Inventory glossary
What is Target stock level?
Target stock level is the amount of inventory you want to have on hand at a given point in time, usually set to cover expected sales plus a safety buffer until the next delivery arrives.
A target stock level gives you a number to aim for instead of guessing when you look at a SKU. Without it, reorder decisions become a gut feeling based on how empty a shelf looks, which leads to either too many purchase orders or too many stockouts.
Set a target stock level per SKU or variant, based on how fast it sells and how long your supplier takes to deliver. Use it to decide how much to order each time you reorder, by subtracting what you already have and what is already on order from the target.
Formula
Example
A candle store sells 6 units of its Vanilla Oak candle per day on average. The supplier lead time is 10 days, and the store keeps 20 units of safety stock. Target stock level = (6 x 10) + 20 = 80 units. If on hand stock plus incoming stock drops below 80, it is time to reorder up to that level.
Common mistakes
- Setting one target level for all SKUs instead of adjusting for each item's sales speed and lead time.
- Forgetting to update the target when sales trends change, so it goes stale after a busy season.
- Confusing target stock level with reorder point, they answer different questions but often get mixed up.
Target stock level and SteadyShelf
SteadyShelf forecasts sales per variant and uses each supplier's lead time to suggest an order quantity that brings stock back up to a sensible target level, rounded to case packs.
SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.
Related terms
Reorder point · Safety stock · Par level · Min max inventory · Average daily sales
FAQ
How is target stock level different from reorder point?
Reorder point is the trigger, the stock level at which you place a new order. Target stock level is the goal, the amount you want to have after that order arrives. You order up to the target when you hit the reorder point.
Should target stock level be the same for every product?
No. Fast-selling items or items with long supplier lead times need a higher target, while slow movers with quick delivery can have a much lower one. Calculate it per SKU for better results.
Let SteadyShelf do this math for every SKU
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