Inventory how-to

How to know if you're ordering too much

You are ordering too much if your days of stock keeps climbing while sell-through stays flat, or if you are still reordering a SKU before the last batch is half sold.

Short answer: You are ordering too much if your days of stock keeps climbing while sell-through stays flat, or if you are still reordering a SKU before the last batch is half sold. The fix is to compare what you hold against what you actually sell per day, not against gut feeling.

Check days of stock per SKU

Divide units on hand by average daily sales for each variant. If that number is much bigger than your supplier's lead time plus your safety days, you are carrying more than you need. A SKU with 300 days of stock and a 20-day lead time is a clear sign of overordering, not a safety cushion.

Watch for rounding creep

Case packs and supplier minimums push order quantities up. If every order gets rounded up by a large margin, over many cycles that extra sits as dead stock. Track how often your rounded quantity is far above your calculated need, not just once but across repeat orders.

Compare order quantity to actual sales since last order

Before placing a new order, look at how many units sold since the last one arrived. If you sold 40 units but are about to order 200, ask why. Slow sellers often keep getting the same order size out of habit rather than current demand.

Separate seasonal bumps from real baseline

A spike from a promotion or a seasonal month can inflate your daily sales average if you are not careful. If you order based on a short recent window that included a spike, you can overbuy for the months after it. Check whether the demand that justified the order is still happening.

Step by step

  1. Pull days of stock for each SKU: units on hand divided by average daily sales.
  2. Compare that number to lead time plus safety days for that supplier.
  3. List SKUs where days of stock is more than double lead time plus safety days.
  4. For each flagged SKU, check units sold since the last order arrived versus units just ordered.
  5. Check if a recent sales spike or promotion is skewing the daily sales average used for ordering.
  6. Reduce the next order's days of cover for slow movers instead of repeating the same quantity.
  7. Recheck in a month to see if days of stock is trending down.

Worked example

A store sells a candle at 2 units a day on average, lead time is 14 days, safety days 7. Reorder point should be 2 x (14+7) = 42 units. But the store has 260 units on hand, which is 130 days of stock against a 21-day need. That gap of over 100 days of excess stock is a sign of overordering, likely from rounding up to a supplier's 250-unit minimum without adjusting order frequency.

How SteadyShelf helps

SteadyShelf calculates days of stock and order-by dates per SKU automatically, using your sales window and each supplier's lead time and safety days, so you can see overordering before you place the next PO. It does not flag seasonal promotions for you or do per-location analysis, so you still need to judge whether a recent sales spike should count in your baseline.

$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

What counts as "too much" days of stock?

There is no fixed number that applies to every store. A reasonable check is comparing days of stock to lead time plus safety days: if it is more than double or triple that combined figure with no seasonal reason, it is worth reviewing.

Should I stop using supplier minimums if they cause overordering?

Not necessarily. Instead, order less often but still at the minimum, so the extra units get consumed before you reorder again. The problem is usually order frequency, not the minimum itself.

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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