Knowing when you run out, before you run out
Every business already owns the data that says when it will run out. Almost none of them look at it, which is why stock-outs feel like bad luck rather than arithmetic somebody did not do.
The reorder point is one line of arithmetic
Average daily demand multiplied by lead time in days, plus a safety buffer. If you sell six a day and your supplier takes fourteen days, you need eighty-four units on the shelf at the moment you place the order — before any buffer at all. Most businesses discover this by running out.
Lead time is the whole supplier relationship, not the shipping time
It runs from the moment you decide to order to the moment stock is sellable: your own approval, the supplier's despatch, transit, receiving and putaway. Measuring only the transit leg is the most common way a correct-looking reorder point still leaves you short.
The safety buffer is for variance, not for comfort
Demand varies and so does lead time. The buffer covers the overlap of a bad week and a late shipment. Setting it by feel produces either stock-outs or a warehouse full of money; setting it from your own observed variability produces a number you can defend.
Seasonality breaks the average
An annual average is wrong in both directions for anything seasonal — too much stock in the trough, too little at the peak, and the peak is exactly when being out costs the most. The weeks that repeat every year are visible in your own history once you have a year of it.
Selling on a marketplace adds a lead time of its own
Stock has to physically reach the marketplace before it can sell, so the shipping window stacks on top of the supplier's. A reorder point that ignores it is right about the warehouse and wrong about the listing.
See it in your own numbers.
Free to start, on Windows, Mac, iPad and Android. No credit card.