Reorder point calculator
Work out when to reorder and how much to order. Enter your daily sales, supplier lead time and safety stock, and see the formula worked through with your own numbers.
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Your numbers
The example is a product that sells 6 a day with a 12 day lead time. Change any field and the result updates.
Result
Binly does this for every product, automatically
Reorder points and suggested quantities from your real Shopify sales, grouped by supplier, so you stop recalculating by hand.
How the calculation works
The reorder point is the stock level at which you should place your next order, timed so that new stock lands before the old stock runs out. The standard formula is the same in every industry:
Reorder point = (average daily sales × lead time in days) + safety stock
With 6 units a day, a 12 day lead time and 20 units of safety stock, that is (6 × 12) + 20 = 92. When the units on hand plus the units already on order fall to 92, it is time to order.
Order quantity is a separate question
The reorder point says when. How much to order depends on how many days of sales you want each delivery to cover, your supplier's pack size and any minimum order quantity. This calculator takes those three and gives a practical order size.
Assumptions worth knowing
- It treats one product at a time. A real catalog needs this for every variant, which is where software helps.
- With the service level option, the safety stock covers variation in daily sales only. If your supplier's delivery time also varies a lot, add some days of buffer to lead time.
- It rounds the reorder point up to whole units, because you cannot hold part of a unit.
Related: How to set reorder points for your Shopify store · Shopify low stock alerts · Inventory forecasting
FAQ
Common questions
What is the reorder point formula?
Reorder point = (average daily sales × lead time in days) + safety stock. The first part is how many units you expect to sell while the next order is on its way. Safety stock is the buffer for sales or deliveries that run faster or slower than average.
How do I pick a safety stock number?
Three common ways. Enter units directly if you already have a number in mind. Enter days of sales, for example three days of average sales, which scales with how fast the product sells. Or choose a service level, such as 95 percent, and enter how much your daily sales vary, which gives z × standard deviation × the square root of lead time.
What does service level mean?
It is the chance of not running out of stock during a lead time. A 95 percent service level means you accept about one stockout in twenty order cycles. Higher levels need more safety stock, and the cost grows quickly above 99 percent.
How are order quantity, pack size and minimum order quantity used?
We take the number of days you want each order to cover, multiply by daily sales, round up to whole packs, and then raise it to your supplier's minimum order quantity if needed. The result is a practical order size, not a forecast.
What counts as lead time?
The days between placing the order and having the stock on the shelf ready to sell. Include production or picking time at the supplier, shipping, customs and the time it takes you to receive and put it away. Use your slowest typical delivery rather than the best one.
Does it work for products that sell unevenly or seasonally?
It assumes steady sales, so use a recent average from the selling period you are planning for. For seasonal items, calculate once for the peak and once for the off-season. Binly recalculates from your real sales history as it changes.
Stop calculating reorder points by hand.
See reorder points computed from your real sales data inside Binly.
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