How to Calculate Reorder Points: Formula, Examples & Calculator

What Is a Reorder Point?

A reorder point (ROP) is the inventory level that triggers a new order. When your stock hits this number, it's time to reorder from your supplier.

The goal: order early enough that new inventory arrives before you run out.

The Reorder Point Formula

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

Or simplified:

ROP = Lead Time Demand + Safety Stock

Let's break down each component.

Component 1: Average Daily Sales

How many units do you sell per day?

Average Daily Sales = Units Sold ÷ Number of Days

Example:

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

Tips:

• Use 30-90 days of data for stable products
• Adjust for seasonality if applicable
• Exclude outliers (one-time bulk orders, etc.)

Component 2: Lead Time

How long from placing an order to having inventory ready to sell?

Include all stages:

• Supplier processing time
• Manufacturing (if made to order)
• Shipping time
• Customs and import (if international)
• Receiving and quality check
• FBA processing (if using Amazon FBA)

Example:

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

Component 3: Safety Stock

Extra inventory to buffer against uncertainty. See our Safety Stock Guide for detailed calculations.

Simple approach:

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

Putting It Together

With our example numbers:

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

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

When you have 490 units, place your next order.

Worked Examples

Example 1: Shopify Store with Domestic Supplier

Situation:

• Selling 5 units/day
• US supplier, 7-day lead time
• Want 1 week safety stock

Calculation:

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

Result: Reorder when inventory hits 70 units.

Example 2: Amazon FBA with Overseas Supplier

Situation:

• Selling 20 units/day on Amazon
• China supplier, 45-day lead time
• FBA receiving adds 7 days
• Want 2 weeks safety stock

Calculation:

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

Result: Reorder when inventory hits 1,320 units.

Example 3: Multi-Channel Seller

Situation:

• Selling 8 units/day on Shopify
• Selling 12 units/day on Amazon
• Shared warehouse, 21-day lead time
• Want 2 weeks safety stock

Calculation:

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

Result: Reorder when combined inventory hits 700 units.

Reorder Point vs. Static vs. Dynamic

Static Reorder Points

Set once, reviewed periodically:

• Simple to implement
• Works for stable demand
• Can become outdated

Dynamic Reorder Points

Recalculated automatically based on current sales velocity:

• Always up-to-date
• Adjusts to trends
• Requires software support

ReplenishRadar uses dynamic reorder points that update with your sales data.

Common Reorder Point Mistakes

Mistake 1: Forgetting All Lead Time Components

Lead time isn't just shipping. Include:

• Supplier processing
• Manufacturing
• All transit time
• Customs/import
• Receiving
• FBA processing

Fix: Map your entire supply chain timeline.

Mistake 2: Using Old Sales Data

Last year's velocity may not reflect current demand.

Fix: Use recent 30-90 day data, adjusted for known trends.

Mistake 3: Ignoring Seasonality

Your reorder point for December should be different from June.

Fix: Adjust calculations for seasonal demand patterns.

Mistake 4: No Safety Stock

Running with zero buffer is risky.

Fix: Always include safety stock, even if minimal.

Mistake 5: Setting and Forgetting

Demand changes. Suppliers change. Your reorder points should too.

Fix: Review quarterly or when significant changes occur.

Reorder Point for Different Scenarios

Fast-Moving Products

High velocity, more predictable:

• Use shorter lookback period (30 days)
• Lower relative safety stock (1 week)
• More frequent orders

Slow-Moving Products

Low velocity, less predictable:

• Use longer lookback period (90 days)
• Higher relative safety stock (3-4 weeks)
• Less frequent, larger orders

Seasonal Products

Demand varies by season:

• Adjust forecasts for seasonal patterns
• Build inventory before peak season
• Reduce safety stock in off-season

New Products

No historical data:

• Use conservative estimates
• Start with high safety stock
• Adjust as data accumulates

Reorder Point for Amazon FBA

FBA adds complexity:

Account for FBA Processing

FBA receiving can take 1-2 weeks:

FBA Lead Time = Supplier Lead Time + Shipping + FBA Processing

Consider Restock Limits

You may not be able to maintain your ideal reorder point if Amazon limits your FBA inventory.

Plan for Transfer Time

If you ship from your warehouse to FBA, include that transfer time in your calculations.

Reorder Point for Multi-Channel

When selling on multiple channels:

Shared Inventory Pool

Calculate based on combined demand:

Combined Daily Sales = Shopify Sales + Amazon Sales

Split Inventory

Calculate separate reorder points for each location/channel.

Allocation Strategy

Decide how to split inventory between channels and set reorder points accordingly.

Automating Reorder Points

Manual calculation works but doesn't scale:

Spreadsheet Approach

1. Export sales data
2. Calculate average daily sales
3. Input lead times
4. Apply formula
5. Update regularly

Limitation: Time-consuming, easy to forget updates.

Software Approach

ReplenishRadar automatically:

• Calculates sales velocity
• Tracks lead times
• Sets dynamic reorder points
• Alerts when you hit the threshold
• Adjusts for seasonality

Quick Reference Table

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

Summary

The reorder point formula is simple:

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

The challenge is:

1. Accurate sales velocity
2. Complete lead time accounting
3. Appropriate safety stock
4. Regular updates

Get these right, and you'll always order at the right time.

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Related Reading:

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