Low stock and reorder point: when to order and how much
Stop running out and stop overbuying: find the reorder point from daily sales and supplier time, add safety stock, decide how much to order and spot dead stock.
In this article
Every shop makes two costly mistakes with stock. The first is running out of what sells — the customer walks out and may not come back. The second is buying too much of what doesn’t — money sits on the shelf for months. A simple bit of arithmetic, done once per item, fixes both.
The two numbers you need
- Average daily sales. Take the quantity sold in the last 30 days and divide by 30. If 360 packets sold last month, that is 12 a day.
- Lead time. The number of days from placing an order to having the goods on your shelf — not the day the supplier says, but what really happens. If you order on Monday and the goods are on the shelf on Thursday, the lead time is 3 days.
The reorder point
Reorder point = daily sales × lead time + safety stock
The first part covers what you will sell while you wait for the delivery. The safety stock covers surprises: a slow delivery or a busy week.
Example: a biscuit packet sells 12 a day and the supplier takes 3 days. You keep 2 days of safety stock (24 packets). Reorder point = 12 × 3 + 24 = 60 packets. When the shelf falls to 60, you order.
How much to order
Decide how many days of sales one order should cover — say 15 days. Then:
Order quantity = daily sales × days to cover
12 × 15 = 180 packets. At a purchase price of ₹8 a packet that is ₹1,440 — money that comes back within two weeks. Ordering for 90 days instead would lock up ₹8,640 in a single item.
Cover fewer days for costly or perishable items and more for cheap, steady ones, or when the supplier only delivers once a month.
A worked example for four items
| Item | Sells per day | Supplier takes | Safety stock | Reorder at |
|---|---|---|---|---|
| Biscuit packet | 12 | 3 days | 24 | 60 |
| Toothpaste 100 g | 4 | 5 days | 8 | 28 |
| A4 register | 3 | 7 days | 6 | 27 |
| Phone charger | 1 | 10 days | 3 | 13 |
Write the reorder point on the shelf tag or save it with the item, so whoever is at the counter knows when to tell you.
How much safety stock?
- Steady items from a reliable supplier: one to two days of sales.
- Items whose sales jump (festivals, school opening, weddings) or a supplier who is often late: more — three to five days, or more just before the season.
- Slow or costly items: keep it small; a stock-out of a rarely sold item costs less than money stuck for months.
Plan for the season
Daily sales from last month mislead you before a festival or the school season. Look at the same weeks last year and order earlier: if registers sold 3 a day normally but 15 a day in the first two weeks of June last year, your reorder point for late May should use the June number.
Focus on what matters most
A small number of items bring most of your sales. Check those every day; check the rest once a week or once a month. This keeps the job to a few minutes a day.
Find slow and dead stock
The other half of reordering is knowing what not to reorder. Make a list of items with no sales in 30, 60 and 90 days, and the money in each. For dead stock: stop reordering, offer it at a discount, bundle it with a fast seller, or return it to the supplier if they agree. Our guide on how to manage stock in a shop covers the monthly dead stock check.
Common mistakes
- Using last month’s sales during a festival month.
- Forgetting stock lying in the godown or on its way, and ordering again.
- Buying a three-month supply for a small discount — check whether the discount is worth the money locked up.
- Never updating lead time when a supplier becomes slower.
The reorder list in ApnaInventory — “kya mangaayen” — works this out from how fast each item sells: what to buy, how much and from whom, with slow and dead stock listed separately along with the money stuck in them. By default it plans for 30 days of stock and a 7-day delivery time, and you can change both. Counting quickly by scanning barcodes keeps these numbers honest, and QR labels on racks and boxes help you find what you already have.
FAQ
What is a good safety stock?
For most steady items, one to two days of sales. Increase it for items with uneven sales or an unreliable supplier.
How do I find my real lead time?
Note the date you order and the date the goods are on the shelf for your next few orders. Use the usual number, not the best one.
Should I buy extra stock for a supplier discount?
Only if you will sell it soon. Compare the discount with how long the money stays locked up — a 3% discount is not worth six months of stock on the shelf.
What about items that sell only once in a while?
Keep one or two pieces, or order when a customer asks. A reorder point matters most for items that sell every day.
Bills, stock and khata in one app
Make GST or simple bills, keep stock right and know who owes you — on phone, iPad or computer, in English or Hindi.
- Low stock list
- Slow and dead stock, with the money stuck in it
- Purchase orders to suppliers
