A reorder point is the stock level that triggers a new purchase order. When the quantity on hand falls to that number, it is time to order so that the delivery lands before the shelf is empty.
It is usually calculated as the average daily sales multiplied by the supplier lead time, plus safety stock. If a product sells 10 a day and the supplier takes 7 days to deliver, the base reorder point is 70 units before any buffer is added.
Retail inventory systems can flag or automatically raise suggested orders when an item hits its reorder point. This suits steady-selling lines such as basics, consumables and core ranges. Seasonal and promotional items usually need adjusting by hand or with forecasting.
Pitfalls include using outdated sales rates, ignoring supplier lead-time changes and not allowing for minimum order quantities. A reorder point that is too low causes stock-outs; too high ties up cash in stock. It also relies on accurate stock on hand.
Reorder points turn ordering from guesswork into a repeatable rule, which frees staff time and reduces lost sales. They are a simple first step before more advanced demand forecasting. Review the figure whenever sales patterns or supplier terms change, so the trigger stays current.