E-commerce Glossary

Reorder Point

Stock level at which you must place a new supplier order to avoid stockout.

Reorder point is the stock threshold that triggers replenishment. It takes into account average demand during the supplier lead time, plus a safety stock.

Calculation: Reorder Point = (Average daily demand x Lead time in days) + Safety stock. For example, for a demand of 20 units/day, a 7-day lead time, and a safety stock of 30, the reorder point is 170.

A well-calibrated reorder point ensures availability without overstocking. It must be revised regularly as demand and lead times evolve with seasonality, promotions, and supplier performance.

Fullmetrix automatically calculates the reorder point per SKU by analyzing sales history, demand volatility, and your suppliers' lead times, with real-time alerts.

Related terms

AOV (Average Order Value)Average amount spent per order in your store.See definition ARPU (Average Revenue Per User)Average revenue generated per user over a given period.See definition Blended CACAverage acquisition cost including all marketing channels.See definition Blended ROASOverall return on all advertising spend combined.See definition CAC (Customer Acquisition Cost)Total cost to acquire a new customer.See definition Churn RatePercentage of customers lost over a given period.See definition
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