The reorder point formula is everywhere now. Average daily sales, multiplied by lead time, plus safety stock. Every inventory roundup published this year has the same three terms in the same order, and plenty of tools will happily suggest a number at you.
The formula is fine. It is also not an order.
Your factory has a minimum order quantity of 500. Their cartons hold 24. Freight is free over a threshold you are nowhere near with one SKU. So the number that comes out of the formula, 180, is a number you cannot actually place. Somewhere between the spreadsheet and the email to your supplier, a human has to make three decisions that no reorder point calculator makes for them.
This is a guide to those decisions: how to round, when to consolidate, and how to tell whether taking the MOQ is a sensible trade or a cash-flow mistake dressed up as a bulk discount.
Why the formula stops short
A reorder point is a trigger level. It answers one question: at what stock level must I place an order so the new stock lands before the old stock runs out. Our reorder point guide works the maths through with examples, and if you have not set thresholds per product yet, start there.
What it does not answer is the quantity question, because the quantity question is not really about your demand. It is about your supplier's manufacturing economics:
- MOQ exists because setting up a production run costs the factory the same whether they make 200 units or 2,000.
- Case and carton quantities exist because that is how the goods are physically packed and counted.
- Freight thresholds and container fills exist because moving a pallet costs roughly what it costs regardless of how full it is.
None of those constraints know or care what your average daily sales are. They apply on top of your number, and they always round in the same direction: up.
Round in the right order
There is a sequence, and getting it wrong is how you end up ordering 504 units when you meant 500.
Step 1: raw quantity. A sensible default rule is a target multiple of your threshold, minus what you still have on the shelf:
Order quantity = (threshold × target multiple) − current stock
2.5x the threshold suits most suppliers; 3x if lead times are long or unreliable.
Step 2: round up to the case size. If they pack 24 to a carton, 190 becomes 192. Never round down, because a part carton is the thing that generates an email from their warehouse and costs you three days.
Step 3: round up to the MOQ. If the MOQ is 500 and you are at 192, the order is 500. Then check that 500 is still a whole number of cartons. 500 divided by 24 is 20.83, so the real order is 21 cartons, or 504 units.
That last step is the one people miss. MOQ and case size are two separate constraints and they have to both be satisfied, not just the larger one. Get it wrong once and the discrepancy shows up at receiving, weeks later, when you are trying to work out whether the factory shorted you or you ordered badly.
A worked example
Say a fast mover sells 6 units a day. Lead time is 25 days, safety stock 30 units, so the reorder point is 180. Stock hits 180, the trigger fires, and the rule suggests 450 minus current stock, call it 270 units.
The factory's MOQ is 500 and cartons hold 24. The order you can actually place is 504 units, in 21 cartons.
You are now buying 234 units more than the rule asked for. Before you send it, do one piece of arithmetic.
Convert the MOQ into days of cover
Days of cover = order quantity ÷ average daily sales
504 units at 6 a day is 84 days. Just under three months of stock, on a product that sells every day. That is entirely normal and you should send the order.
Now run the same sum on a slow mover. Same MOQ of 500, but the product sells 1 unit a day. That is 500 days of cover: sixteen months of cash sat on a shelf, through at least one season change and probably one packaging redesign.
A rough working rule, and you can move it to suit your category:
- Under 3 months of cover: order it, no further thought needed.
- 3 to 6 months: fine for a stable core line. Worth a glance at whether the product is trending down.
- Over 6 months: stop. This is not a reordering decision any more. It is a question about whether you keep stocking the product at all, whether you can negotiate the MOQ, or whether you accept it once and discontinue.
The cash side matters as much as the shelf side. At an example landed cost of £4 a unit, 504 units is roughly £2,016 committed, against £1,080 if you could have ordered 270. That extra £936 is money not spent on ads, not spent on the SKU that is actually selling out, and not in the bank through BFCM.
Consolidate instead of ordering four times
Here is the failure mode that costs more than MOQ rounding, and almost nobody writes about it.
