How to Set a Reorder Point for Your Shopify Store

A reorder point is the inventory level that triggers a new purchase order. Set it correctly and you never run out. Set it too low and you lose sales. Set it too high and your cash sits on a shelf. Here is a simple method that works for small and mid-size stores.

The Basic Formula

The standard reorder point formula is straightforward:

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

Each part of the formula answers a different question. Daily sales velocity tells you how fast the product moves. Lead time tells you how long your supplier takes to deliver. Safety stock covers the gap when demand is higher than expected or the shipment is late.

Step 1: Calculate Daily Sales Velocity

Sales velocity is the average number of units sold per day. Pull the data from your Shopify analytics for the last 30 to 90 days. Use a longer window if the product is seasonal; use a shorter window if sales are growing or declining quickly.

Example: A t-shirt variant sold 150 units over the past 60 days. Daily sales velocity = 150 ÷ 60 = 2.5 units per day.

Do not include outlier days (flash sales, viral spikes) in the average unless those events are likely to repeat. The goal is to capture your typical selling rate, not your best day.

Step 2: Know Your Lead Time

Lead time is the number of days between placing a purchase order and receiving the stock. Ask your supplier if you do not know. For domestic suppliers it is often 3 to 7 days. For international suppliers it can be 14 to 45 days or more.

Use the real lead time, not the supplier's quoted lead time. If your supplier says 7 days but shipments consistently arrive in 10, use 10. Track a few orders to get an accurate number.

Example: Your supplier ships in 7 days on average. Lead time = 7 days.

Step 3: Add Safety Stock

Safety stock is a buffer against uncertainty. Demand might spike, or the shipment might be delayed by a few days. Without safety stock, any deviation from your average causes a stockout.

A simple approach for small stores: set safety stock to cover 2 to 3 extra days of sales. This is not mathematically optimal, but it is easy to calculate and works well for most products.

Example: Daily velocity is 2.5 units. Safety stock = 2.5 × 3 = 7.5, rounded up to 8 units.

Step 4: Put It Together

Reorder point = (2.5 × 7) + 8 = 17.5 + 8 = 25.5, rounded to 26 units.

This means: when you have 26 units left of this t-shirt variant, it is time to place a new order. At your current sales rate, those 26 units will last about 10 days (7 days of lead time + 3 days of buffer), which gives your supplier enough time to ship the replacement.

Different Products Need Different Reorder Points

The formula gives you a per-product number. Your bestseller might have a reorder point of 50 units while a slow mover sits at 5. This is expected — the whole point of calculating a reorder point is that it matches each product's actual demand and supply timing.

If you have hundreds of SKUs, start with your top 20 products by revenue. Calculate reorder points for those and use a shop-wide default (for example, 10 units) for everything else. You can refine over time as you see which products run out fastest.

How to Apply Reorder Points in Shopify

Shopify tracks inventory quantity but does not have a built-in reorder point field. You need a way to compare your current inventory against your reorder points and surface the products that need attention.

Option A: Manual spreadsheet

Export your inventory to a CSV, add a column for reorder points, and filter for products where quantity is at or below the reorder point. This works but is tedious to repeat daily. Most merchants who start with a spreadsheet abandon it within a few weeks.

Option B: Low-stock email app

An app like Restock Digest lets you set a default threshold (your shop-wide reorder point) and override it per variant for products that need a different number. Every morning, it sends a digest of everything at or below its threshold. You scan the email, place orders, and mark items ordered to snooze them for 7 days.

This automates the manual spreadsheet step. Instead of exporting and filtering, the list arrives in your inbox every morning, already sorted by vendor.

When to Review and Adjust

Reorder points are not set-and-forget. Review them at least monthly or whenever something changes:

• Seasonal shifts. A product that sells 1 unit per day in January might sell 10 per day in November. Increase the reorder point before the season starts, not after you run out.
• Supplier changes. If your lead time increases from 7 to 14 days, your reorder point needs to roughly double.
• New products. A product launch has no sales history. Start with a conservative reorder point and adjust after the first 30 days of data.
• Promotions. A marketing campaign will spike demand temporarily. Raise the reorder point for the duration of the promotion.

Common Mistakes

Using the same threshold for everything

A blanket threshold of 10 units might be fine for slow movers but dangerously low for your top seller. If you only use a single number, make it high enough to cover your fastest-selling product, which means most of your catalog will be flagged unnecessarily. Per-product thresholds fix this.

Ignoring lead time

Setting a reorder point without considering supplier lead time is the most common mistake. A threshold of 10 units means nothing if your supplier takes 3 weeks to deliver and the product sells 5 per day. Always factor in how long it takes to get stock after you order it.

Not acting on the signal

The reorder point only works if you act on it. A daily low-stock email that you ignore is no better than not having one. Build the habit: check the email every morning, place orders for what is low, and mark items ordered so the list stays clean.

Start Simple, Refine Over Time

The goal is not perfect precision. A rough reorder point that you act on consistently is better than a precise one that takes hours to calculate and maintain. Start with the formula above, use a daily email to surface what needs attention, and adjust the numbers as you learn your patterns.

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