Stock levels
What is the reorder point formula?
Reorder point = units sold per day × days your supplier takes to deliver, plus a buffer for surprises. When a product’s stock falls to that number, it’s time to order.
The formula
Reorder point = (units sold per day × delivery days) + buffer
- Work out units sold per day. Take what sold in the last 90 days and divide by that number, so one big weekend doesn’t fool it. Count each size and colour as its own product.
- Find your delivery days. How long your supplier takes from your order to stock on your shelf, on a normal order rather than their best one.
- Choose a buffer. There’s no official size. It pays for a late delivery or a better week than usual. The example below keeps 7 days of sales.
A worked example
A made-up example, with a buffer of 7 days of sales on every product.
| Product | Sold in 90 days | Per day | Delivery days | Reorder at |
|---|---|---|---|---|
| Wool socks | 270 | 3 | 14 | 63 |
| Canvas tote | 90 | 1 | 21 | 28 |
| Leather belt | 45 | 0.5 | 14 | 11 |
| Linen shirt | 0 | 0 | 14 | none |
The socks: 3 a day for 14 days is 42, and 7 days of buffer is 21 more, so reorder at 63. The belt comes to 10.5, so round it up. The shirt has no reorder point at all: nothing sold, so the question is whether it’s dead stock, not when to buy more.
When does the formula mislead?
- The product ran out. It couldn’t sell while it was gone, so the average reads lower than what people wanted.
- The season is turning. The last 90 days say little about the next 90 for a winter coat in February.
- It’s new. With a few weeks of sales, the average is still a guess.
Reorder point or days of cover?
They answer the same question. Reordering at 63 socks is the same as reordering when days of cover drops below 21: 14 days to deliver, plus 7 of buffer. Days of cover moves by itself as sales change, where a reorder point stays what you wrote down until you change it.
How does Verity do it?
Two ways. Reorder alerts lists products at or below a reorder point, where your file gives one. Running out soon needs none: it works out how fast each product really sells, and lists what will run out before a delivery could arrive. Where a product has no delivery time on file, it uses one you choose, 21 days to begin with.
Want to see it for every product? Take the tour and open Running out soon on an example shop.