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I sell the same product on my own store and on Noon from one shared stock: how do I calculate the reorder point?

Add the average daily sales from both channels and enter the total as a single daily demand, because both draw on one stock pile. Calculating each channel on its own gives a point far below how fast the stock really runs down. If one channel holds part of your stock in its own warehouse, that part is separate stock needing its own calculation with its own lead time.

Published · 3 min read

The shelf does not care where the order came from

An order from your own store and an order from Noon both take a unit off the same shelf. Stock falls by what both channels sell together, not by what one of them sells, so the reorder point has to be built on the total. It sounds obvious, but many sellers start with their own store, work out the point for it, then add a second channel and forget to update the figure.

Example: 14 a day from your store, 9 from Noon

You sell 14 units a day through your own store and 9 through Noon, both shipped from your warehouse. The lead time is 10 days and safety stock 50 units.

Worked example

On store sales alone: 14 × 10 = 140, reorder point 140 + 50 = 190 units.

On both channels together, 23 a day: 23 × 10 = 230, reorder point 230 + 50 = 280 units.

The gap is 90 units, Noon's sales over the ten-day wait.

Stay at 190 and you will sell 230 units during the wait, forty more than everything you have, so the product sells out on both channels before the goods arrive, even if the supplier is on time.

When part of your stock sits with the marketplace

Some marketplaces let you send part of your stock to their own warehouse and ship it for you. That stock is no longer on your shelf, and your own store cannot sell from it. You then have two stock piles:

  • Stock in your warehouse: its daily demand is your store's sales, plus any channel that ships from it.
  • Stock in the marketplace's warehouse: its daily demand is that marketplace's sales alone, and its lead time includes supplier time plus preparing, shipping and check-in at the marketplace.
  • Work out each pile's point in a separate run, because the calculator handles one stock pile per calculation.

The steps

  1. Establish which stock each channel actually ships from.
  2. For each stock pile, add up the average daily sales of every channel that draws on it, over in-stock days.
  3. Enter the total, the lead time and the safety stock in the Inventory reorder-point calculator.
  4. Compare the point with the stock in that location plus anything on its way there.
  5. When you order, prepare the purchase order with the Purchase-order generator, and if you are sending some to the marketplace's warehouse, prepare that shipment's packing list with the Packing-list generator.

Common questions

Noon sales swing more than my store's. Does that matter?

Yes, for safety stock. The calculator assumes steady daily sales, so if one channel is very uneven, allow for it when choosing safety stock, or use the maximums option with the highest combined day across both channels.

Should I reserve a quantity for each channel from the shared stock?

That is an operational decision outside what the tool calculates. If you do reserve separate quantities, you are in effect running two stock piles, so give each its own point.