Setting reorder points and safety stock correctly: no more empty shelves

“Why are we out of this again?” – Stockouts cost revenue, overstocks tie up capital. Between the two sit two unassuming numbers: the minimum stock and the reorder point. Set them deliberately for each item, and you order with less stress and sell more reliably.

This article explains both terms, shows a simple rule of thumb, and how to maintain the values in your inventory management system in practice.

Minimum stock and reorder point: the difference

• The minimum stock (safety stock) is your iron reserve: the quantity that cushions fluctuations and delivery delays and should ideally never be touched.
• The reorder point is the trigger: once stock on hand reaches this threshold, a new order is placed – in good time, before the minimum stock is reached.

A simple rule of thumb

For many businesses, this is enough as a starting point: reorder point = average daily usage × replenishment lead time in days + minimum stock.

An example: if you sell an average of 6 units of an item per day and your supplier needs 5 days, that makes 30 units – plus a minimum stock of around 10 units gives you a reorder point of 40. These values are starting points, not dogma: observing and readjusting is part of the process.

Maintain in practice instead of guessing

• Start with your top sellers: your 20 most important items deliver the biggest impact.
• Use sales reports: actual sales per item replace gut feeling.
• Factor in seasonality: summer and winter items need different values.
• Set replenishment lead times realistically – including weekends and public holidays.
• Enable automatic notifications as soon as the reorder point is reached.

How inventory management helps

A connected system counts along automatically with every sale – at the cash register and in the online shop alike. When an item hits its reorder point, it directly generates an order proposal for the supplier. The stocktaking list becomes a continuous cycle: sell, flag, order, receive goods – with no Excel steps in between.

Conclusion

Reorder points and minimum stock are not theory – they are the cheapest early-warning system against empty shelves. With realistic values and automatic order proposals, your range stays available without cluttering up the stockroom. We would be happy to show you how to set up both in Lonio in a free initial consultation.