A Practical Reorder-Point Calculator for China Fulfilment

The basic formula

A common starting point is: reorder point = average daily unit sales × replenishment lead time in days + safety stock. Shopify uses the same structure in its reorder-point guidance. The output is the available-stock level at which a new replenishment decision should be triggered.

Example

Suppose one variant sells an average of 8 units per day. Production and movement to the fulfilment warehouse take 18 days in total, and the seller chooses 40 units of safety stock.

• Lead-time demand: 8 × 18 = 144 units.
• Safety stock: 40 units.
• Reorder point: 144 + 40 = 184 available units.

When that SKU reaches 184 genuinely available units, the planned reorder should be released. This is not a prediction that exactly 184 units will sell; it is a trigger designed to cover normal demand during replenishment plus a chosen buffer.

Use the complete lead time

For China fulfilment, replenishment may include supplier confirmation, material or production time, domestic movement, receiving, QC and release into sellable stock. Count the time until units become available, not merely the factory's production estimate.

Choose a safety-stock method that fits the evidence

• Simple buffer: a fixed number of days of average sales.
• Variability buffer: extra units based on recent demand spikes and late supplier performance.
• Event buffer: a deliberate temporary increase before a campaign or seasonal period.

New products have little sales history. Use a small staged commitment, a downside plan and frequent review instead of pretending a precise formula can remove uncertainty.

Calculate by SKU, not product family

A product may have plenty of total stock while its best-selling size or colour is almost gone. Calculate sales velocity, lead time and available units for each variant that must be picked separately. Component stock can also constrain a bundle even when the main item is abundant.

Use the right stock number

Shopify distinguishes available, committed, unavailable, incoming and on-hand stock. The reorder trigger should not treat damaged, QC-held, reserved or merely incoming units as currently available. Show incoming purchase orders separately and confirm their expected release date.

Review the inputs

• Weekly for fast-moving, launch or campaign SKUs.
• After a supplier, material, packaging or route change.
• When lead-time performance or demand variability changes materially.
• Before major holidays or marketing events.

Also decide the reorder quantity separately. The trigger says when to act; order quantity must balance MOQ, cash, storage, shelf life, version risk and expected demand.

The practical takeaway

A reorder point is useful only when its inputs match the physical workflow and the exact SKU. Start simple, record actual lead times and sales, then improve the buffer with evidence.