Inventory how-to

How to choose days of cover for each product

Days of cover is how many days of future sales you want on hand after your next delivery arrives.

Short answer: Days of cover is how many days of future sales you want on hand after your next delivery arrives. Set it higher for cheap, fast-moving, hard-to-restock items and lower for expensive, slow-moving, or easy-to-restock items. There is no single right number, but you can set it logically per SKU using lead time, sales volatility, and cost.

Start from lead time, not a guess

Your days of cover should scale with how long it takes to get more stock. A SKU with a 60-day lead time needs more cover than one with a 7-day lead time, because you are exposed to demand changes for longer. A common starting point is to set days of cover roughly equal to your lead time, then adjust up or down from there.

Adjust for how unpredictable the product is

If a product's sales swing a lot week to week, add more days of cover so you are not caught short by a spike. If sales are flat and predictable, you can run with less cover and free up cash. New products with little sales history should get more conservative (higher) cover until you have enough data to trust the forecast.

Adjust for cost and storage

High-cost or bulky items tie up cash and shelf space, so keep their days of cover tighter even if that means ordering more often. Cheap, small items are usually fine with more cover since the holding cost is low. If a supplier has a high minimum order quantity, you may end up holding more cover than you want just to meet the minimum, and that is a trade-off to accept rather than fight.

Review it periodically, not once

Days of cover is not a set-and-forget number. Lead times change, suppliers change, and a product can go from steady to seasonal. Revisit the number whenever a supplier's lead time changes materially, or every few months as a routine check.

Step by step

  1. List each SKU with its supplier lead time.
  2. Set a baseline days of cover close to that lead time for each SKU.
  3. Add extra days of cover for SKUs with volatile or spiky sales.
  4. Reduce days of cover for expensive or bulky SKUs to limit cash tied up.
  5. Increase days of cover for new SKUs with limited sales history.
  6. Check supplier minimum order quantities and accept extra cover where needed to meet them.
  7. Revisit the numbers every few months or after any lead time change.

Worked example

A store sells a $15 candle at 4 units a day with a 14-day supplier lead time. They set days of cover at 21 days since demand is steady. Order quantity = 4 x (14 + 21) - (40 on hand + 0 on order) = 140 - 40 = 100 units. For a $300 espresso machine selling 0.5 units a day with the same 14-day lead time, they set days of cover at just 10 days to avoid tying up cash, giving order quantity = 0.5 x (14 + 10) - (5 on hand + 0 on order) = 12 - 5 = 7 units.

How SteadyShelf helps

SteadyShelf lets you set safety days and lead time per supplier and SKU, which function as your days of cover input, and it uses your 28-day sales window to calculate the resulting order quantity and order-by date automatically. It will not tell you the "right" days of cover for a product's risk profile or cash strategy, that judgment call is still yours.

$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

Should days of cover be the same for every product in my store

No. Products differ in lead time, sales volatility, and cost, so a single store-wide number will leave some SKUs overstocked and others at risk of stockout. Set it per SKU or per supplier group instead.

What happens if I set days of cover too high

You tie up more cash in inventory and risk holding stock longer than needed, which matters more for expensive or slow-moving items. It is a safer mistake than setting it too low, but it still has a real cost.

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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