Reorder Point (ROP) is the stock level that triggers a new purchase order. When on-hand inventory drops to the ROP, you order replenishment stock so it arrives before you run out.
Formula:
ROP = (Average Daily Sales Γ Lead Time in Days) + Safety Stock
Example Calculation
- Average daily sales: 15 units
- Supplier lead time: 25 days
- Safety stock: 75 units
ROP = (15 Γ 25) + 75 = 450 units
When your FBA inventory drops to 450 units, place a new purchase order. By the time the supplier ships and Amazon checks in the units (25 days later), you will have sold approximately 375 units, leaving your 75-unit safety stock buffer intact.
Lead Time Components for Amazon FBA
Lead time is not just the supplier's production time. For FBA sellers, total lead time includes:
- Production / manufacturing β varies by product and supplier
- Quality inspection β 1β3 days
- Export customs and freight β 14β35 days for sea freight, 5β7 days for air
- Amazon FC check-in β 1β7 days after delivery (varies by FC congestion)
Build all four stages into your ROP calculation.
ROP vs. Safety Stock vs. MOQ
These three work together:
- ROP β when to order
- Safety stock β how much extra to hold as insurance
- MOQ β the minimum the supplier will sell you per order
If your calculated reorder quantity is below the supplier's MOQ, you must order MOQ units even if your model says you need fewer. This can push storage fees up β factor that into your decision to hold more safety stock instead.
Adjusting ROP for Seasonality
ROP is not a fixed number. Increase average daily sales assumptions (and therefore ROP) heading into Q4, Prime Day, and other peak periods. Failing to do this is a common reason FBA sellers go out of stock in high-velocity windows.