Setting Reorder Points for a Shopify Store Before the Best Sellers Run Out

The pattern is familiar to anyone who runs an online store. Your best-selling product sells out on a Friday, halfway through a promotion you paid to advertise. The supplier needs three weeks. Meanwhile, the back room is full of a colorway that sold well two seasons ago and now moves a few units a month, with cash tied up in every carton.

Both problems come from the same place. Reordering in most small stores depends on somebody noticing that something looks low, usually the owner, usually while doing three other things. The fix is a set of reorder points calculated from your own sales and your suppliers' real lead times, checked every day by something more reliable than memory.

This article covers how to calculate reorder points that hold up, what to clean up in your product and supplier data first, and what an automated reordering setup does around Shopify and the tools a small store already uses.

How reordering usually works, and why it breaks

In a typical small store, the owner checks inventory in the Shopify admin once or twice a week, or keeps a spreadsheet that someone updates on Mondays. Products get reordered when they look low, in quantities that feel about right. The person who knows that one supplier takes five weeks in the run-up to the holidays is the owner, and that knowledge lives nowhere else.

This works while the catalog is small and the owner has time. It breaks when the store grows past a few dozen active products, when the owner takes a week off, or when demand moves faster than the weekly check. Stockouts on best sellers cost sales you already paid to attract, and overstock on slow lines quietly drains the cash you'd use to reorder the products that are selling.

The reorder point, in plain terms

A reorder point is the stock level at which you place a new order so it arrives before you run out. The standard calculation has two parts:

• Demand during the lead time. Average daily sales multiplied by the supplier's lead time in days.
• Safety stock. An extra buffer to cover the days when sales run higher than average or the delivery runs late.

As an illustration, say a product sells an average of 12 units a day and the supplier reliably delivers in 21 days. Demand during the lead time is 252 units. If you decide to hold roughly a week of extra sales as safety stock, that's another 84 units, so you'd reorder when stock on hand plus anything already on order drops to around 336.

The order quantity is a separate decision. It depends on how many weeks of cover you want to hold, the supplier's minimum order and case pack sizes, storage space, and how much cash you're willing to tie up. Many small stores settle on a target such as six or eight weeks of cover for steady sellers and less for anything seasonal or trend-driven.

More sophisticated methods calculate safety stock from the variability of your sales and lead times, and they're worth using once you have clean data. The simple version above already beats ordering by feel, and it gives you something concrete to automate.

Fix the data before you automate

Reorder points are only as good as the numbers behind them. Four things usually need attention first.

Clean up products and variants

Every size and color that you stock separately needs its own reorder point. Bundles and kits need special care, because selling a gift set draws down the stock of each component. If your bundles are set up as separate products with their own inventory counts, the component stock will be wrong and any automation built on it will be wrong too.

Record real lead times

Use the time from placing the purchase order to receiving the goods, measured from your last few orders, instead of the supplier's quoted lead time. Note where it varies by season. A supplier that quotes two weeks and delivers in four will cause stockouts no matter how clever the rest of the system is.

Decide which products matter most

Rank your products by revenue or margin. The top group, often a small share of the catalog, deserves tighter safety stock and closer attention. The long tail can run on simpler rules or be reordered only on demand. This is also a good moment to identify products you'd be happy to let sell through and discontinue.

Account for stockouts in your history

If a product was out of stock for two weeks last quarter, its sales history shows two weeks of zero demand that wasn't real. Averages calculated over that period will understate demand and set the reorder point too low, which causes the next stockout. Exclude out-of-stock days from the average, or at least flag them.

What the automated version does

Once the data is in order, a reordering system for a Shopify store typically does the following every day:

1. Pulls sales and stock. It reads daily sales by variant from Shopify, plus any other channels you sell through such as a marketplace or wholesale orders, and current stock by location.
2. Updates demand. It recalculates average daily sales over a rolling window, excluding stockout days, and adjusts for known events such as a planned promotion or a seasonal peak you've marked on the calendar.
3. Checks each product. It compares stock on hand plus open purchase orders against each product's reorder point.
4. Drafts purchase orders. For anything at or below its reorder point, it calculates an order quantity based on your target cover, rounds to case packs and minimum order quantities, and groups lines by supplier into draft purchase orders.
5. Asks for approval. The owner or buyer gets a short summary by email or chat: which suppliers, what's being ordered, why, and the total value. Approving sends the order to the supplier in the format they accept and records it in your inventory or accounting system.
6. Tracks arrivals. It records expected delivery dates, flags orders that are running late, and updates lead time history when goods arrive so the next reorder point is more accurate.
7. Flags slow movers. Each week it lists products holding more than a set number of weeks of cover, so you can decide on markdowns, bundles or stopping reorders.

