Stock replenishment, end to end
Replenishment is one decision repeated forever: what to buy, how much, and by when. Everything below exists to make that decision on time rather than in a panic.
What stock replenishment means
Stock replenishment is the process of moving inventory back up to a level that will meet demand, before demand goes unmet. That is the whole idea. Everything else is technique.
It is worth separating it from two things it gets confused with. Inventory management is knowing what you have and where it is. Demand forecasting is estimating how fast it will leave. Replenishment is the decision that sits on top of both: given what I have and how fast it goes, what do I buy, and when do I have to commit?
For a store selling goods it makes or buys locally, that decision is forgiving. You notice you are low, you reorder, it arrives next week. For a store importing from Asia, the same decision has to be made months before the shelf looks empty, and the cost of being late is not just lost sales but a freight bill several times larger than it needed to be. This guide is written for the second case.
The replenishment cycle
Shopify frames the process as four repeating steps, and it is a good frame because it makes clear where most stores actually break.
- Monitor. Track stock levels and sales rates continuously, not when someone remembers to look.
- Decide. Work out what needs ordering, how much, and by when.
- Action. Raise the purchase order and send it to the supplier.
- Confirm. Receive the goods, check them against the order, and update stock so the next cycle starts from the truth.
Step four is the one that quietly breaks everything. If received quantities never make it back into your system, or the short delivery nobody logged is still counted as arrived, then step one is monitoring fiction. Every downstream calculation inherits that error, and the symptom shows up weeks later as a stockout nobody can explain.
Step 1: measure days of stock, not units
A stock level on its own means nothing. Ninety units is three months of cover for a product selling one a day, and four days for one selling twenty. The unit that actually travels between products is days of stock:
Days of stock = units on hand ÷ average units sold per day
This is the number that lets you compare a phone case to a treadmill, and it is the number the rest of the process is built on.
Calculate the sales rate only over in-stock days
This is the single most expensive error in replenishment, and it has nothing to do with sophisticated forecasting.
You sold 30 units over the last 60 days. Divide by 60 and you get 0.5 per day. But the product was out of stock for 40 of those days. The honest rate is 30 ÷ 20 = 1.5 per day, three times higher.
Use the calendar figure and you conclude your fastest seller is a slow mover. So you order less. So it sells out again. So the next calculation looks even worse. It is a feedback loop that systematically starves your best products, and because the numbers look reasonable at every step, almost nobody catches it.
If you take one thing from this page: divide by days available, not days elapsed.
Step 2: know your real lead time
Lead time is the gap between deciding and selling. It is almost always longer than people assume, because most stores measure only the transit leg. The full chain is:
- Order handling. Getting the PO agreed, deposit paid, slot booked.
- Production. Make-to-order goods are not sitting in a warehouse. For clothing this is routinely 30 to 45 days on its own, and it is invisible on any freight quote.
- Transit. Sea, rail or air, port to port.
- Customs and inland. Clearance, duties, the truck from port to your warehouse.
- Putaway. Goods on the dock are not goods you can sell.
Two seasonal effects change these numbers dramatically and are worth putting in a calendar rather than discovering:
- Chinese New Year. Factories close for weeks, and capacity is booked out for weeks before and after. Orders that normally take 60 days can take twice that.
- Peak season. Freight in the run-up to Q4 is both slower and more expensive.
Step 3: set the reorder point
The reorder point is the stock level at which you must place a new order for it to arrive before you run out.
Reorder point = (average daily sales × lead time in days) + safety stock
Safety stock is the buffer that absorbs the two things that are never as steady as the average: demand, and your supplier. Planning to the average means arriving late roughly half the time.
The full formulas and a worked example are on the dedicated page: reorder point formula.
The version that matters more for importers: the order deadline
A reorder point is a stock level, and stock levels are a bad interface for a decision that has to be made months ahead. The same maths expressed as time is far more usable:
Order deadline (days) = days of stock − total lead time − safety days
If sea freight takes 100 days door to door, you keep 14 days of buffer, and you have 120 days of stock, then you have six days left to order at the cheap price. Your shelves look completely full. This is why importers who watch stock levels are structurally late: by the time the level looks alarming, the cheap option expired weeks ago.
Step 4: decide how much to order
An order has two jobs: cover the gap that will exist when it lands, and cover the period until the next order lands. So the quantity is not what is missing today.
Order quantity = (daily sales × (lead time + coverage period)) − stock on hand − stock already on order
Three parts of that get skipped and each one costs money:
- Stock already on order. A PO placed three weeks ago and landing next month must reduce today's order. Miss it and you double-buy, which ties up cash and warehouse space in the products you are already best supplied on.
- The coverage period. How long this order should last. Longer coverage means fewer, larger orders: cheaper per unit and per shipment, but more cash tied up and more exposure if demand shifts.
- Supplier constraints. Minimum order quantities, carton sizes, container fill. An MOQ of 500 on a product selling 2 a day is a decision about tying up eight months of cash, and it should be made deliberately rather than discovered at checkout.
Step 5: choose the freight mode — the part most tools ignore
For an importer the quantity is only half the decision. The other half is how it travels, and the spread is not marginal.
| Mode | Typical door to door | Relative cost per kg |
|---|---|---|
| Sea | Around three months | Cheapest by a wide margin |
| Rail | Several weeks | Between the two |
| Air | Days | Several times sea |
Because air is an order of magnitude more expensive rather than slightly more, one avoidable air shipment can erase the margin on everything it carries. And the usual failure is not choosing air deliberately — it is noticing late and having no other option.
