Buffer stock and reorder points: what they are and why they matter

Running out of stock means lost sales. But holding too much stock ties up cash and eats into margins. Buffer stock and reorder points help you find the balance.

What's the difference?

Buffer stock (also called safety stock) is your cushion. It's extra inventory you keep on hand to protect against unexpected demand spikes or supplier delays. Think of it as insurance against stockouts.

Reorder point is your trigger. When inventory drops to this level, it's time to order more. The reorder point accounts for supplier lead time—so new stock arrives before you run out.

They work together: the reorder point triggers the order, the buffer stock protects you while you wait for it to arrive.

The manual way

Traditionally, you'd calculate these yourself:

• Look at average daily sales
• Factor in supplier lead time
• Add a buffer based on how much demand varies
• Set a reorder point that covers lead time plus buffer

This works, but it's tedious. And if demand patterns change, your numbers are wrong until you recalculate.

How Stockpilot automates this

Stockpilot calculates buffer stock and reorder thresholds automatically based on your actual sales data and demand forecasting.

The system looks at sales patterns, accounts for variability (standard deviation), and uses AI to forecast demand. From there, it calculates appropriate buffer levels and triggers automatic purchase order suggestions when stock drops to the threshold.

You review and approve the PO—or let it run automatically. Either way, you're not manually tracking every SKU to figure out when to reorder.

Why this matters

Without buffer stock, one demand spike or one late shipment means stockouts. On marketplaces like Amazon and bol.com, stockouts don't just lose sales—they hurt your ranking.

Without proper reorder points, you're either ordering too early (tying up cash) or too late (risking stockouts).

Automating both means your replenishment runs on data, not guesswork. You stay in stock without overbuying.