Free Tool
Free Reorder Point Calculator
Calculate the exact stock level at which you should place your next order. Accounts for lead time, safety stock and demand variability. No signup required.
What is a reorder point?
A reorder point (ROP) is the stock level that triggers a new purchase order — calculated so that stock arrives before you run out. It combines your lead time demand with a safety buffer for uncertainty. For Shopify brands sourcing from China with 70+ day lead times, getting this right is the difference between seamless replenishment and a 100-day stockout.
Enter your details
Your average units sold per day. Divide your weekly sales by 7.
Total days from placing an order to stock arriving in your warehouse. Default 70 = China production.
Extra days of cover to hold as a buffer. Used alongside the statistical safety stock below.
How much your daily sales fluctuate. 20% is typical for most products; seasonal items may be 30–50%.
The probability of never running out. 95% is the standard for most ecommerce brands. Use 98–99% for hero SKUs.
Enter your landed cost per unit to see the cash value of your inventory investment.
Your planned order quantity. Used to calculate maximum stock level and average inventory.
Enter your average daily sales above to calculate your reorder point.
The formulas explained
Reorder point formula
The reorder point is the minimum stock level that covers you through your entire lead time, plus a safety buffer. When stock falls to this number, your order must be placed immediately.
Statistical safety stock formula
Where Z is the z-score for your service level (1.65 for 95%), σ_d is the standard deviation of daily demand (daily demand × variability %), and √LT is the square root of your lead time in days. This formula accounts for statistical uncertainty rather than a simple fixed buffer.
Maximum stock level formula
The maximum stock level defines how much you should ever hold. After receiving an order, your stock should not exceed this level — if it does, your order quantity is too large or your safety stock is set too high.
Canopy calculates reorder points automatically for every SKU
Stop maintaining reorder points in spreadsheets. Canopy connects to Shopify, monitors stock levels daily, and alerts you the moment any SKU hits its reorder point — so you never miss a replenishment window again.
Reorder point — frequently asked questions
A reorder point (ROP) is the stock level at which you place a new purchase order, so that stock arrives before you run out. It accounts for how long your supplier takes to deliver (lead time) and a safety buffer for unexpected demand or delays. The formula is: ROP = (daily demand × lead time in days) + safety stock. Getting this right is critical for brands with long lead times — a missed reorder point can mean 70–100 days waiting for stock while your Shopify store shows out of stock.
Safety stock is calculated using the formula: Z × σ_d × √LT, where Z is a z-score based on your target service level (1.65 for 95%), σ_d is the standard deviation of daily demand (daily demand × demand variability %), and LT is your lead time in days. At a 95% service level with 10 units/day demand, 20% variability and 70-day lead time, safety stock = 1.65 × 2 × √70 = 27.6 units.
Most ecommerce brands use a 95% service level, which means you will have stock available 95% of the time. This corresponds to a z-score of 1.65. High-velocity or hero SKUs may warrant 98–99% (z = 2.05–2.33). Lower-demand or lower-margin SKUs can use 90% (z = 1.28) to reduce tied-up capital. Choosing your service level is a balance between the cost of carrying safety stock and the cost of a stockout.
Demand variability measures how much your daily sales fluctuate around the average. It is expressed as a percentage: if you sell an average of 10 units/day but your daily sales range from 6 to 14, your variability is around 20–30%. To calculate it precisely, divide the standard deviation of your daily sales by the average daily sales and multiply by 100. Seasonally-driven products typically have higher variability (30–50%); staple products with steady demand are lower (10–15%).
The reorder point is the trigger — when stock falls to this level, you place an order. The maximum stock level is the ceiling — the most you should hold at any time. Maximum stock = safety stock + (order quantity). Holding more than your maximum stock ties up unnecessary cash and warehouse space. Together, these two numbers define your operating inventory band: order at the ROP, receive stock up to the maximum.
Related tools and guides
Never miss a reorder point again
Canopy monitors every SKU's stock level against its reorder point — and alerts you before it's too late.