Reorder Point Calculator

Reorder point example

Here is one hypothetical boutique example. The figures are an illustration of the method, not a target for your store.

When available inventory of that product falls to around 44 units, the retailer would consider placing the replenishment order. The 36 units cover what is expected to sell while the order is in transit, and the 8 units are the cushion for a faster week or a late delivery.

Which inventory number do you compare it against?

The reorder point is compared against your available inventory for that product, which in a simple boutique setup is the units on hand you could sell today. Two adjustments matter if your system tracks them:

• Units already on purchase order. If a shipment of the same product is already on its way, counting it stops you ordering twice for the same gap.
• Committed or reserved units. Pieces held for a customer, promised to a pending online order, or packed for an event are not available to sell on the floor.

This calculator assumes you are comparing the reorder point against units on hand, which is how most small stores run it. If you track incoming and reserved units, subtract the reserved and add the incoming before you compare, and apply the same rule every time so your numbers stay consistent.

What each input means

Average daily unit sales

Use real sales history where you have it rather than an impression of how the product feels. Pull the units sold for one product over a recent window and divide by the days in that window. For a seasonal or fast-changing product, a shorter and more relevant window describes current demand better than a long average that includes months when the item barely sold.

Lead time

Lead time is the number of days between placing the order and having the inventory available to sell. That includes the supplier's production or pick time, transit, and the time it takes you to receive, tag and put the stock out. Suppliers differ widely, and the same supplier can differ by season, so ask rather than assume, and use the timing that actually applies to this product.

Safety stock

Safety stock is extra inventory held to absorb uncertainty: demand that varies week to week, a supplier who ships late, or a delivery that waits in the back before it reaches the floor. There is no universal percentage that is right for every product. A staple with steady sales and a reliable vendor needs less cushion than a bestseller with a long and unpredictable lead time, and the cost of holding the buffer has to be weighed against the cost of running out.

When the average can mislead you

A reorder point built on historical average demand assumes the next few weeks look like the last few. Recheck it when:

• The product is strongly seasonal and you are heading into or out of its window.
• Demand is clearly accelerating or declining rather than sitting flat.
• A promotion, launch or event is about to pull demand forward.
• The supplier's lead time has changed, which happens around holidays and market weeks.

You do not need a forecasting model for this. Recalculating with a more recent selling window and the current lead time covers most of it.

Reorder points and fashion inventory

Reorder points earn their keep on merchandise you can buy again:

• Basics and core styles you carry continuously.
• Evergreen products that sell all year.
• Replenishable bestsellers the vendor keeps in stock.
• Accessories, jewelry and gift items that reorder easily.
• Staples such as a house tee, a signature candle or a packaging item.

They are much less useful for:

• One-time fashion buys that will never be repeated.
• Limited seasonal drops with a fixed selling window.
• Products the vendor has already discontinued or cannot replenish.
• Inventory you keep deliberately scarce as part of the brand.

For those, the useful questions are how fast the units are selling and when to mark down, which the sell-through calculator handles. The wider routine for counting, receiving and replenishing sits in the retail inventory management guide.

Reorder point versus par level

The two are often confused because they are used together. The reorder point answers when should I reorder. A par level answers what stock level am I trying to maintain, so when the count drops below par you order back up to it. In practice the reorder point triggers the order and the par level decides how many units the order contains. Par level is covered alongside the rest of the formulas in the retail math formulas hub.

Reorder point versus open-to-buy

Hitting the reorder point does not mean the money is there. The reorder point is a timing signal for one product. Open-to-buy is the budget question: how much you can still spend on inventory this month or this season across everything you carry. A product can be sitting right on its trigger while the buying budget is already spent, and that is a cash decision rather than a replenishment error. Run the numbers in the open-to-buy calculator or read the open-to-buy guide.

Reorder point versus weeks of supply

Weeks of supply estimates how long your current stock will last at the recent selling pace. The reorder point is the trigger you act on. They pair well: if weeks of supply is shorter than your lead time, the replacement lands after the shelf is empty. The formula for weeks of supply, along with turnover and stock-to-sales, is in the retail math hub, and how fast your whole stock investment recycles is in the inventory turnover calculator.

Common reorder point mistakes

• Using sales revenue instead of unit sales, which mixes pricing into a stock count.
• Leaving supplier lead time out, so the order is placed once the shelf is already bare.
• Assuming lead time never changes, when holidays and market weeks routinely stretch it.
• Applying one reorder point to every SKU, even though demand and lead time differ by product.
• Running on sales velocity from months ago after demand has moved.
• Adding a round number of safety stock without knowing what it is protecting against.
• Setting reorder points on products the vendor cannot actually replenish.

How to read your number

There is no good or bad reorder point, and no benchmark to compare yours against. The figure is specific to one product and moves with demand, lead time, safety stock, supplier reliability, seasonality and whether the item can be replenished at all. A 6-unit trigger and a 200-unit trigger can both be right in the same store on the same day. What makes the number useful is that it is yours and that you recalculate it when the inputs change.

If you are still working out how much inventory to carry in the first place, the starting-stock question is covered in how much inventory to start a boutique.

If stock keeps running out on the styles that sell and sitting on the ones that do not, the cause is usually buying rather than triggers. The Boutique Store Audit works through it with you.