Inventory replenishment: how to restock without overstocking

What replenishment means in practice

Replenishment covers any movement of stock that brings inventory back up to a target level:

• Reordering from a supplier when stock runs low.
• Transferring between locations, for example from a central warehouse to a store or a second fulfillment center.

The goal is the same either way: keep enough stock to cover sales until the next delivery, and no more. Too little causes stockouts; too much ties up cash and creates dead stock.

Method 1: Reorder point (continuous review)

You watch stock continuously and reorder as soon as it falls to a set level, the reorder point.

Reorder point = (Average daily sales × Lead time in days) + Safety stock

Best for: best-sellers and products where a stockout is expensive. Inventory software or a daily check makes it easy to run.

Reorder Point CalculatorThe exact stock level that should trigger your next reorder.Open calculator

Method 2: Periodic review

You check stock on a fixed schedule, say every two weeks, and order enough to bring it back up to a target level.

Target level = Average daily sales × (Review period + Lead time) + Safety stock Order quantity = Target level − Inventory position

Review period

days between stock checks

Inventory position

stock on hand + stock already on order

Worked example: periodic reviewExample numbers

Input	Value
Average daily sales	10 units
Review period	14 days
Lead time	21 days
Safety stock	60 units
Inventory position at review	180 units

1. Target level = 10 × (14 + 21) + 60 = 410 units
2. Order quantity = 410 − 180 = 230 units

Best for: stores that order many products from the same supplier, so orders can be combined on a regular schedule. It needs more safety stock than a reorder point, because stock can run down between reviews.

Method 3: Min/max

You set a minimum and a maximum for each product. When stock falls to the minimum, you order enough to bring it back up to the maximum.

• Min works like a reorder point.
• Max caps how much you hold, usually the minimum plus a sensible order size, such as the economic order quantity.

Best for: simple setups and spreadsheets. Many inventory tools support it out of the box. Its weakness is that the levels go stale unless you update them as sales change.

Method 4: Demand-driven (forecast-based)

Instead of fixed levels, you forecast each product's sales for the coming weeks and order enough to cover the forecast through the next lead time, plus safety stock.

Best for: growing, seasonal or promotion-heavy stores, where last month's average is a poor guide to next month. The trade-off is effort: it needs reliable sales history by product and a forecast that's updated regularly, which is where forecasting software earns its keep.

Want this handled automatically?Forecast demand and know exactly when to reorder, before you stock out or tie cash up in overstock.Try Verve AI

Which method fits which products

Most stores mix methods: reorder points for the top sellers, periodic review for the long tail.

Matching the method to the product

Not every product deserves the same attention. A simple way to split them is ABC analysis, which ranks products by how much revenue they bring in:

Shopify's ABC product analysis report grades your variants this way, or you can sort a sales export by revenue in a spreadsheet.

A simple weekly replenishment routine

1. Update sales velocity. Recalculate average daily sales for each product over the last 30 days, leaving out days it was out of stock.
2. Check A products against their reorder points, using inventory position (on hand plus on order).
3. Review B products on their scheduled day and top them up to target.
4. Chase open purchase orders. Note any late shipments, and update lead times if a supplier is slipping.
5. Flag slow movers. Anything with no sales in your cutoff window goes on a dead stock review list.
6. Place orders by supplier, combining products to meet minimum order quantities or fill a shipment.

For a small catalog this takes an hour or two a week, and it catches most stockouts and overstock before they happen.

Common inventory replenishment mistakes

• Setting levels once and never updating them. Sales velocity and lead times change; your levels should too.
• Ignoring stock already on order, which leads to duplicate purchase orders.
• Using averages that include stockout days. Days with no stock show zero sales and drag the average down.
• One safety stock rule for everything. Best-sellers and slow movers need different buffers. The safety stock calculator helps set them.
• Forgetting seasonality. Peak demand and longer peak lead times need planning months ahead. See the guide to lead time.