Inventory how-to

How to know if you're ordering too little

You are ordering too little if you keep hitting zero stock before the next delivery arrives, or if you repeatedly place rush orders between normal cycles.

Short answer: You are ordering too little if you keep hitting zero stock before the next delivery arrives, or if you repeatedly place rush orders between normal cycles. Track stockout frequency and sell-through right after restock. If a SKU sells out in half the time you planned for, your order quantity or reorder point is too low.

Signs you are under-ordering

You sell out of a SKU before the next shipment lands, and you notice gaps where the product page is live but out of stock. You also find yourself placing emergency or partial orders outside your normal supplier schedule, often paying more for rushed shipping.

Another sign is low days-of-stock right after a delivery. If you receive 100 units and they are gone in a week when you expected three weeks of cover, your order quantity was too small for current demand.

Check your numbers, not your gut

Work out your daily sales rate for the SKU and compare it to what you actually ordered. Order quantity should cover daily sales times lead time plus days of cover, minus what you already have on hand or on order. If your last order was smaller than that formula says, you under-ordered.

Also check if sales have grown since you set the order quantity. A SKU that used to sell 2 units a day but now sells 5 needs a much bigger order, even if nothing else changed.

Separate true demand from bad timing

Before raising order quantities, rule out supplier delays. If a shipment arrived late, that alone can cause a stockout even with a correctly sized order. Fix the lead time assumption first, then look at quantity.

Also check if a stockout was caused by a one-off spike, like a sale or a mention somewhere, rather than ongoing demand. Spikes do not always mean you should raise your standing order size.

Step by step

  1. List every SKU that went out of stock in the last 3 months
  2. For each one, note how many days early it ran out compared to your planned cover
  3. Recalculate daily sales using recent data, not old assumptions
  4. Recalculate order quantity with the formula: daily sales x (lead time + days of cover) minus stock on hand and on order
  5. Compare that to what you actually ordered last time
  6. If the gap is consistent across several cycles, raise the order quantity or safety days permanently
  7. If it was a one-off spike, leave the standing order as is and just place a manual top-up

Worked example

A store sells a candle at 4 units a day. Lead time is 14 days and they want 10 days of cover, so order quantity should be 4 x (14+10) = 96 units minus stock on hand. Last time they ordered only 60 units because that was the case pack size they always used. The candle sold out 9 days before the next shipment arrived, which matches the shortfall of 36 units at 4 units a day. The fix is to order two case packs instead of one, or move to a supplier with a smaller case pack.

How SteadyShelf helps

SteadyShelf calculates daily sales from your 28-day sales window and suggests order quantities using lead time and safety days automatically, so you do not have to redo this math by hand each cycle. It does not tell you why a stockout happened (late supplier vs real demand growth), so you still need to check that yourself before deciding to raise quantities.

$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.

Related guides

All inventory how-to guides ยท Inventory glossary

FAQ

What if my supplier has a minimum order quantity bigger than what I need?

Order the minimum and treat the extra as added safety stock. If the minimum is far above what you sell in a reasonable period, consider ordering less often rather than ordering too much each time.

Should I raise order quantities for every SKU that ever sold out?

No. Only raise it for SKUs with a consistent pattern of early stockouts. A single stockout caused by a late supplier or a short-term spike does not mean your standard order size is wrong.

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.

Get early access