How to Set Reorder Points That Actually Work for Shopify Stores

A reorder point is the inventory level at which you should place a new order with your supplier. Get it right and stock arrives just before you run out. Get it wrong and you either stock out (ordered too late) or carry excess inventory for weeks (ordered too early).

Shopify lets you set low-stock alerts, but those are just notifications. They do not tell you what the threshold should be, how to calculate it, or whether the number makes sense for each product. Setting a reorder point requires combining your sales velocity, lead time, and safety stock into a single number.

Here is how to do it.

The reorder point formula

The formula is straightforward:

Reorder Point = (Average Daily Sales x Lead Time in Days) + Safety Stock

The first part (average daily sales x lead time) tells you how much stock you will sell while waiting for your next order to arrive. The safety stock buffer protects against demand spikes and delivery delays.

Worked example: you sell an average of 15 units per day. Your supplier takes 12 days to deliver. You carry 50 units of safety stock.

Reorder Point = (15 x 12) + 50 = 180 + 50 = 230 units

When your stock level for that product drops to 230 units, it is time to place an order. If everything goes to plan, your new shipment arrives right as you are dipping into your safety stock buffer. If demand spikes or the supplier is late, your safety stock covers the gap.

Getting the inputs right

The formula is simple. Getting accurate inputs is the hard part.

Average daily sales. Pull sales data for each product over the last 60-90 days. Divide total units sold by the number of days. Watch out for stockout periods: if a product was unavailable for 10 of those 90 days, divide by 80 instead of 90 to avoid underestimating demand.

Lead time. This is not just your supplier's stated delivery time. It includes the time from when you decide to order to when stock is available to sell: order processing time + manufacturing time (if applicable) + shipping time + receiving and shelving time. Track actuals, not promises. If your supplier says 10 days but it is consistently 14, use 14.

Safety stock. See our separate guide on calculating safety stock. For a quick estimate: use 20-30% of your lead time demand as a starting buffer. So if your lead time demand is 180 units, safety stock of 36-54 units is a reasonable starting point.

Why Shopify's low-stock alerts fall short

Shopify lets you create a Shopify Flow automation that triggers when inventory drops below a threshold. This is useful, but it has limitations:

The threshold is a single static number. It does not adapt to changes in your sales velocity or lead time. A reorder point of 100 units might have been right six months ago, but if your sales have doubled, you are now stocking out before your alert even fires.

Alerts are binary: above or below. There is no intelligence behind them. They do not tell you how much to order, when the order should arrive, or whether the current level is concerning or just normal fluctuation.

There is no per-location logic. If you have multiple locations, your reorder point should be different at each one based on local demand. A global threshold does not account for this.

Setting reorder points at scale

For stores with a handful of products, you can calculate reorder points in a spreadsheet and manually set Shopify Flow alerts. For larger catalogues, this does not scale.

Here is a practical approach for stores with 50+ SKUs:

Tier your products. Use ABC analysis to identify your A items (top revenue drivers). Calculate precise reorder points for these first. They deserve the most attention because a stockout on an A item costs the most.

Use reasonable defaults for the rest. For B and C items, use a simplified calculation: average daily sales x lead time x 1.25 (the 1.25 provides a rough 25% safety buffer). This is not perfect but it is dramatically better than guessing.

Review quarterly. Reorder points are not set-and-forget. Sales patterns shift seasonally, suppliers change their lead times, and new products can cannibalise demand from existing ones. Recalculate at least every quarter.

Automate where possible. Inventory tools like Stockful generate reorder recommendations based on your actual sales velocity and stock levels, updated continuously rather than quarterly. This replaces the manual calculation with a live signal that adapts to your business.

Reorder points for multiple locations

If you sell from multiple locations, each location needs its own reorder point for each product. A warehouse that ships nationally will have different demand patterns than a retail store that serves local customers.

Calculate reorder points per location using location-specific sales data. If Location A sells 20 units per day and Location B sells 5, their reorder points should reflect that. A single store-wide reorder point will either over-stock one location or under-stock the other.

Also consider whether you replenish locations from a central warehouse or order directly from suppliers for each. The lead time for a warehouse-to-store transfer is usually shorter than supplier-to-store, which means the reorder point at the store level can be lower.

When to adjust reorder points

Beyond quarterly reviews, there are specific triggers that should prompt an immediate recalculation:

A product's sales rate changes significantly (up or down). Your supplier changes their lead time or shipping method. You add or remove a fulfilment location. You are heading into a known demand period (holiday season, a major sale). You receive customer feedback suggesting demand is shifting.

Stop guessing, start calculating

The reorder point formula takes five minutes to apply to a single product. The payoff is eliminating the guesswork that leads to stockouts and overstock. Start with your top 10 products, set proper reorder points, and compare the results to your current ad hoc approach. The difference is usually immediate and measurable.

Stockful's reorder report shows you exactly which products need to be reordered and when, based on your real sales velocity and stock levels. Get started free at [stockful.app](https://stockful.app).