Running out of stock is one of the fastest ways resellers lose money — and trust. When your best-sellers go out of stock, you don’t just miss sales in the short term, you also risk dropping in search rankings on Amazon or eBay and losing repeat buyers to competitors. The solution is simple but powerful: set reorder levels (also called reorder points).
In this guide, we’ll dive into what reorder levels are, how to calculate them, and how you can apply them to your reseller workflow. With just a little planning, you can dramatically reduce stockouts, keep customers happy, and ensure your cash keeps flowing.
What Is a Reorder Level?
A reorder level (or reorder point) is the minimum quantity of a product you want to have in stock before placing a new order. Think of it as your early-warning system. Instead of waiting until you’re completely out of an item, you reorder when stock hits this level.
Example: If you sell a toy that moves 1 unit per day, and your supplier takes 7 days to deliver, your reorder point should be at least 7 units — ideally 10–12 to allow for delays.
Why Stockouts Hurt Resellers
Stockouts may seem like a temporary problem, but they can snowball quickly:
- Lost revenue: Every day you’re out of stock means money left on the table. If a $20 product sells 5 units/day, a 7-day stockout costs $700 in lost sales.
- Lower marketplace rankings: Platforms like Amazon push out-of-stock listings down in search results. Even when you restock, it can take weeks to regain visibility.
- Customer trust: Consistency builds loyalty. If buyers can’t find your product when they want it, they may switch permanently to a competitor.
How to Calculate Your Reorder Point
The basic formula is straightforward:
Reorder Point = (Average Daily Sales × Supplier Lead Time) + Safety Stock
- Average Daily Sales: How many units you typically sell each day.
- Supplier Lead Time: How long it takes to receive new stock after ordering.
- Safety Stock: Extra units to cover unexpected demand spikes or shipping delays.
Example: You sell 3 units/day. Your supplier lead time is 10 days. You keep 15 units as safety stock.
Reorder Point = (3 × 10) + 15 = 45 units.
When your stock drops to 45, it’s time to reorder.
Setting Safety Stock the Smart Way
Safety stock is your cushion, but too much ties up cash. Here’s how to be strategic:
- Look at demand patterns: If holiday sales double your daily average, increase safety stock in November and December.
- Factor in supplier reliability: If a supplier often ships late, build in a larger buffer.
- Segment products: Fast movers need higher safety stock. Slow movers can get by with minimal backup.
Using Spreadsheets vs. Tools
If you’re starting out, a spreadsheet with formulas works perfectly. You can track daily sales, lead times, and reorder levels with simple math. But once you’re managing dozens or hundreds of SKUs, automation becomes a lifesaver.
Inventory tools (like ByteConn’s Inventory System) can:
- Track sales in real-time.
- Send alerts when stock reaches reorder levels.
- Sync across multiple marketplaces (Amazon, eBay, Walmart, etc.).
This shift saves hours of manual work and dramatically reduces the risk of human error.
Bonus Tip: Prioritize Your Best Sellers
Not every product deserves detailed reorder planning. Start with your top 5–10 products that drive the majority of your profits. Keeping these consistently in stock will have the biggest impact on revenue.
Pro Tip: Use the 80/20 rule. Often, 20% of your products generate 80% of your sales. Focus on these first.
FAQs on Reorder Levels
Q: How do I know if my reorder point is set correctly?
Check historical sales data. If you still experience stockouts, increase safety stock. If you often have excess, reduce it to free up cash.
Q: Should I have different reorder levels for each marketplace?
Yes. Demand on Amazon may differ from eBay. Track per-channel sales for accuracy.
Q: How often should I review reorder levels?
At least once per quarter, and always before major seasonal demand (Q4, back-to-school, etc.).
Final Thoughts
Stockouts aren’t just an inconvenience — they’re a revenue killer. By calculating reorder points and setting safety stock levels for your best sellers, you can build a more reliable, profitable business. Start simple with a spreadsheet, then graduate to inventory management tools as you scale.
This week, pick your top 5 best-selling products and calculate their reorder points. You’ll instantly gain more control over your inventory and prevent the costly surprise of running out.