Inventory how-to

How to decide how much inventory to order the first time

For a first order you have no sales history, so you cannot forecast from past demand.

Short answer: For a first order you have no sales history, so you cannot forecast from past demand. Instead you estimate weekly demand from a comparable product or your best guess, pick a number of weeks of cover you are comfortable holding, and order to that level while respecting case packs and supplier minimums.

Start with a demand guess, not a forecast

With a brand new SKU there is no sales data to lean on. Use the closest comparable product you already sell, or a conservative estimate based on page views, pre-orders, wishlist adds, or what similar stores in your niche seem to move. Write the guess down as units per week. Treat it as a placeholder you will correct fast once real sales come in.

Decide how many weeks of cover you want

For a new product, shorter cover is safer than long cover. Four to eight weeks of stock is a common starting range for small stores, because it limits cash tied up in an unproven item and lets you reorder with real data once you have three or four weeks of actual sales. Slower-moving or higher-priced items usually justify less cover, not more.

Account for lead time before the first sale

Your first order also has to cover the supplier's lead time, since you will have zero stock while you wait for it to arrive. Add the lead time in weeks to your chosen cover period. If lead time is 3 weeks and you want 5 weeks of cover after launch, order enough for 8 weeks of estimated demand.

Round to case packs and minimums, then plan to correct early

Suppliers often sell in case packs or require a minimum order quantity. Round your calculated quantity up to the nearest case pack or minimum, but do not round up by much more than necessary just to hit a supplier's number. Plan to review this SKU again after 3 to 4 weeks of real sales and adjust the next order rather than trying to get the first one perfect.

Step by step

  1. Estimate weekly demand from a comparable product or your best judgment.
  2. Pick a cover period for the post-launch phase, commonly 4 to 8 weeks for an unproven item.
  3. Add the supplier's lead time in weeks to that cover period.
  4. Multiply estimated weekly demand by total weeks (lead time plus cover) to get a raw quantity.
  5. Subtract any stock you already hold or have on order, if any.
  6. Round the result up to the nearest case pack or supplier minimum.
  7. Set a date 3 to 4 weeks after launch to review actual sales and recalculate the next order.

Worked example

Say you plan to launch a new water bottle and estimate 20 units a week based on a similar bottle you already sell. Your supplier's lead time is 3 weeks and you want 5 weeks of cover after it arrives, so that is 8 total weeks of demand: 20 x 8 = 160 units. You have none on hand and none on order, so the raw quantity is 160. The supplier sells in case packs of 24, so you round up to 168 units (7 cases) for your first order.

How SteadyShelf helps

SteadyShelf forecasts from a 28-day sales window, so it has nothing to work with for a brand new SKU and cannot generate a first-order quantity for you. Do this first order manually using a demand guess and the case pack math above, then once you have 3 to 4 weeks of real sales SteadyShelf can start forecasting it and suggesting reorder quantities automatically.

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

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

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FAQ

Should I just order the supplier's minimum quantity for a first order?

Only if the minimum roughly matches your demand estimate. If the minimum is far higher than what you expect to sell in a reasonable period, you are tying up cash and risking markdowns later. It is fine to accept a minimum that gives you a bit more cover than planned, but push back or find another supplier if the minimum would leave you with many months of stock for a new, unproven item.

What if I have no comparable product to base a demand guess on?

Use the smallest order you can reasonably place, respecting the supplier's minimum, and treat the launch as a test. Keep the first order deliberately light, watch sales for 2 to 3 weeks, then place a second order based on actual numbers rather than trying to guess accurately from nothing.

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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