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Never run out of stock: reorder points for small shops

Guides · November 2, 2026 · 3 min read · By Rahul Menon, Growth, LogAI

Running out of your best seller costs you the sale and often the customer. Ordering too much of a slow mover costs you the cash you needed for the best seller. Most small shops manage this by feel, and feel works until the business grows past what one person can hold in their head.

A reorder point fixes this with two numbers you already have: how fast a product sells and how long it takes to arrive. Here is how to set it, product by product, in an afternoon.

The formula

Reorder point = daily sales × supplier lead time in days + safety stock.

Daily sales: average units sold per day over the last 30 to 90 days. Lead time: the days between placing the order and the stock being on your shelf, including the supplier's processing time and transit. Safety stock: a buffer for the weeks when sales spike or the courier is late.

Example. A kurta sells 3 a day. The supplier takes 10 days. You keep 5 days of sales as a buffer. Reorder point = 3 × 10 + 3 × 5 = 45. When stock drops to 45, you order. A simple rule for safety stock is one to two weeks of sales for fast movers and less for slow ones; adjust after a few cycles.

How much to order

Order enough to last until the next order would normally arrive, minus what is left when it lands. A practical version: order quantity = daily sales × days between orders. If you reorder monthly, order 30 days of sales. Round to the supplier's pack size and to what your cash allows. Ordering too much of a fast mover is a far smaller sin than ordering too much of a slow one.

Not every product deserves the same attention

Sort your catalogue by how much revenue each product brings. The top 20 percent of products usually bring most of the revenue; set reorder points carefully for those and check them weekly. The middle group gets rough reorder points and a monthly check. The long tail is where dead stock hides: order small, or order on demand.

Find your dead stock

Dead stock is anything that has not sold in 90 days. List it, work out what you paid for it, and decide: discount it, bundle it with a best seller, return it to the supplier if you can, or write it off. Cash sitting on a shelf is cash you cannot spend on the products that do sell. Then look at why you bought it and change the reorder rule so it does not happen again.

Count less, record more

Stock counts go wrong because the number in the book and the number on the shelf drift apart between counts. The fix is to record every movement as it happens: sales, returns, deliveries, transfers between shops and the box that got damaged. When every change has a reason and a date, the count is almost always right and a mismatch tells you exactly where to look.

LogAI does this with a stock ledger behind every product: sales from the store, counter and WhatsApp reduce stock automatically, purchase receipts add it at the price you paid, and manual adjustments need a reason. Low-stock signals appear on the home dashboard, and a purchase order to the supplier takes a minute from the product page.

A simple weekly routine

• Monday: look at the low-stock list and the products that hit their reorder point. Raise purchase orders.
• Wednesday: receive deliveries against the purchase order so stock and cost update at the same time.
• Friday: check the ten best sellers by hand. If one is selling faster than its reorder point assumes, raise the point.
• Monthly: run the dead-stock list and decide what to do with each item.

We used to run out of our two best sellers every festival. Now the reorder happens before we notice.

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