The Two Inventory Disasters
Stockout — You run out of stock. Rank drops immediately. Rebuilding organic rank after a stockout takes 2–8 weeks and costs thousands in PPC.
Overstock — Too much inventory at FBA. You pay long-term storage fees, and your ROI sinks while capital is tied up.
The Reorder Point Formula
Reorder Point = (Average Daily Sales × Lead Time) + Safety Stock
Where:
- Average Daily Sales = Units sold last 30 days ÷ 30
- Lead Time = Manufacturing days + shipping to FBA + FBA receiving time (typically 45–60 days for China)
- Safety Stock = Average Daily Sales × (Lead Time Variability in days)
Example Calculation
- Daily sales: 15 units
- Total lead time: 50 days
- Safety stock (10-day buffer): 150 units
- Reorder Point = (15 × 50) + 150 = 900 units
When your FBA inventory hits 900 units, place your next production order.
Setting Up niche.ltd's Inventory Manager
- Go to Inventory Manager
- Connect SP-API for live sales and stock data
- Enter your supplier lead time for each SKU
- Set your safety stock preference (conservative = 14 days, aggressive = 7 days)
- Enable Restock Alerts — get email when any SKU hits its reorder point
Q4 Inventory Planning
Increase safety stock to 30+ days in September before Q4. Amazon receiving times slow dramatically in October–November.