Inventory how-to

What to do when sales suddenly drop

Check why the drop happened, then let your reorder numbers catch up to the new reality instead of ignoring it.

Short answer: Check why the drop happened, then let your reorder numbers catch up to the new reality instead of ignoring it. A sales drop should lower your forecasted daily sales, which lowers reorder points and order quantities, so you avoid buying into dead stock.

Find the cause first

A drop can mean fewer customers, or it can mean you are out of stock and do not realize it. Check if the product went out of stock, if a price or listing changed, if a season ended, or if a competitor undercut you. The fix is different depending on the cause.

Let your forecast catch up

Most forecasts use a recent sales window, often around 28 days. If sales genuinely dropped, that window will pull your daily sales average down within a few weeks, which lowers the reorder point and suggested order quantities automatically. If you need to react faster, manually lower the daily sales number you use for that SKU until you have more data.

Do not keep ordering on old numbers

The biggest risk after a sales drop is that a purchase order already in motion, or a standing reorder rule, keeps assuming the old daily sales rate. That turns a sales problem into a cash and storage problem. Pause or shrink open orders for the affected SKUs until the new sales rate is clear.

Separate real drops from noise

A few slow days is not a trend. Look at the drop against your normal week-to-week swings before you change supplier orders. If the SKU is seasonal, a drop at the end of a season is expected and should not trigger a panic reorder change.

Step by step

  1. Pull up sales for the SKU over the last 28 to 60 days and compare to the prior period
  2. Check stock levels for the same period to rule out a stockout causing the drop
  3. Check if price, listing, or season changed around the time sales dropped
  4. If the drop looks real, lower the daily sales figure used for reorder calculations
  5. Cancel or reduce quantities on any open purchase orders for that SKU
  6. Recalculate the reorder point and order quantity using the new daily sales rate
  7. Recheck in two to three weeks once you have fresh sales data

Worked example

Say a SKU was selling 10 units a day, with a 14-day lead time and 5 days safety stock, giving a reorder point of 10 x (14+5) = 190 units. Sales drop to 3 units a day for two weeks straight with no stockout and no price change. Using the new rate, the reorder point becomes 3 x (14+5) = 57 units. If you had 150 units on hand, the old numbers said reorder now, but the new numbers say you have 50 days of stock left and no order is needed yet.

How SteadyShelf helps

SteadyShelf's forecast is based on a rolling 28-day sales window by default, so it will naturally pull reorder points down after a sustained drop without you doing anything. It does not diagnose why sales dropped or flag stockouts as the cause, so you still need to check stock history and listing changes yourself before trusting the new numbers.

$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 I cancel a purchase order that was placed before sales dropped?

If the order has not shipped, ask the supplier to reduce or delay it. If it has shipped, let it arrive and hold off on the next order until your stock works back down to a normal level based on the new sales rate.

How long should I wait before treating a sales drop as permanent?

There is no fixed rule, but two to four weeks of consistently lower sales, with no stockout or outside cause, is usually enough to treat the new rate as the current normal and reorder accordingly.

Let SteadyShelf do this math for every SKU

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