The AI part sits mainly in the demand estimate and the exceptions. A model can spot that a product's sales have stepped up for reasons that look lasting, pick up seasonal patterns from past years, and write the summary in plain language so a busy owner can approve orders in a couple of minutes. The core arithmetic stays simple and visible, which matters when you're trusting it with your cash.

This is what our inventory and auto-reordering system does, connected to your store and suppliers. The ecommerce and retail page shows how it sits alongside listings, ordering and repeat customer systems.

Tools you probably already have

Shopify's admin and reports give you sales by product and variant, and Shopify Flow can trigger simple actions such as an alert when inventory drops below a threshold. There are also inventory planning apps in the Shopify App Store that handle reorder points and purchase orders for stores that want an off-the-shelf option. For smaller catalogs, a well-built spreadsheet fed by a daily export can carry you a long way.

Whichever route you take, decide where purchase orders live. If they're in QuickBooks or Xero, the reordering system should create them there so your bills and stock records line up. If they're in an inventory app, the accounting side should pick them up from there. Two places that both hold purchase orders will drift apart within a month.

A worked example

Say a store sells around 120 products, and its top 25 account for most of its revenue. The owner currently reorders on Mondays after scrolling through the inventory screen. In the new setup, those 25 products get reorder points calculated from twelve months of sales, with stockout weeks excluded, and lead times taken from the last few purchase orders. One best seller turns out to have a real lead time of five weeks against a quoted three, which explains why it kept running out, and its reorder point moves up accordingly. The rest of the catalog gets a simpler rule: reorder a fixed quantity when stock drops below four weeks of average sales. Each morning, the system checks every product and, when anything crosses its point, drafts a purchase order for that supplier, rounded to case packs. The owner approves two or three orders a week from her phone, and the Monday scroll goes away. When a promotion is planned, she marks the dates, and the affected products get a temporary uplift in their reorder points a few weeks ahead.

What to watch out for

• Promotions and seasonality. A rolling average lags behind sudden changes. Mark planned promotions and known peaks in advance so the system can raise reorder points ahead of time.
• New products. Products with little history need manual reorder points based on comparable items until they've built up a few months of sales.
• Multiple locations. If you hold stock in more than one place, decide whether you reorder per location or centrally and transfer. Mixing the two creates phantom shortages.
• Cash. The reorder logic doesn't know your bank balance unless you tell it. A monthly purchasing budget, with orders over a limit needing explicit approval, keeps automated reordering from becoming automated overspending.
• Auto-sending too early. Keep orders on approve-before-send until you've watched the system make a few months of sensible decisions. Then consider letting routine, low-value reorders go automatically.
• Supplier changes. When a supplier changes pack sizes, prices or lead times, the system needs updating. Assign someone to own supplier data.

How to tell whether it's working

Watch three things. First, stockouts on your top products: how many days each was unavailable last quarter compared with this one. Second, weeks of cover across the catalog, which should fall for slow movers as reorders become more deliberate and hold steady for best sellers. Third, how often the owner or buyer changes the drafted purchase orders, and why. Frequent changes to quantities usually mean a lead time, pack size or demand assumption is wrong, and each correction makes the next draft better. Cash tied up in inventory is the number to watch over a longer period, since it reflects whether reordering is matching stock to demand.

Where to start this week

Export the last twelve months of sales by variant from Shopify and pick your top twenty products by revenue. For each, look up the actual lead time from your last few purchase orders, calculate average daily sales excluding any stockout periods, and work out a reorder point using the method above. Put those numbers next to current stock and on-order quantities in a spreadsheet, and check it every morning for two weeks.

You'll quickly see which products were closer to running out than you realized, and you'll have the data an automated system needs. At that point the spreadsheet starts to feel like a job that should be running on its own, which is exactly what the automated version does.

If you want a quick read on where reordering sits among the other jobs worth automating in your store, run the free PATH report on your website. To talk through your own setup, book a call.