One mode for the whole order is usually the wrong answer. If you have 40 days of stock and sea takes 100, all-sea leaves you empty for 60 days and all-air pays a premium on units you did not need for months. The cheaper answer is a split: the bulk goes by sea, and a small bridge quantity comes by air or rail purely to cover the gap until the sea shipment lands. You pay the premium on a fraction of the order instead of all of it.
More detail on that trade-off: sea, rail or air.
Replenishment methods, and which one fits
| Method | How it works | Fits |
|---|---|---|
| Reorder point | Order when stock crosses a calculated level | Steady demand, most stores |
| Periodic review | Review on a fixed schedule and top up to a target | Consolidating orders per supplier, container fill |
| Min / max | Order up to a maximum when the minimum is hit | Simple catalogues, easy to explain |
| Demand-driven | Quantities follow a rolling forecast | Seasonal or trending products |
| Just in time | Arrive as needed, minimal buffer | Short, extremely reliable lead times — rarely importers |
Most importers end up with a hybrid: reorder points decide what is due, and a periodic review decides when orders actually go out, so that everything for one supplier ships together. Consolidating by supplier is often worth more than optimising any single product, because it saves a whole shipment.
Do not treat every product the same
An ABC split keeps the effort where the money is:
- A (roughly the top 20% by revenue). Tight monitoring, generous safety stock. A stockout here is expensive and a bridge shipment is usually worth it.
- B. Standard treatment.
- C (the long tail). Order rarely and in bulk. Optimising these consumes attention out of all proportion to the money involved.
The mirror image matters too: a slow-moving product with a high MOQ is where cash goes to die. Days of stock exposes it instantly — anything showing 400 days of cover is a purchasing decision to revisit, not a well-stocked product.
What to track
- Days of stock per product. The common currency.
- Order deadline per product. The number that prevents panic freight.
- In-stock rate. Share of days your products were available. Directly caps revenue and quietly corrupts every forecast when it is low.
- Inventory turnover. Cost of goods sold divided by average inventory value. Low means cash is sleeping.
- Supplier lead time variance. Not the average — the spread. A supplier averaging 60 days but ranging 45 to 95 needs far more safety stock than one that is reliably 70.
- Landed cost per unit. Goods plus freight plus duties. Margin computed on the supplier price alone is fiction, and for air-freighted goods it can be badly wrong.
The mistakes that cost the most
- Dividing sales by calendar days. Covered above. It systematically under-orders your best products.
- Watching stock levels instead of deadlines. With long lead times the level tells you nothing until it is too late.
- Ignoring stock already on the water. Causes double-buying.
- Treating a campaign spike as normal demand. A discount week is a price event. Fed in as demand, it inflates every forecast after it.
- Using freight quotes as lead times. They exclude production, customs and putaway — frequently half the real elapsed time.
- Planning to the average. No safety stock means running out roughly half the time by design.
- Never reconciling receipts. Short and damaged deliveries that are never logged make the system's stock figure diverge from the warehouse, permanently.
When a spreadsheet stops being enough
Everything here works in a spreadsheet for thirty products. The failure point is usually somewhere between one hundred and five hundred SKUs across several suppliers with different lead times and MOQs. Not because the maths gets harder — it does not — but because the deadlines stop lining up, the sheet stops being updated daily, and the decisions quietly revert to memory and gut feel.
The tell is not a missing spreadsheet. It is air freight appearing on invoices for products nobody decided to expedite.
Restocio does this continuously for every product: in-stock sales rate, real lead time including production, order deadline as a countdown, quantity net of what is already on the water, and the sea/rail/air split for each order. If you were relying on Stocky for the reorder suggestions, that gap is what closed on 31 August 2026.
Common questions
What is stock replenishment?
The process of ordering inventory back up to a level that meets demand before you run out. In practice it is one repeated decision: what to order, how much, and by when, based on how fast each product sells and how long delivery takes.
How do I calculate how much stock to order?
Order quantity = (average daily sales x (lead time + the period this order should cover)) minus stock on hand minus stock already on order. Subtracting stock already on order is the step most often skipped, and it is what causes double-buying.
What is the difference between a reorder point and an order deadline?
They are the same calculation expressed differently. A reorder point is a stock level; an order deadline is the last date you can order and still arrive in time. For long lead times the deadline is far more useful, because stock levels still look healthy months after the cheap ordering window has closed.
How often should I review replenishment?
Sales rates and deadlines should be recalculated daily, because a deadline that passed yesterday cannot be recovered. Actually placing orders is usually better done on a fixed weekly or monthly rhythm per supplier, so that everything for one supplier ships together.
Does Shopify handle stock replenishment automatically?
Shopify's built-in inventory tools cover purchase orders, transfers, adjustments and history, and Shopify Flow can send low-stock alerts. They do not include a demand-forecasting engine or automatic reorder quantities, and built-in minimum and maximum stock levels are not part of the admin.
Related guides
- Reorder point formula, with a worked example
- Replenishment for Shopify stores
- Inventory forecasting, without the mystique
- Sea, rail or air: freight planning for importers
Restocio plans purchasing for Shopify stores that import. It works out what to order, how much, and whether it should travel by sea, rail or air — so you pay air freight only for the units that genuinely cannot wait.