Inventory how-to

How to avoid stockouts

You avoid stockouts by knowing your daily sales rate per variant, your supplier lead time, and a safety buffer, then reordering before stock drops below that line.

Short answer: You avoid stockouts by knowing your daily sales rate per variant, your supplier lead time, and a safety buffer, then reordering before stock drops below that line. Most stockouts happen because someone checks stock levels too late or guesses at reorder timing instead of calculating it.

Why stockouts happen

Stockouts usually come from one of three gaps: nobody is watching the sales rate closely enough, the order-by date gets missed because lead times are not tracked per supplier, or the reorder quantity is too small to cover the time until the next delivery. Fast-selling variants are the most common casualty because they run out faster than anyone expects.

The core formula

Reorder point = daily sales x (lead time + safety days). When stock on hand drops to this number, you need to have already placed the order. Order quantity = daily sales x (lead time + days of cover) minus stock on hand and anything already on order. Days of stock = on hand divided by daily sales, which tells you how much runway you have right now.

Build a routine, not a one-off check

A single stock check before a busy period is not enough. Set a weekly cadence: pull current stock and recent sales for your top variants, recalculate days of stock, and flag anything close to its reorder point. Keep supplier lead times and minimum order quantities written down somewhere you can see them at a glance, not buried in old emails.

Pad for uncertainty, but not too much

Safety days exist to absorb delays and demand spikes. Longer or less reliable suppliers need more safety days. But padding every SKU heavily ties up cash in excess stock, so apply bigger buffers only to your best sellers or suppliers with inconsistent lead times.

Step by step

  1. List your top-selling variants and their current daily sales rate.
  2. Get an accurate lead time for each supplier, from order placed to stock received.
  3. Set a safety day buffer per supplier based on how reliable their lead time actually is.
  4. Calculate the reorder point for each variant: daily sales x (lead time + safety days).
  5. Check stock against reorder points at least weekly, not just when you remember.
  6. When a variant hits its reorder point, place the order the same day, rounded to case pack or minimum order size.
  7. Track what is already on order so you do not double up or under-order.

Worked example

Say a variant sells 6 units a day, the supplier's lead time is 10 days, and you keep 4 safety days. The reorder point is 6 x (10 + 4) = 84 units. If you want 20 days of cover after the order arrives, order quantity = 6 x (10 + 20) minus (on hand + on order). With 90 on hand and nothing on order, that is 6 x 30 minus 90 = 90 units to order, rounded up to the supplier's case pack size.

How SteadyShelf helps

SteadyShelf calculates reorder points and order-by dates per SKU automatically from your sales history and each supplier's lead time and safety days, then sends a weekly reorder email so you are not relying on memory. It forecasts per variant for the store as a whole, not per location, so if you stock multiple warehouses you still need to handle location-level splits manually.

$29/month flat, unlimited products and suppliers, 30-day free trial. Run the numbers now with the free reorder point calculator.

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FAQ

What if a variant is new and has no sales history yet?

Use a manual estimate based on similar products or pre-order interest until you have a few weeks of real sales data. Once there is enough history, switch to the calculated daily sales rate instead of the guess.

How many safety days should I use?

There is no fixed number. Start with a few days for reliable suppliers with short lead times, and add more for suppliers that are slow, inconsistent, or overseas. Adjust after you see how often you run close to zero stock.

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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