the lead time, with a buffer for bad weeks. Hit the number, order, and you shouldn't sell out before the new units are on the shelf.
It answers "when do I order?". It doesn't tell you how much to order; that's a separate decision covered further down.
What is the reorder point formula?
Reorder point = (average daily sales × lead time in days) + safety stock.
| Input | What it means | Where to find it |
|---|---|---|
| Average daily sales | Units sold per day, averaged over a recent normal period | Units sold in the last 30, 60 or 90 days ÷ the number of days |
| Lead time | Days from placing the order to units being available to sell | Your last few orders: order date to sellable date |
| Safety stock | Extra units held for faster sales or slower delivery than usual | One of the two methods below |
Worked example
- You sold 360 units in the last 30 days, so average daily sales are 360 ÷ 30 = 12.
- Your supplier usually takes 14 days from order to units in your warehouse: lead-time demand is 12 × 14 = 168 units.
- Your busiest day in that period was 18 units and your slowest delivery took 20 days. Safety stock is 18 × 20 − 12 × 14 = 360 − 168 = 192 units.
- Reorder point = 168 + 192 = 360 units. When stock on hand (plus anything already on order) drops to 360, place the next order.
Enter your daily sales, lead time and stock to get the reorder point, safety stock and a reorder-by date. Free, no sign-up, nothing leaves your device.
Open the calculator7 days free · 50 credits · No credit cardHow do I calculate safety stock?
Small sellers mostly use one of two methods. Pick one and use it consistently.
| Method | Formula | Good for | Watch out for |
|---|---|---|---|
| Worst case (max-average) | (max daily sales × max lead time) − (avg daily sales × avg lead time) | Small catalogs, little data, products you can't afford to run out of | Can hold more stock than you need if one freak day sets the maximum |
| Statistical (service level) | Z × standard deviation of daily demand × √lead time | Steady sellers with months of daily sales data | Needs clean data; assumes demand varies randomly, not seasonally |
| Days of cover | Average daily sales × a fixed number of buffer days (for example 7) | A quick rule while you collect data | Ignores how variable your supplier is |
In the statistical method, Z is set by how often you're willing to run out during a lead time: about 1.65 for a 95% service level and 2.33 for 99%. Higher service levels cost more in stock you pay for and store. For most small shops, the worst-case method is simpler and safe enough; drop any one-off spike (a viral post, a bulk order) before you pick the maximum.
Every unit of buffer is cash tied up plus storage fees. Hold more safety stock on best sellers with long, unreliable lead times, and less on slow sellers you can restock quickly. Our profit margin calculator helps you see what a unit is really worth before you decide how many to hold.
How do I work out lead time?
Count every day from the moment you place the order to the moment a customer can buy the unit. Suppliers quote production time; sellers run out because they forget the rest.
| Stage | Typical items to include |
|---|---|
| Order processing | Deposit payment, proof or sample approval, the supplier confirming the order |
| Production | Manufacturing, packing, quality checks |
| Freight | Pickup, sea, air or road transit, port waits |
| Customs and delivery | Clearance, duties, final-mile delivery to you or your warehouse |
| Receiving | Counting, labeling, putting away; for Amazon FBA, the time until units show as available in your inventory |
Use the average of your last few orders as the lead time, and the slowest one as the maximum for safety stock. If you ship by sea, our CBM calculator works out carton volume and rough container fill so you can get freight quotes early.
Reorder points for Amazon FBA
For FBA, lead time ends when units are available to sell, not when the carrier drops them at the fulfillment center. Receiving slows down in busy months, so add buffer days for the fourth quarter. Amazon's own Restock Inventory page in Seller Central suggests quantities and dates from your sales; compare its numbers with your own, and keep your FBA capacity limits in mind, since an order you can't send in doesn't help. Amazon changes holiday cut-off dates and fees each year, so check the current announcements in Seller Central before you plan peak orders.
How much should I order when I hit the reorder point?
A simple, practical rule: order enough to cover the lead time plus the number of days you want each order to last, plus safety stock, minus what you have and what's already on order.
Order quantity = avg daily sales × (lead time + days of cover) + safety stock − stock on hand − stock on order.
With 12 a day, a 14-day lead time, 60 days of cover, 192 safety stock and 400 units on hand: 12 × 74 + 192 − 400 = 680 units. Then round to your supplier's case pack or minimum order quantity. Bigger orders usually get a lower unit price but tie up cash longer, so check the trade-off with our break-even calculator before you commit.
How do I set reorder points before a busy season?
The formula uses an average, and an average from a quiet month will under-order for a peak. Plan the season separately:
- Look up the same weeks last year and how much sales rose against the month before.
- Apply that rise to your current daily sales to get an expected peak daily rate.
- Lengthen lead times for the season: factories, carriers and warehouses all slow down.
- Recalculate the reorder point with the peak rate and peak lead time, and place peak orders early enough that they arrive before the rush.
- After the peak, switch back to normal numbers so you don't over-order into a quiet January.
Common reorder point mistakes
- Ignoring stock already on order. Count incoming units, or you'll order twice.
- Using the supplier's production time as the lead time. Add freight, customs and receiving.
- Averaging over a stockout. Days you had nothing to sell show zero sales and drag the average down. Leave them out.
- One reorder point for every variant. Each size and color sells at its own rate; give each SKU its own number. A clear SKU system makes that easier.
- Never updating it. Recalculate monthly and after any change in supplier, shipping method or sales trend.
Frequently asked questions
What is the formula for reorder point?
Reorder point = average daily sales × lead time in days + safety stock. Selling 12 a day with a 14-day lead time and 192 units of safety stock gives 12 × 14 + 192 = 360 units.
How do you calculate safety stock simply?
Multiply your highest daily sales by your longest lead time, then subtract average daily sales × average lead time. With 18 × 20 − 12 × 14 you get 192 units.
Is the reorder point the same as the order quantity?
No. The reorder point is when to order; the order quantity is how much. Work out the quantity from the days of stock you want each order to cover, then round to the supplier's case pack or minimum.
What if I don't have safety stock?
Then your reorder point equals lead-time demand, and any faster week or late delivery means a stockout. Even a small buffer, such as a week of average sales, helps.
How often should I recalculate my reorder point?
Monthly for most shops, and right away when your supplier, shipping method or sales rate changes. Before a busy season, recalculate with the sales you expect then.
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