Reorder point and safety stock for imported products

The reorder point formula

Your reorder point is the stock level that should trigger a new purchase order. Reach it, and you order now.

The first part covers what you'll sell while the order is on its way. Safety stock is your cushion for when sales run hot or the shipment runs late.

Step 1: Measure your real lead time

For imports, lead time is the whole trip, from the day you place the PO to the day units are ready to sell. Add up each stage:

If you sell through Amazon FBA or a 3PL, add the days it takes them to receive and check in your stock. Use what actually happened on your last few orders, not the supplier's quote.

Step 2: Find your average daily sales

Take units sold over the last 90 days and divide by 90. If you sold 1,080 units, that's 12 a day. Use a longer window, or last year's same months, for seasonal products.

Step 3: Choose your safety stock

Two simple ways to set it:

Days of cover

Decide how many extra days of sales you want on hand. Twenty days at 12 a day is 240 units. This is easy to explain and adjust, and it's a good starting point for most small sellers.

Worst case minus average

Plan for your busiest selling days and your slowest shipment at the same time:

If your best days hit 18 units and your slowest order took 90 days: (18 × 90) − (12 × 75) = 1,620 − 900 = 720 units. That's very safe, but it ties up a lot of cash. Most sellers land somewhere between the two.

Step 4: Put it together

Using 20 days of cover:

Count units already on order. If 500 units are on the water, add them to what's on the shelf before you compare to the reorder point, or you'll order twice.

Step 5: Decide how much to order

Order enough to cover the time until your next order would arrive, then round to what your supplier will actually make. If you reorder about every 90 days:

• 12 units a day × 90 days = 1,080 units
• Round up to full case packs of 48: 23 cases = 1,104 units
• Check the minimum order quantity: 1,104 is above the 1,000 MOQ, so order 1,104

Step 6: Check the cash before you order

Imports are paid in pieces: often a 30% deposit with the PO, the 70% balance before the goods ship, and then freight and duty when they land. A reorder that's right for inventory can still leave you short on cash if two POs come due in the same month. Map those payments out week by week before you commit.

Common mistakes

• Using the supplier's lead time. Production quotes leave out transit, clearance, and receiving.
• Ignoring open POs. Always reorder on stock on hand plus stock on order.
• Setting it once. Recheck reorder points when sales trends, lead times, or seasons change.
• Forgetting holidays. Factory closures, such as Chinese New Year, can add weeks to production.