Amazon FBA Reorder Point Formula Explained

Quick answer: The basic Amazon reorder point is average daily demand multiplied by the full lead time in days, plus safety stock. Full FBA lead time includes supplier production, preparation, transport, customs, warehouse handling, shipment creation, delivery to Amazon, and receiving. Compare the reorder point with inventory position, not only currently available FBA units.

Most Amazon stockouts begin before the inventory looks low. The supplier hasn't been contacted, packaging isn't booked, freight isn't scheduled, and the team still sees 900 units in FBA and assumes there's time. A reorder point moves the decision earlier, telling the seller when inventory position has fallen low enough that a new order must be placed to cover demand during the complete replenishment cycle.

The basic reorder point formula

Reorder point equals average daily demand times lead time in days, plus safety stock. If a product sells 12 units a day, takes 45 days from purchase order to available FBA stock, and carries 15 days of safety stock: lead-time demand is 12 times 45, or 540 units; safety stock is 12 times 15, or 180 units; reorder point is 720 units. The seller should place the next order when inventory position falls to about 720 units, not when available FBA stock reaches 720.

What is inventory position?

A practical formula is available stock plus usable reserved stock plus inbound stock likely to arrive in time plus supplier or 3PL stock allocated to the SKU, minus committed demand and backorders. Each component needs judgment: customer-order reserved units are already committed and shouldn't count as free supply, FC-transfer units may count toward physical cover but not immediate delivery cover, and inbound stock should count only when its expected available date fits the plan, all covered in more depth in Amazon reserved inventory explained.

Use the full lead time

Sellers often use supplier lead time and forget everything after the factory door.

A spreadsheet using 24 days would reorder 40 days too late. Use actual dates from the last several orders. Average lead time is useful, but the upper range matters for safety stock.

How to calculate safety stock

The simple days-of-cover method sets safety stock as average daily demand times safety days, easy to understand and suitable for small sellers. The maximum-risk method sets safety stock as maximum daily demand times maximum lead time, minus average daily demand times average lead time, creating a larger buffer when both demand and lead time can spike, though it can overstate needs if the maximums are rare outliers. More advanced systems use demand variation, lead-time variation, and a chosen service level. The goal isn't mathematical sophistication. It's a buffer that reflects real uncertainty without turning every SKU into overstock.

Which sales window should you use?

Use multiple windows: 7 days to detect a recent surge or collapse, 30 days for current operations, 90 days to smooth short noise, and year-over-year data for seasonality, an approach covered in more depth in Amazon sales velocity. A simple rule is starting with 30-day velocity, then comparing it with 7-day, 90-day, and the same period last year. Don't average a stockout period as though demand disappeared, since lost availability can depress observed sales.

How to handle seasonality

A seasonal reorder point needs the demand expected during the lead-time period, not the demand from the quiet month when the order is placed. Suppose a gift product sells 5 units a day in August but 25 a day from mid-November. A 75-day lead time means an August purchase order arrives into the holiday ramp, so using August velocity would create a stockout before the main season. Use last year's weekly units, planned promotion dates, and current year trend versus last year, and write the forecast assumption beside the order so future teams know why 3,000 units were ordered.

Reorder point is not reorder quantity

The reorder point tells you when to order. Reorder quantity tells you how much, based on target days of inventory, supplier minimum order quantity, cash budget, and storage and aging risk. A seller might hit a reorder point at 720 units and order 1,500 to return to a target of 90 days. Another may order 500 because demand is uncertain and a new order can be placed monthly.

Common Amazon reorder mistakes

Reordering from available FBA only ignores inbound and transfer stock and can cause overbuying. Counting all inbound equally treats a shipment booked yesterday the same as units checked in at Amazon. Using one lead time for every supplier ignores that production, customs, and receiving vary by product and route. Ignoring promotions lets a deal consume the safety stock before the replacement shipment is available. And applying replenishment logic to one-off inventory, a used book or arbitrage find that may not be reorderable, wastes effort better spent on sell-through and sourcing decisions.

The real lead time was 57 days, not 30

A seller sold replacement water filters. The spreadsheet showed 42 days of inventory and a 30-day supplier lead time, so the next order was delayed. But the 30 days covered production only, freight, customs, prep, and Amazon receiving added another 27 days, meaning the business was already inside the real 57-day lead time. Raising price to slow demand, pausing broad ads, and using a smaller air shipment to bridge the gap solved it. The air freight was expensive, but less expensive than losing the listing's sales for three weeks. Afterward, splitting lead time into six stages and using the 80th percentile of recent receiving time for safety planning prevented a repeat.

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EcomSanity provides two essential inputs: sales velocity and days of inventory. Even without a full purchase-order module, alerts can identify when available cover crosses a threshold, with different thresholds for stable replenishable SKUs, seasonal products, and one-off inventory. For how this changes once AWD or a 3PL sits upstream of FBA, see Amazon AWD vs FBA vs a 3PL.