How to calculate your reorder level

Most shops restock when a product finishes, or when the shelf "looks low". The problem is the gap between ordering and receiving. If your supplier takes five days, every day of those five is a day you are telling customers "it's finished". Some of them don't come back.

A reorder level fixes this with one number per product. When stock drops to that number, you order. If the number is right, the new delivery arrives just before the last one sells.

Add up how many units of the product you sold over the last four weeks and divide by the number of days you opened. Four weeks smooths out a busy Saturday or a slow rainy week. If the product is new, use what you have and check again in a month.

Leave out one-off days that won't repeat, like a bulk order from one customer. Do include online orders and sales at other branches if they come out of the same stock.

Lead time is not just the supplier's promise. It runs from the moment you decide to order to the moment the goods are counted and on the shelf: waiting for the supplier to confirm, payment clearing, the delivery itself or your trip to the market, and the time it takes to unpack.

Use your usual delivery time, not your best one. If goods from Lagos Island usually take three days but sometimes a week, use three for the calculation and cover the bad weeks with safety stock.

Safety stock covers the days you sell more than usual and the deliveries that come late. For most shops a simple rule is enough: keep two to three days of sales extra for steady products, more for fast sellers and for anything from an unreliable supplier.

If you want a number based on your records, use: (your highest daily sales × your longest usual lead time) − (your average daily sales × your average lead time). For example, if you usually sell 4 a day but sometimes 6, and delivery usually takes 5 days but sometimes 6: (6 × 6) − (4 × 5) = 36 − 20 = 16. That protects you against the worst normal week, which is often more than a small shop needs or can afford to hold.

The reorder level tells you when to order. How much depends on your cash, your space and how often you can buy. A practical rule: order enough to last until your next normal buying trip, plus a little extra. If you buy every two weeks and sell 4 a day, order around 56, then adjust for any minimum the supplier sets or a discount for buying more.

There are formulas for this too (economic order quantity, for example), but for most small shops the deciding factors are the cash you have this week and how much you can safely store.

In StockỌja, each product has a "Low-stock alert at" level, and you can set a different level for each branch, because a busy shop and a small kiosk need different numbers. Every sale through the point of sale or the online store reduces stock immediately, and stock reserved for online orders isn't counted as available.

Anything at or below its level appears in the dashboard's Low stock list and in your notifications, so you only look at what needs ordering. Our guide on stock taking helps keep the counts behind those alerts accurate.