How Much to Reorder and When?

This has been covered off by Robert in Facebook and on a Webinar (link above).

The Facebook information is shown below…

Reading the Signs of a Selling Product.

Ever wonder, when is it the right time to place the next order for your product(s)? Well, it is all down to a number of factors - and guess what? Weirdly, it could be after your first sale.

Now that sounds a little crazy, but actually it’s not.

Imagine that you had a lead time of 120 days (time it takes from you placing the order to receiving the order into Amazon’s shelves - generally around the 120 day mark, would you believe it?).

Lead time - 120 days.

And you purchased 120 units.

And you sold 1 unit on day 1. Technically speaking, you would have to re-order immediately in order to not run out of stock - obviously, if your current sales trend kept to 1 a day. Of course, if it went down, you would have an over stock, or if it went up, an under stock, situation.

Now, of course we would not be running anything so knee-jerk style, and we always want to try and ascertain a product's run rate. However, in the early period, that may be tricky, as it may very well not have “finished” growing.

But really the simple mathematics here is, how many units do I sell in the same time period as my lead time? This becomes the order (obviously, you want to add in a little buffer). Therefore, technically speaking, the time you receive your order is the exact time you place the next order.

The last piece of the puzzle is that eventually, when you have rolling stock, is to calculate what your stock level would be at the point in time that you receive the next order, and deduct that from it.