Inventory Forecasting for Shopify: Never Run Out of Stock Again

The Three Numbers You Need

1. Sales Velocity (Units Per Day)

Pull your last 30–90 days of sales data from Shopify Analytics. Divide total units sold by the number of days.

Example: Sold 450 units of Product X in the last 90 days. Sales velocity = 450 ÷ 90 = 5 units/day.

Use 90 days for stable products with consistent demand. Use 30 days for trending or seasonal products where recent data is more relevant.

Important: Calculate velocity per variant, not just per product. "Black / Medium" might sell 3x faster than "White / XL." Forecasting at the product level hides these differences.

2. Lead Time (Days from Order to Received)

Lead time includes everything from placing a purchase order to having sellable inventory on your shelves:

Domestic suppliers: 7–14 days typical lead time.

Chinese manufacturers: 30–45 days typical lead time (production + ocean freight).

AliExpress dropshipping: 10–21 days (already factored into delivery time).

Always use the worst-case lead time for forecasting. If your supplier usually delivers in 14 days but occasionally takes 21, use 21.

3. Safety Stock (Buffer)

Safety stock protects against two things: demand spikes (you sell faster than expected) and supply delays (your supplier ships late).

Simple formula: Safety Stock = Daily Sales Velocity × Buffer Days

Buffer days depends on your risk tolerance:

• Conservative: 14 days (safe for most situations)
• Moderate: 7 days (good balance for reliable suppliers)
• Aggressive: 3 days (only with very reliable supply and stable demand)

Example: 5 units/day × 7 buffer days = 35 units of safety stock.

The Reorder Point Formula

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

Putting it together:

• Sales velocity: 5 units/day
• Lead time: 21 days
• Safety stock: 35 units (7 days buffer)
• Reorder point: (5 × 21) + 35 = 140 units

When your inventory for this product/variant drops to 140, place a purchase order. You'll sell approximately 105 units during the 21-day wait for new stock, leaving your 35-unit safety buffer intact.

Economic Order Quantity (How Much to Reorder)

Knowing when to reorder is half the equation. How much to order balances two costs:

Ordering costs: Shipping, handling, and the time to process a purchase order. Fewer, larger orders reduce per-unit ordering costs.

Carrying costs: Storage, insurance, and cash tied up in inventory. More inventory = more carrying cost.

Simplified EOQ for small stores:

Order enough to cover your expected sales until the next reorder cycle, plus safety stock:

Order Quantity = (Daily Velocity × Days Until Next Order) + Safety Stock - Current Inventory

If you want to order monthly (30-day cycle):

• Order quantity: (5 × 30) + 35 - 140 = 45 units

But if your current inventory is already at the reorder point (140), and lead time is 21 days:

• Order quantity: (5 × 30) + 35 = 185 units (covers 30 days plus safety stock)

Pro tip: Round up to the nearest supplier minimum or volume discount threshold. If ordering 185 units but 200 gets you a 5% discount, order 200.

Seasonal Demand Forecasting

Flat demand projections don't work for seasonal businesses. Adjust for known patterns:

Step 1: Pull monthly sales data for the last 12 months (or longer if available).

Step 2: Calculate a seasonal index for each month:

Monthly Index = (Month's Sales ÷ Average Monthly Sales) × 100

If your average monthly sales are 100 units and November typically does 180, November's index is 180.

Step 3: Apply the index to your base forecast.

If your base daily velocity is 5/day and November's index is 180:

• November adjusted velocity: 5 × (180/100) = 9 units/day

Step 4: Recalculate reorder points for peak months using the adjusted velocity.

Common seasonal peaks:

• November–December: Holiday shopping (most categories)
• January–February: Fitness, wellness, organization products
• May–June: Outdoor, wedding, summer products
• August–September: Back-to-school

Order for peak seasons 45–60 days early to account for lead time and potential supplier delays during their busy period.

Inventory Forecasting with Marketing Campaigns

Running a big promotion? Factor it into your forecast:

Discount sale (20% off): Expect 40–80% increase in daily velocity during the promotion period.

Influencer feature: Expect 200–500% spike for 2–3 days, then gradual decline over 1–2 weeks.

Facebook/TikTok viral moment: Unpredictable but can 10x daily sales for 1–7 days. Keep safety stock higher for products with viral potential.

New product launch: No historical data. Use a conservative estimate based on your email list response rate, social engagement, and ad budget.

Pre-order with supplier: For planned campaigns, place a preemptive purchase order 30–45 days before the promotion starts. Having extra stock is cheaper than missing sales during a paid campaign.

Tools for Shopify Inventory Forecasting

Shopify Reports (built-in): Analytics > Reports > Inventory shows current stock, days of inventory remaining, and sell-through rates. Basic but functional.

Stocky (free with Shopify POS Pro): Demand forecasting based on sales history, seasonal adjustments, and automated purchase order suggestions.

Inventory Planner ($99+/month): Purpose-built forecasting for Shopify. Predicts demand per variant, generates purchase orders, and accounts for lead times and seasonal patterns.

Spreadsheets: For stores with fewer than 50 SKUs, a Google Sheet with sales velocity, lead time, and reorder point formulas works well. More manual but zero cost.

Common Forecasting Mistakes