Calculate your Reorder Point.
Calculate the inventory level at which you should place a new purchase order. Combine average daily demand, supplier lead time and safety stock to reduce stockouts without carrying unnecessary inventory.
Your inventory numbers
Enter the average number of units sold or used each day.
Enter the number of days between placing an order and receiving the inventory.
Add extra units to protect against demand increases or supplier delays.
Enter the number of units currently available for sale.
Optional. Used to estimate the inventory value represented by your reorder point.
AI Inventory Analysis
Enter your demand, lead time, safety stock and current inventory to receive an instant reorder analysis.
Stockouts and excess inventory both reduce profit.
MarginLab helps Shopify merchants monitor product profitability, inventory performance and margin risks so purchasing decisions are based on real business data.
How to use this Reorder Point Calculator
Enter your average daily demand, supplier lead time and safety stock. The calculator instantly determines the inventory level at which you should place your next purchase order, together with lead-time demand and stockout risk.
Add the average number of units sold or used each day for the product you want to analyze.
Enter how many days your supplier normally takes to deliver inventory and the extra units you keep as protection against delays or demand spikes.
Use the calculated reorder level to understand when to place your next purchase order before available inventory falls too low.
Reorder point formula explained
The reorder point identifies the inventory level at which you should place a new purchase order. It combines the expected demand during supplier lead time with your safety stock, helping you avoid stockouts while minimizing excess inventory.
Reorder point formula
This formula calculates the ideal inventory level for reordering based on expected sales during the replenishment period and an additional buffer for unexpected demand.
Lead time demand formula
Lead time demand estimates how many units you are expected to sell while waiting for your supplier to deliver the next shipment.
Example calculation
How to interpret your reorder point
A reorder point is not a fixed benchmark that applies to every product. It depends on daily demand, supplier lead time and safety stock. These inventory positions can help you understand when action may be required.
Critical
Inventory is dangerously low and may not cover demand until the next shipment arrives.
Reorder now
Available inventory has reached the calculated threshold and a new purchase order should be placed.
Healthy
Current inventory should cover expected demand, so immediate replenishment may not be necessary.
Possible excess
Inventory may be higher than required, increasing storage costs and tying up working capital.
- Recalculate reorder points when sales velocity or supplier lead times change.
- Seasonal products may require different reorder levels throughout the year.
- Safety stock protects against demand spikes, supplier delays and forecasting errors.
- MarginLab helps Shopify merchants connect inventory decisions with product performance and profitability.
Common reorder point mistakes
Many ecommerce businesses experience stockouts or excess inventory because their reorder point is based on assumptions rather than real demand. These are the most common mistakes that lead to poor inventory decisions.
Ignoring changing demand
Using outdated sales averages can produce reorder points that no longer reflect current customer demand, especially during seasonal periods.
Underestimating lead time
Supplier delays, shipping disruptions and longer production times can quickly result in stockouts if lead time is underestimated.
No safety stock
Without an adequate inventory buffer, unexpected demand spikes or delivery delays can leave products unavailable when customers are ready to buy.
Never updating reorder points
Reorder points should be reviewed regularly as sales velocity, supplier performance and inventory strategy change over time.
Why reorder points alone aren’t enough
A reorder point helps determine when to purchase more inventory, but it only represents one part of effective inventory management. A correct reorder level can still lead to poor results if demand, supplier performance or product profitability changes over time.
What a reorder point doesn’t show
- Whether product demand is increasing or declining.
- How reliable your supplier lead times are.
- Whether the product generates a healthy profit margin.
- How much working capital is tied up in inventory.
- Whether excess stock is becoming slow-moving or obsolete.
How MarginLab helps
MarginLab goes beyond a single reorder point calculation. It continuously analyzes product performance, sales trends, costs and profitability, helping Shopify merchants understand which products deserve more inventory and which may be tying up cash without generating enough profit.
Use this calculator to estimate the right replenishment threshold. Use MarginLab to continuously monitor product profitability and make better inventory decisions across your Shopify store.
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Analyze revenue, costs and margins to understand the true profitability of your Shopify store.Frequently asked questions
Here are the most common questions about reorder points, inventory replenishment and how to avoid stockouts.
What is a reorder point?
A reorder point is the inventory level at which a business should place a new purchase order. It is designed to ensure enough stock remains available while waiting for the next shipment to arrive.
How do you calculate a reorder point?
The standard formula is: Reorder Point = (Average Daily Demand × Lead Time) + Safety Stock.
What is lead time demand?
Lead time demand is the number of units expected to be sold or used while waiting for a supplier to deliver the next order. It is calculated by multiplying average daily demand by supplier lead time.
Why is safety stock included in the reorder point?
Safety stock provides an additional inventory buffer against unexpected demand, supplier delays, shipping disruptions and forecasting errors.
How often should reorder points be updated?
Reorder points should be reviewed whenever sales velocity, supplier lead time, seasonality or inventory strategy changes. Fast-moving products may require more frequent updates.
Can I use this calculator for Shopify inventory?
Yes. You can use it to estimate reorder points for products sold through Shopify or any other ecommerce platform, provided you know average daily demand, supplier lead time and safety stock.
Does MarginLab help with inventory decisions?
Yes. MarginLab helps Shopify merchants connect product sales, costs and profitability, making it easier to understand which products deserve more inventory and which may be tying up cash without generating enough profit.
A reorder point is useful.
Profitable inventory decisions are better.
This calculator helps you estimate when to place your next purchase order. MarginLab helps Shopify merchants understand which products deserve more inventory by combining sales performance, product costs and profit margins across the entire store. Instead of looking at stock levels alone, you can make replenishment decisions based on real profitability.
Product Profitability
Understand whether a product generates enough profit to justify additional inventory investment.
Inventory Visibility
Connect sales performance, product costs and margin data before placing new purchase orders.
Smarter Replenishment
Move beyond fixed reorder thresholds and prioritize products that support sustainable store profitability.
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