Reorder Levels and Dead Stock: Buy What Sells, Clear What Doesn’t

Two problems hurt almost every shop at the same time: the items customers ask for are out of stock, and the shelves are full of items nobody buys. Both come from buying by memory. Reorder levels and a dead-stock check fix them with numbers you already have.

Reorder level and reorder quantity

• Reorder level: when stock falls to this number, it is time to buy.
• Reorder quantity: how much to buy when that happens.

A simple way to set them:

Reorder level = average daily sales × days your supplier takes to deliver + a small safety buffer

If you sell 4 pieces a day, the supplier takes 5 days, and you keep 2 days of buffer: 4 × (5 + 2) = 28. When stock reaches 28, order.

Reorder quantity is usually what you sell in the time between two orders. If you order every two weeks: 4 × 14 = 56.

You don't need perfect numbers on day one. Start with your best guess for your top 50 items and adjust monthly.

The reorder list

In OneLedger Inventory, set reorder level and quantity on each item (or in bulk for a category). The Low Stock / Reorder List report then shows every item at or below its level — with a suggested quantity to buy. Run it for each branch; a store's list may be filled by transfer from the godown instead of a new purchase.

The dashboard also shows low-stock items, so nobody has to remember to look.

Fast-moving items

The Fast-moving Items report ranks items by sales and shows days of stock left at the current selling rate. An item with 3 days left and a 7-day supplier is already late. Check this list before placing any big order.

Dead stock: the silent cost

Dead stock is anything that hasn't sold for a long time — 90 days is a common cut-off, but it depends on your trade. It costs you:

• Cash that could buy items that do sell,
• Space on the best shelves,
• Value, as fashion goes out of season or goods near expiry.

The Dead Stock (no sale) report lists items with stock but no sales in the period you choose, with their stock value at cost.

What to do with dead stock

1. Move it. Put it near the counter or in a combo with a fast item.
2. Discount it. A small loss now beats a bigger one later. Use the bulk price change for a whole category.
3. Return it. Ask the supplier — many accept returns or exchanges.
4. Transfer it. Another branch may sell it better.
5. Write it off if it is damaged or expired, with the right reason.

Then stop buying it. Set its reorder level to zero.

A monthly 30-minute routine

1. Run the reorder list — place orders.
2. Run fast-moving items — raise reorder levels where days-left is always short.
3. Run dead stock — pick 10 items to clear this month.
4. Look at stock valuation — is total stock value going up faster than sales?

FAQ

Should every item have a reorder level? Start with your top sellers and high-value items. Leave one-off or seasonal items at zero.

Does the reorder list consider stock in other branches? Run it per branch or for all branches together, and decide between buying and transferring.

What counts as a sale for dead stock? Any finalised sales bill in the selected period and branch.