You buy four SKUs from the same factory. They hit their reorder points in different weeks, because they sell at different rates. So you place four orders, three weeks apart, and pay freight and customs handling four times on four part shipments. Each individual order was correct. The set of them was expensive.
The fix is to treat the supplier, not the SKU, as the unit of ordering. When one SKU from a factory triggers, look at every other SKU from that factory and ask a different question: not "has it hit its reorder point" but "will it hit its reorder point before the next shipment lands".
If the lead time is 30 days and a second SKU has 35 days of cover, it belongs on this order. Pulling it forward costs you five days of extra holding. Leaving it off costs you a second freight charge, or a stockout while you wait for the next container.
Two practical trigger levels are worth writing down per supplier:
- The free-freight or consolidation threshold. If the supplier ships free over an order value or a carton count, that number is a second reorder point. Getting to it with SKUs you were going to buy anyway is free money. Getting to it with SKUs you were not is a discount you paid for.
- The container or pallet fill. If you are importing, the step change in cost per unit happens at fill boundaries, not gradually. Knowing where your current order sits against the next boundary is what turns "should I add another 200 units" into an answerable question.
One more thing to keep straight when you consolidate: if your suppliers use their own item codes rather than yours, one order with twelve lines means twelve translations, done under time pressure. That is where wrong-goods errors come from. Keep a mapping table per supplier and let the purchase order do the translation at the point it is generated.
Set the rules once, per supplier
All of the above is arithmetic. None of it should be happening in your head at 11pm, which is the argument for automating the whole reorder loop rather than just the spreadsheet template.
In Replenishly, the constraints live on the factory, not in your memory:
- MOQ and case size per factory. Set a minimum order quantity, a case size, or both, and quantities are rounded up automatically so every PO leaves in valid multiples. No part cartons, no rejected orders.
- Per-product factory assignment. Assign each product to its supplier directly in the inventory table, so when items are low they are already routed to the right factory.
- A live low-stock view you can select from. The inventory table shows everything below threshold with urgency bars and a vendor filter, so you can pull the other SKUs from that factory onto the same order instead of ordering them separately three weeks later. Select items from several factories at once and they are grouped by factory, one draft each.
- Editable quantities before you approve. The preview modal lets you change any line, and saving regenerates the .xlsx so the file the factory receives always matches what you decided.
- An "In PO" badge. Items already sitting in an open draft are badged, so consolidating does not turn into duplicate ordering.
- A cooldown after receiving. Adjusting stock when a delivery lands does not fire a fresh order for the same SKU.
The output is a .xlsx in your factory's own column layout, built from a template you upload once, emailed to them with your shop owner address as the reply-to. Full detail of every setting is on the features page.
When to push back on the MOQ
MOQs are not always fixed, and factories would usually rather sell you something than nothing. Things that work, in rough order of how often:
- Ask for a split shipment against one order. You commit to the full 500 for their production run, they ship 250 now and 250 in eight weeks. You get the MOQ price with half the cash exposure.
- Consolidate across SKUs to hit a value-based minimum. Many MOQs are really minimum order values wearing a unit-quantity costume. Four SKUs at 150 each may satisfy a minimum that 500 of one SKU was meant to.
- Accept the MOQ once, then ask for a lower repeat minimum. Second orders are cheaper for them to run than first orders, and it is a reasonable thing to ask for in writing.
- Ask what the carton and pallet boundaries actually are. Sometimes the MOQ is a round number someone picked, and the real constraint is the pallet.
What does not work is quietly ordering under the MOQ and hoping. It comes back as a question, and questions cost days.
Start with one supplier
Pick the factory you order from most. Write down three numbers: their MOQ, their case size, and the threshold at which freight becomes free or worthwhile. Those three numbers turn your reorder points from interesting into actionable.
Then let something else do the rounding every time.
Install Replenishly from the Shopify App Store, add your factory with its MOQ and case size, and generate a factory-ready Excel purchase order from your current low-stock list. There is a 14-day free trial, so you can see the first PO before you pay for anything.