Inventory Forecasting for Small Brands: The Math You Actually Need

Most inventory advice online is written for brands with ten people in operations. If you're a founder with a Shopify store and a spreadsheet, you don't need a demand-planning platform. You need a model simple enough to actually update every Monday.

The three numbers that matter

1. Velocity: units sold per day, averaged over the last 30 days.
2. Lead time: days between placing a reorder and receiving it.
3. Safety stock: extra units to cover demand spikes and supplier delays.

Reorder point in one formula

Reorder Point = (Velocity × Lead Time) + Safety Stock.

Example: you sell 8 units a day, your supplier takes 45 days, and you keep two weeks of safety stock (112 units). Your reorder point is (8 × 45) + 112 = 472. When on-hand inventory drops to 472, you place the next order. That's it.

How to set safety stock without spreadsheets

The textbook formula for safety stock involves standard deviation. You don't need it. Use these rules of thumb:

• Stable demand, reliable supplier: 1–2 weeks of velocity.
• Seasonal product or single-source supplier: 3–4 weeks.
• Brand new product with no history: order small, reorder fast.

Velocity is a moving target

30-day velocity is a starting point, not a fixed number. Recalculate weekly. If you ran a sale last week, your 30-day velocity is inflated — back the sale out before forecasting. If you launched a new product, the first month is noise; use 7-day velocity until you have a real sample.

The two failure modes

There are exactly two ways inventory forecasting goes wrong, and they have different cures.

Stockouts

Usually a lead time problem, not a velocity problem. Founders trust the supplier's quoted lead time. Always add a buffer. If your supplier says 30 days, plan for 45. If they say 60, plan for 75.

Dead stock

Usually a SKU-mix problem. You forecasted total units correctly but ordered the wrong ratio of variants. Track velocity per SKU, not per product. The colorway that sold 70% of last quarter's units doesn't deserve 33% of next quarter's order.

The Monday ritual

Block 20 minutes every Monday. Pull last week's units sold per SKU. Update velocity. Compare on-hand to reorder point. Place orders. Done. Brands that do this consistently rarely have inventory crises. Brands that do it 'when they remember' have one every quarter.

When to graduate to software

If you're managing more than 50 active SKUs, or if your supplier lead times vary widely, a tool earns its keep. Below that, a Google Sheet is faster, cheaper, and forces you to actually understand the numbers — which is the whole point.