What happens if my lead time is inconsistent?

Use your worst realistic lead time (the 90th percentile across the last 12 months), not the average. If your supplier promises 30 days but has delivered in 45 twice in the last year, your planning lead time should be 45. Average lead time gets you stocked out roughly half the time.

How do I forecast daily sales for a new product?

For new SKUs, start with 30 days of data before trusting a daily rate. For the first order, use category benchmarks or a conservative estimate, and plan for 60 to 90 days of cover rather than tight reorder math. Once you have 30 to 60 days of history, switch to a data-driven reorder point.

Should I buy in larger batches to lower per-unit cost?

Bulk buying reduces COGS but increases inventory holding cost. The right math is the economic order quantity (EOQ), which balances the two. Most DTC brands land at 60 to 120 days of cover per order. Less than 60 means you reorder too often (freight overhead). More than 120 means cash is frozen.

How does reorder point differ for Amazon FBA?

FBA adds warehouse receiving time (usually 3 to 14 days) on top of production and shipping lead time. Add the FBA inbound window to your lead time calculation. If production plus freight is 30 days and FBA receiving is 7, your true lead time is 37. Miss this and your FBA inventory hits zero while pallets sit at Amazon's door.

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Reorder Point Calculator

Reorder point is the single number that prevents stockouts without tying up cash. Calculate it right and inventory arrives the week before you run out.

Reorder Point = (Daily Sales × Lead Time) + Safety Stock

Average daily sales (units)

Lead time (days)

Safety stock (units)

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How to use this Reorder Point Calculator

Reorder point is a simple formula with expensive consequences. Daily sales times lead time equals the inventory you burn while waiting for new stock to arrive. Add safety stock (your buffer for demand spikes, supplier delays, and freight surprises) and you get the level at which you must trigger a reorder. Fall below it and you will stock out before replenishment lands.

The cost of getting this wrong shows up in two forms. Stockout is obvious: lost sales, canceled ads, ranking damage on Amazon. Overstock is less visible but just as painful: cash frozen on shelves, storage fees, and markdown risk on seasonal items. Reorder point done right keeps you on the edge of both without crossing either line.

Recalculate monthly. Daily sales rate is the only input that moves seasonally, but it moves enough to wreck a set-it-and-forget-it reorder point. If Q4 sales double your daily run rate, your Q4 reorder point should also roughly double. Miss this and you will stock out exactly when demand peaks.

Frequently Asked Questions

Most DTC brands keep 14 to 30 days of safety stock for core SKUs and 7 to 14 days for secondary. The right number depends on lead time volatility and demand volatility. If your supplier occasionally misses by a week, your safety stock should cover that week. If Q4 doubles your daily sales, your safety stock should absorb that spike.

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