Want the answer without the arithmetic? Try our free reorder point calculator, which shows every step.
The reorder point formula
Reorder point = (average daily sales × lead time in days) + safety stock
Average daily sales is how many units you sell per day over a recent stretch, leaving out any days you were out of stock. Count those as zero and a stockout makes demand look lower than it was. Lead time is the number of days from placing the order to having stock you can sell. Safety stock is the extra you hold for the days sales run faster than average or the supplier runs late.
A worked example
Say you sell an average of 5 units a day, your supplier takes 14 days to deliver, and you hold 13 units of safety stock.
5 units a day × 14 days = 70 units sold while you wait. 70 + 13 safety stock = 83.
Your reorder point is 83. When stock on hand plus anything already on order drops to 83, place the order.
How to calculate safety stock
Safety stock = Z × daily sales variability × √lead time
Z comes from your service level: how often you want to avoid running out while waiting on an order. At 95%, Z is about 1.65. Daily sales variability is the standard deviation of your daily sales. In the example, sales swing by about 2 units a day, so safety stock is 1.65 × 2 × √14, which is about 12.3. Round up to 13.
A higher service level means fewer stockouts but more cash sitting on shelves. 95% is a sensible place to start, and it's Posto's default.
How much to order once you hit it
The reorder point tells you when to order. To decide how much, cover the lead time plus the days of stock you want after the delivery lands, then subtract what you already have.
Order quantity = daily sales × (lead time + days of cover) + safety stock − on hand − on order
With 30 days of cover and 80 units on hand: 5 × (14 + 30) + 13 = 233, and 233 − 80 = 153 units. If your supplier sells in cases of 12, round up to 156.
When to order for Black Friday 2026
Black Friday is November 27, 2026. Work backwards from the day you want stock on the shelf, not from the sale itself. If you want it in two weeks early, by November 13:
- 14-day lead time: order by October 30
- 28-day lead time: order by October 16
- 45-day lead time: the order-by date was September 29
A recent daily average will understate holiday demand. For the weeks around the peak, raise the daily sales figure rather than using the same number all year. The Black Friday inventory checklist walks through the rest.
Mistakes that throw the number off
- Counting stockout days as zero-sales days, which shrinks the next order right when you need more.
- Forgetting stock that's already on order, and ordering twice.
- Using the lead time a supplier quotes when deliveries usually run later.
- Using one flat average straight through a seasonal peak.
- Ignoring minimums and case packs, so the order you send isn't the order you planned.
Or let Posto do the math for every product
Posto runs this calculation for each product in your Shopify store and keeps it current. It leaves stockout days out of demand, plans for Black Friday and the holiday peak, rounds to each supplier's minimums and case packs, and shows its working on every number. Then it turns the result into a purchase order you can email to your supplier. See exactly how Posto calculates.