The short version- Measure weekly usageTotal the amount consumed by the orders you actually fulfilled over four weeks and divide by four.
- Know your lead timeAsk each supplier how many days from order to doorstep, then use the slowest realistic figure.
- Reorder point formulaWeekly usage divided by seven, multiplied by lead time in days, plus a safety buffer of roughly one week of usage.
- Group by supplierPlacing one combined order per supplier cuts delivery fees and reduces the number of things you have to remember.
Takeaway. A reorder point converts panic buying into a calm weekly shopping list.
A worked example: candle wax
You make candles and over the last four weeks you poured 3 kg, 2.4 kg, 2.8 kg and 3.4 kg of soy wax, a total of 11.6 kg, so average weekly usage is 2.9 kg. Your supplier takes five days to deliver, occasionally six. Use six.
Daily usage is 2.9 divided by 7, about 0.41 kg. Multiply by the six-day lead time and you need 2.5 kg to survive the wait for a delivery. Add a safety buffer of one week, 2.9 kg, and your reorder point is 5.4 kg. When the wax bin shows 5.4 kg, you order, and the new wax lands before the old runs out.
The same formula works for flour, fragrance oil, jars and labels. One material at a time, five minutes each, and panic buying disappears.
The three ways reorder points go wrong
The first is using hopeful lead times. If the supplier usually delivers in four days but sometimes takes eight, the number for your formula is eight, because the cost of ordering late is a stalled production week, not a mild inconvenience. Plan to the slow realistic case, enjoy the early deliveries.
The second is stale usage figures. If you measured usage during a quiet January and it is now the October rush, every reorder point is too low. Re-measure whenever your sales volume shifts, and at least once a quarter. Makers with strong seasons keep two sets of numbers, one for peak and one for off-peak.
The third is forgetting that usage includes committed orders. If you accepted a market stall order for next Saturday, that wax is already spoken for. Reorder points only protect you when stock means uncommitted stock.
From points to a weekly rhythm
Reorder points work best as a habit, not a scramble. Pick one morning a week, check each material against its point, and place one combined order per supplier. The grouping matters: five separate deliveries cost five delivery fees and five interruptions, one combined order costs one of each.
Keep the buffer honest. The instinct to hold two months of everything feels safe but ties up cash in stock that could be spent on growth, and perishables punish overbuying directly. One week of buffer covers a delayed delivery or a surprise order, which are the two events that actually happen.
When a material is below its point, the question is never whether to order, only how much. Order up to a target level, typically the reorder point plus two or three weeks of usage, so you are not placing the same order again on Friday.
For information and estimates only. Makeable's formulas, batch limits and margin calculations are mathematical estimates based on your inputs. They are not certified accounting, financial, pricing or tax advice. You are solely responsible for setting your own wholesale and retail prices, ensuring profitability, and checking cost calculations before committing money.
Common questions
What is the reorder point formula?
Reorder point equals average daily usage multiplied by supplier lead time in days, plus a safety buffer. For small producers, one week of usage is a sensible buffer. Example: 0.41 kg per day, six day lead time, 2.9 kg buffer gives a reorder point of 5.4 kg.
How much safety stock should a small maker keep?
About one week of usage for most materials. That covers a late delivery or one unexpectedly large order. Perishables may need less, long-lead imported materials may need two weeks. More than that ties up cash without buying meaningful extra safety.
How do reorder points handle seasonal spikes?
Keep two sets of usage figures, peak and off-peak, and switch the reorder points when the season turns. A single year-round average guarantees overstock in the quiet months and stockouts in the busy ones.
