When to Reorder Inventory
Learn the reorder point formula, how to calculate safety stock, and when to trigger your next purchase order to avoid stockouts.
Reorder too early and you tie up cash in inventory sitting in a warehouse. Reorder too late and you stock out, lose sales, and watch your organic ranking drop. The goal is to place your purchase order at exactly the right time so new inventory arrives just as your current stock runs low. This guide gives you the formula and a step-by-step process to calculate that moment.
The Reorder Point Formula
The reorder point is the inventory level at which you should place your next purchase order.
Reorder Point = (Average Daily Sales × Lead Time in Days) + Safety Stock
When your inventory on hand drops to this number, place your next purchase order.
Safety Stock (simplified)
Safety Stock = (Maximum Daily Sales − Average Daily Sales) × Lead Time Variability in Days
Or use the practical shortcut: multiply your average daily sales by 7–14 days of buffer depending on supplier reliability.
Let us break down each component.
Component 1: Average Daily Sales
Use your last 30 days of sales data as a starting point. If your product is seasonal, use 30-day data from the same period last year or weight recent weeks more heavily.
Example: You sold 420 units in the last 30 days. Average daily sales = 420 / 30 = 14 units/day.
Watch out for anomalies. If you ran a Lightning Deal that generated 80 extra units in one day, exclude that day from your average or it will inflate your reorder point.
Component 2: Lead Time
Lead time is the total number of days from when you place a purchase order to when units are checked in and available for sale on Amazon. This typically includes:
- Manufacturing time: 15–30 days for most products from Chinese suppliers
- Quality inspection: 2–5 days
- Freight transit: 25–35 days by sea, 7–10 days by air
- Customs clearance: 2–7 days
- Domestic trucking to FBA: 3–7 days
- FBA check-in and processing: 5–14 days (can spike during Q4)
A typical sea-freight timeline from China to FBA is 55–90 days total. Use your actual historical data, not the best-case scenario. If your last three shipments took 62, 70, and 68 days, use 70 (the upper end of your range) as your planning lead time.
Component 3: Safety Stock
Safety stock is your buffer against variability in both demand and supply chain timing. Without it, any delay or sales spike causes a stockout.
A simpler approach that works for most Amazon sellers: carry 7–14 days of extra inventory as safety stock. If your average daily sales are 14 units, that means 98–196 extra units.
How many days of safety stock you carry depends on two things:
- Supply chain reliability: If your supplier frequently ships late, carry more safety stock (14+ days).
- Demand variability: If daily sales fluctuate significantly (e.g., 8 units one day, 22 the next), carry more buffer.
For products with steady demand and reliable suppliers, 7 days of safety stock is often sufficient. For new products or products with unpredictable demand, 14–21 days is safer.
Worked Example
The table below walks through a complete reorder calculation for a single product:
| Input | Value |
|---|---|
| Units sold in last 30 days | 420 units |
| Average daily sales | 14 units/day (420 ÷ 30) |
| Manufacturing time | 20 days |
| Ocean freight transit | 30 days |
| Customs + domestic trucking | 10 days |
| FBA check-in and processing | 10 days |
| Total lead time (upper end) | 70 days |
| Safety stock (10 days) | 140 units (14 × 10) |
| Reorder Point | 1,120 units (14 × 70 + 140) |
When your FBA inventory drops to 1,120 units, place your next purchase order. Your order quantity should be enough to cover sales during the next lead time cycle, typically another 980–1,120 units depending on growth projections.
Adjusting for Seasonality
If your product sells 2x volume in Q4, your reorder point needs to increase ahead of the spike — not during it. Key timing guidelines:
- Place your Q4 reorder by early August if shipping by sea (70+ day lead time).
- Use last year's Q4 daily sales as your baseline, not current daily sales.
- Increase safety stock to 14–21 days during peak season because FBA check-in times slow down in October and November.
Common Mistakes
- Using best-case lead times: Your supplier says 15 days production, but it has taken 25 days twice this year. Plan for 25.
- Ignoring FBA check-in delays: During peak season, FBA check-in can take 2–3 weeks. Build this into your lead time.
- Not tracking daily sales trends: If your daily sales are climbing 10% month-over-month, your reorder point from two months ago is already outdated.
- Ordering too little to save cash: A stockout costs far more than the carrying cost of extra inventory. If storage fees are $0.15/unit/month and your profit per sale is $8, one missed sale costs more than storing 53 extra units for a month.
Setting Up Reorder Alerts
Do not rely on memory. Set up automated alerts when your inventory hits the reorder point. Options include:
- Amazon's Restock Inventory report in Seller Central
- Spreadsheet with daily inventory tracking and conditional formatting
- Third-party inventory management tools with email or SMS alerts
Review and recalculate your reorder point at least monthly, or after any significant change in sales velocity, supplier lead time, or FBA processing times.