Your Reorder Point Playbook: Safety Stock, Lead Times, and “Oops” Buffers That Work

Build Reorder Points That Don’t Panic When Life Happens

If inventory planning were a movie, “lead time” would be the character who shows up late, blames traffic, and somehow still expects you to be happy they arrived at all.

Reorder points aren’t about being perfect. They’re about being consistently prepared for supplier delays, promo spikes, seasonality, and the occasional “wait… why did sales triple yesterday?” surprise.

And the stakes are not small. Inventory distortion (out-of-stocks + overstocks) costs the global retail industry around $1.7T+ annually, a massive worldwide cost driver tracked by IHL Group.

Let’s fix your reorder points so they hold up in real life.

Put reorder points on autopilot in RestockPro

What a Reorder Point Actually Does (and Why It’s Not Just “When I Feel Nervous”)

A reorder point (ROP) is the inventory level where you trigger replenishment so you don’t stock out before your next shipment is sellable.

Key phrase: sellable.

For Amazon FBA sellers, “lead time” isn’t just manufacturing + transit. It can include:

• Production time (supplier)
• Freight time (ocean/air/ground)
• Port delays / customs
• Prep (labeling, bundling, carton rules)
• Appointment scheduling (if applicable)
• FBA receiving + check-in (aka “the mysterious time vortex”)

Your reorder point needs to cover all of that, plus a buffer for chaos.

The Simple Reorder Point Formula You Can Use Today

Here’s the no-drama version:

Reorder Point (Basic)

ROP = (Average Daily Units Sold × Lead Time in Days) + Safety Stock

That’s it. That’s the engine.

Now let’s make it roadworthy.

Step 1: Calculate Your Average Daily Demand (Without Lying to Yourself)

Use a time range that reflects “normal” demand.

Good defaults:

• 30 days for stable SKUs
• 60–90 days for seasonal or volatile SKUs
• Exclude weird one-offs (a lightning deal day can skew your average like crazy)

Average Daily Demand (ADD) = Total units sold in period ÷ Number of days

Tip: If you run frequent promos, calculate two averages:

• Base demand (non-promo days)
• Promo demand (promo days)
  Then you can plan reorder points with a promo “mode,” instead of pretending promos don’t exist until they do.

Step 2: Define Your Real Lead Time (Not the One Your Supplier Puts in Emails)

If your supplier says “20 days,” and your last three POs took 28, 35, and 41 days to become sellable… your lead time is not 20 days.

Practical approach:

• Track the last 3–6 replenishments
• Use:
  • Average lead time for your baseline
  • Max (or 90th percentile) lead time for buffers

If you don’t have history yet, start with conservative assumptions and tighten over time.

Step 3: Add Safety Stock (This Is Your “Oops Buffer”)

Safety stock is inventory you keep because reality has a personality.

You have a few options here, depending on how fancy you want to get.

Option A: Simple “Worst-Case” Safety Stock (Easy + Effective)

This one is perfect if you want something you can implement today in a spreadsheet:

Safety Stock = (Max Daily Demand × Max Lead Time) − (Avg Daily Demand × Avg Lead Time)

It protects you from:

• demand spikes
• lead time delays
• and that classic combo move: both at once

Option B: Service-Level Safety Stock (More Precise)

If you know your variability, you can tie safety stock to a target in-stock rate (service level):

Safety Stock = Z × σ(during lead time)

Where:

• Z = service factor (higher Z = fewer stockouts, more inventory held)
• σ(during lead time) = demand variability while you’re waiting for inventory

If that sounds like a math textbook wearing a suit, don’t stress… Option A gets you 80% of the benefit with 20% of the effort.

A Quick Example (So This Isn’t Just Inventory Poetry)

Let’s say:

• Avg daily sales: 12 units/day
• Avg lead time: 35 days
• Max daily sales (recent spikes): 20 units/day
• Max lead time (recent delays): 50 days

Step 1: Base demand during lead time

12 × 35 = 420 units

Step 2: Safety stock (simple worst-case method)

(20 × 50) − (12 × 35)
1000 − 420 = 580 units

Step 3: Reorder point

ROP = 420 + 580 = 1,000 units

So you reorder when available inventory hits 1,000 units.

Is that conservative? Yes.

Is “going out of stock” expensive? Also yes. (Often way more expensive than holding some extra inventory.)

How to Handle Seasonality, Promo Spikes, and “Surprise” Demand

Seasonality

If Q4 is your Super Bowl, don’t use a quiet summer average to set a Q4 reorder point.

Practical play:

• Build reorder points that adjust by month/season
• Or use separate demand averages for “in-season” vs “off-season”

Promotions

Promos should flip you into a different planning mode:

• Use promo demand average
• Increase safety stock temporarily
• Reorder earlier (because velocity eats inventory fast)

New SKUs (No history)

Start with:

• conservative lead time
• modest safety stock
• aggressive monitoring (Then refine after 2–3 restocks)

The Most Common Reorder Point Mistakes (a.k.a. How Stockouts Happen Quietly)

1) Using supplier lead time instead of actual lead time

If your reorder point doesn’t include receiving/check-in time, it’s basically optimistic fiction.

2) Ignoring variability

Average demand is not a promise. It’s a midpoint.

3) Forgetting inbound inventory exists… until it doesn’t

You need a clean view of:

• on-hand
• inbound
• reserved
• stranded (if applicable)
• and what’s actually sellable

4) Reorder points that never change

If your SKU’s demand shifts, your reorder point should too. Otherwise you’re driving while only looking in the rearview mirror.

A Simple Monthly Reorder Point Routine (15–30 Minutes Per SKU Set)

1. Pull last 30–90 days sales
2. Update avg daily demand (base + promo if needed)
3. Update lead time (avg + max/90th percentile)
4. Recalculate safety stock
5. Confirm your reorder point
6. Sanity-check upcoming promos/seasonality
7. Place POs based on what your reorder point tells you… not your stress levels

Bring It Home: Reorder Points Should Feel Boring (In a Good Way)

When reorder points are dialed in, inventory stops being a daily adrenaline sport.

You’re not guessing.

You’re not panic-ordering.

You’re not watching your Buy Box and ad performance get weird because you’re about to stock out.

You’re running a system.

Put reorder points on autopilot in RestockPro

FAQ: Amazon FBA Reorder Point Questions Sellers Ask (a Lot)