How much stock is enough? A plain guide to reorder points

Too little stock and you lose the sale. Too much and your cash is sitting on a shelf. A reorder point is the stock level at which you should place your next order, so the new stock arrives just before the old runs out.

The formula

Reorder point = what you sell per day × days for delivery + a safety cushion

An example: you sell 48 units of an item a day, the supplier takes 3 days to deliver, and you keep a cushion of 24 units for surprises. Reorder when stock falls to 48 × 3 + 24 = 168 units.

The two numbers people get wrong

• What you sell per day. Use recent sales, not last year's. And beware: when you run out, sales fall to zero — that isn't low demand, it's no stock. Look at days when you had stock.
• Days for delivery. Use how long it really takes, including the bad weeks, not what the supplier promises. If deliveries vary a lot, make the cushion bigger.

Choosing the cushion

The cushion covers two things: demand being higher than usual, and delivery being later than usual. Fast-moving, important items deserve a bigger one. Slow, cheap or easily replaced items can carry a smaller one.

Think in days of stock, too

It helps to also ask: at today's rate of selling, how many days will this last? An item with 96 units and 48 sold a day has 2 days left. If delivery takes 3, you are already late — which is exactly why it should be raised before it happens.

How often to recompute

Demand shifts with seasons, festivals and schemes. Recomputing reorder points every week keeps them close to reality without becoming a chore.

How Distiqo helps

Distiqo recomputes reorder levels for your items every Monday from your own order history. When something is about to run out, you get a low-stock alert on WhatsApp, and Distiqo can suggest the purchase order for you to approve. After the goods arrive, it checks the supplier's bill against your order.