Inventory how-to

How to manage inventory for a store with two warehouses

Split your stock planning by location, forecast demand at the total store level, then allocate that demand across warehouses using each location's share of past sales.

Short answer: Split your stock planning by location, forecast demand at the total store level, then allocate that demand across warehouses using each location's share of past sales. Set reorder points and safety stock separately for each warehouse, since lead times or local demand can differ.

Work out each warehouse's share of sales

Pull your sales history and tag each order by the warehouse that fulfilled it, or by the region it shipped to if that maps cleanly to a warehouse. Calculate what percentage of total unit sales each location handles, per SKU if you can, or at least per product category. This percentage is your allocation key.

Forecast at the total level, split after

Build your sales forecast using combined demand across both warehouses. This gives you a more stable number than forecasting each location separately, especially for slower-moving SKUs where a single warehouse might not have enough history. Once you have the total daily sales rate, multiply by each warehouse's allocation share to get a location-level daily rate.

Set separate reorder points and safety stock

Each warehouse likely has its own supplier lead times, or at least its own transit time from the supplier. Calculate reorder point separately for each location: reorder point = daily sales at that location x (lead time + safety days). Keep safety stock a bit higher at whichever warehouse has less reliable replenishment or handles rush orders.

Decide on transfers vs separate purchase orders

If one warehouse runs low and the other has excess, moving stock between them is usually cheaper than placing a new purchase order, especially for bulky or slow-moving items. Set a rule of thumb, for example only transfer if the gap is more than two weeks of cover and the item is not perishable. For everything else, just reorder locally from the supplier.

Step by step

  1. List every SKU with its sales split by warehouse for the last 3 to 6 months
  2. Calculate each warehouse's percentage share of total units sold per SKU or category
  3. Forecast total demand per SKU across both locations combined
  4. Apply each warehouse's share to get a location-specific daily sales rate
  5. Set lead time and safety days per warehouse based on its actual supplier or transfer time
  6. Calculate reorder point and order quantity separately for each location
  7. Review monthly whether the allocation split still matches actual sales, and adjust

Worked example

Say a store sells 40 units a day of a candle across both warehouses combined, with Warehouse A handling 70 percent of orders and Warehouse B 30 percent. That gives Warehouse A a daily rate of 28 units and Warehouse B a daily rate of 12 units. Warehouse A's supplier has a 10-day lead time plus 3 safety days, so its reorder point is 28 x 13 = 364 units. Warehouse B's supplier takes 14 days plus 3 safety days, so its reorder point is 12 x 17 = 204 units. Each warehouse reorders independently once it hits its own number.

How SteadyShelf helps

SteadyShelf forecasts and reorders at the store level, not per location, so it will not split demand or set separate reorder points for each warehouse. If you run two warehouses, use SteadyShelf for your total demand forecast and overall supplier ordering, then do the warehouse-level split and any transfers manually using the percentages above.

$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

Can I just treat each warehouse as a completely separate store for forecasting?

You can, but it usually makes forecasts worse for slower-moving SKUs, because each warehouse has less sales history to work with on its own. Forecasting total demand first and then splitting it by each warehouse's historical share generally gives more stable numbers.

How often should I recheck the allocation split between warehouses?

Check it monthly, or sooner if you know something changed, like a marketing push targeted at one region or a new shipping zone going live. If the split drifts by more than a few points from what you are using, update your location-level daily sales rates.

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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