Inventory glossary

What is Reorder level?

Reorder level is the stock quantity that triggers a new purchase order for a SKU.

For a small Shopify store, reorder level turns guesswork into a rule. Instead of checking stock and wondering if it is time to order, you set a number per SKU and act when you hit it. This matters most for your bestsellers, where running out means lost sales, and for slow movers, where ordering too early ties up cash in stock you do not need yet.

To use it, calculate reorder level from how fast an item sells and how long the supplier takes to deliver, then add a buffer for delays or demand spikes. Review it when sales pick up, when a supplier's lead time changes, or after a season ends, since a fixed number set once will eventually be wrong in either direction.

Formula

Reorder level = (Average daily sales x Lead time in days) + Safety stock

Example

A candle shop sells 6 units a day of its lavender candle. The supplier's lead time is 10 days. The store keeps 15 units of safety stock. Reorder level = (6 x 10) + 15 = 75 units. When stock hits 75, the store places a new order.

Common mistakes

  • Setting one reorder level for all SKUs instead of calculating it per item's sales speed and lead time.
  • Forgetting to update the reorder level after a lead time changes or sales trend up or down.
  • Ignoring case pack sizes, so the reorder level does not line up with what the supplier actually ships in.

Reorder level and SteadyShelf

SteadyShelf calculates a reorder level per SKU from its sales forecast and each supplier's lead time, then tells you the order-by date instead of leaving you to track the number yourself.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

Related terms

Reorder point · Safety stock · Lead time · Average daily sales · Par level

Full inventory glossary

FAQ

Is reorder level the same as reorder point?

Yes, the two terms are used interchangeably. Both refer to the stock quantity that signals it is time to place a new order.

What happens if the reorder level is set too low?

You risk a stockout before the new order arrives, since there may not be enough stock left to cover sales during the supplier's lead time.

Let SteadyShelf do this math for every SKU

Order-by dates per supplier, seasonal forecasts and draft POs for your Shopify store. $29/month after a 30-day free trial.

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