How to Calculate Reorder Points: Formula, Examples & Calculator

The Number That Decides Whether You Stock Out

A reorder point is a single number. When your inventory drops to that number, you place a new order. Get it right and new stock arrives just as you need it. Get it wrong and you either stock out or over-order.

I have watched sellers lose weeks of sales because their reorder point was based on a lead time they entered once and never updated. The supplier got slower, the reorder point stayed the same, and by the time they placed the order it was already too late.

The formula is simple. The discipline of keeping it current is the hard part.

The Formula

Reorder Point = (Average Daily Sales x Lead Time) + Safety Stock

Or shorter:

ROP = Lead Time Demand + Safety Stock

Three components. Each one requires real data, not guesses.

Average Daily Sales

How many units do you sell per day? Pull real numbers:

Average Daily Sales = Units Sold / Number of Days

Example:

Last 30 days: 300 units sold
Average Daily Sales: 300 / 30 = 10 units/day

Use 30-90 days of data for stable products. Adjust for seasonality -- your December velocity is not your March velocity. And exclude one-time bulk orders that would skew the average. I had a B2B order for 200 units throw off my velocity calculation for a month until I caught it.

Lead Time

Lead time is not just "how long shipping takes." It is every day between placing the order and having inventory ready to sell:

Supplier processing: 3 days
Ocean shipping: 25 days
Customs/port: 5 days
Receiving: 2 days
Total Lead Time: 35 days

For FBA sellers, add FBA processing time. That can be 3-14 days depending on the season and fulfillment center backlog. During Q4 check-in delays, I have seen FBA receiving take three weeks.

Safety Stock

This is your buffer against the unexpected. Demand spikes, shipping delays, supplier problems. The detailed math is in our safety stock calculation guide. For a quick starting point:

Safety Stock = Average Daily Sales x Safety Days
Safety Stock = 10 units x 14 days = 140 units

Two weeks of buffer works for most products with stable demand and reliable suppliers. Higher variability or longer lead times warrant more.

Putting It Together

With our example numbers:

Average Daily Sales: 10 units
Lead Time: 35 days
Safety Stock: 140 units

Reorder Point = (10 x 35) + 140
Reorder Point = 350 + 140
Reorder Point = 490 units

When you have 490 units, place your next order. Not 500. Not "soon." 490.

Worked Examples

Shopify store with domestic supplier

Selling 5 units/day. US supplier with 7-day lead time. You want 1 week of safety stock.

Lead Time Demand: 5 x 7 = 35 units
Safety Stock: 5 x 7 = 35 units
Reorder Point: 35 + 35 = 70 units

Reorder at 70 units. With a domestic supplier this tight, you could even run with 5 days of safety stock and reorder at 60 -- the risk is low because a late domestic shipment is 2-3 days, not 2-3 weeks.

Amazon FBA with overseas supplier

Selling 20 units/day. China supplier with 45-day lead time. FBA receiving adds 7 days. You want 2 weeks of safety stock.

Total Lead Time: 45 + 7 = 52 days
Lead Time Demand: 20 x 52 = 1,040 units
Safety Stock: 20 x 14 = 280 units
Reorder Point: 1,040 + 280 = 1,320 units

Reorder at 1,320 units. That is a lot of inventory to maintain, which is why overseas sourcing with FBA requires significant capital. At $8 per unit cost, you need $10,560 worth of inventory just to hit the reorder trigger.

Multi-channel seller

Selling 8 units/day on Shopify and 12 units/day on Amazon. Shared warehouse with 21-day lead time. You want 2 weeks of safety stock.

Combined Daily Sales: 8 + 12 = 20 units
Lead Time Demand: 20 x 21 = 420 units
Safety Stock: 20 x 14 = 280 units
Reorder Point: 420 + 280 = 700 units

Reorder at 700 combined units across both channels. For more on multi-channel math, see our guide on multi-channel inventory challenges.

Quick Reference

Daily Sales	Lead Time	Safety Days	Reorder Point
5 units	7 days	7	70 units
10 units	14 days	14	280 units
10 units	30 days	14	440 units
20 units	45 days	14	1,180 units
50 units	60 days	14	3,700 units

The jump from domestic to overseas suppliers is stark. A 7-day lead time needs 70 units at the trigger. A 60-day lead time needs 3,700. This is why lead time accuracy matters so much -- a 10% error on a 60-day lead time is 6 days, which at 50 units/day is 300 units of miscalculation.

Static vs. Dynamic Reorder Points

Static reorder points get set once and reviewed periodically. They work for products with stable demand and reliable suppliers. Most sellers start here.

Dynamic reorder points recalculate automatically as your sales velocity changes. If your product starts selling 15 units per day instead of 10, the reorder point adjusts without you touching a spreadsheet. This is better. Significantly better. I switched from static to dynamic and caught two potential stockouts in the first month that my old fixed numbers would have missed.

The catch: dynamic reorder points require software. Spreadsheets can do it but you need to update velocity calculations frequently and remember to propagate changes. Which you will not do on your busiest week.

Five Mistakes That Cause Stockouts

Forgetting lead time components. Lead time is not just ocean shipping. Include supplier processing, manufacturing, all transit, customs, receiving, and FBA processing. Map your entire supply chain timeline end to end. I missed customs delays for six months until I started tracking actual receipt dates against PO dates.

Using old sales data. A velocity from six months ago does not reflect today's demand. Use the most recent 30-90 days, adjusted for trends you can see.

Ignoring seasonality. Your reorder point for November should be different from June. If Q4 is 3x your normal velocity, your reorder point needs to reflect that before November starts.

Running without safety stock. Zero buffer means any deviation -- demand spike, late shipment, anything -- results in a stockout. Always include safety stock. The question is how much, not whether.

Setting and forgetting. Demand changes. Suppliers change. Lead times shift. Review reorder points quarterly, or whenever you see a significant change in velocity or supplier performance.

Automating the Math

The reorder point formula is simple enough to run in a spreadsheet. The problem is doing it for 100+ SKUs and keeping the inputs current. Most sellers start with a spreadsheet, maintain it for a few months, then stop updating it right around the time their catalog grows past the point where manual tracking works.

If you want this check to happen without you thinking about it, an AI agent connected to your inventory data can monitor every SKU's position against its reorder point and alert you the moment one crosses the threshold.

We built ReplenishRadar to handle this automatically. The system calculates your velocity from recent sales, tracks your actual lead times from PO history (not the number you entered once), and adjusts your reorder points as the data changes. When a SKU hits its reorder point, you get an alert with a suggested order quantity. No spreadsheet to forget to update on a Friday afternoon before a holiday weekend.

Try ReplenishRadar free for 14 days ->

The formula fits in one line. The discipline of keeping it current across your entire catalog is what separates sellers who reorder on time from sellers who discover they needed to order two weeks ago.

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Related Reading:

• Safety Stock Calculation Guide
• Inventory Forecasting 101
• E-commerce Inventory Management Guide