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What Is a Reorder Point? Never Run Out of Stock Again

Reorder point explained simply, with the formula and how to automate it so you never lose a sale to a stock-out.

1 Aug 20261 min readMyGroce Team

A reorder point is the stock level at which you should place a new purchase order — low enough to avoid overstocking, high enough to never run out before new stock arrives. Here is how to set it.

The simple formula

Reorder point = (average daily sales × supplier lead time in days) + safety stock. If you sell 10 units/day, your supplier takes 4 days, and you keep 20 as buffer, reorder at 60.

Why it matters

Set it too low and you lose sales to stock-outs; too high and cash sits on shelves. The right reorder point balances both automatically.

Automate it

Inventory software tracks daily sales velocity and lead times, then fires a low-stock alert (or drafts a purchase order) the moment you hit the reorder point.

Frequently asked questions

How do I stop running out of stock?

Set reorder points and enable low-stock alerts. MyGroce tracks stock in real time and alerts you before you run out.

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