The Reorder Point Formula Behind an Amazon FBA Side Business

Sat, 03 Oct 2026 15:42:43 +0000

A lot of developers here have thought about selling a physical product on the side, and the part that decides whether it works looks a lot like capacity planning. Here is the inventory math Amazon FBA sellers run, written the way we would write it for a system.

The Inputs: Velocity and Lead Time

Daily sales velocity comes from your 30, 60 and 90 day averages. The 30 day number drives short term reorders, the 90 day number drives longer planning, and if sales are trending up you weight the 30 day number more heavily.

Lead time is the stack of everything between placing an order and units going on sale. For a private label product from China that is production (15 to 30 days), sea freight (25 to 35 days), customs (2 to 5), Amazon check in (5 to 14) and a delay buffer (7 to 10), often 55 to 95 days in total. Domestic wholesale is much shorter, about 12 to 27 days.

The Formula

Reorder point = daily velocity x (lead time + safety stock days). At 15 units a day, a 75 day lead time and a 10 day buffer, that is 15 x (75 + 10) = 1,275 units. When stock at Amazon drops to 1,275, the next order goes in.

Reorder quantity targets 60 to 90 days of coverage, so 75 days at 15 a day is 1,125 units. Then adjust for supplier minimums and price breaks, since 1,500 units at $4.20 can beat 1,000 at $4.80. The Amazon FBA inventory management guide walks through each step.

The Two Failure Modes

A stockout makes the listing inactive, pauses ads, and starts eroding organic rank within 24 to 48 hours. A 7 day stockout can take 3 to 4 weeks to recover from.

Overstock fails slowly instead. Storage is $0.56 per cubic foot most of the year and $2.40 from October through December, and units older than 181 days add an aged inventory surcharge. Amazon also scores you on this with an IPI from 0 to 1000, and below 400 it limits how much you can store.

The Takeaway

Treat it like a monitored system. Recompute velocity monthly, check levels twice a week, and pad Amazon's own Restock tool, which tends to underestimate international lead times. The complete Amazon FBA guide covers sourcing, listings and fees around this math.

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The Reorder Point Formula Behind an Amazon FBA Side Business

The Inputs: Velocity and Lead Time

The Formula

The Two Failure Modes

The Takeaway