Replenishment rules decide when you reorder, how much you buy and which SKUs get cash first. Good rules protect sales and margin. Bad rules create stockouts, overstock, rushed freight and meetings where everyone points gently at the spreadsheet.
Step 1: define the SKU group
Do not use one rule for every product. Segment SKUs by marketplace, demand pattern, margin and supplier lead time.
- Hero SKUs High demand and high ranking risk if stock runs out.
- Margin builders Moderate demand but strong contribution margin.
- Volatile SKUs Creator, promo or seasonality-driven demand.
- Clearance SKUs Low margin or overstock risk.
Step 2: calculate daily sales velocity
Use kept units, not only shipped units, when returns are meaningful.
daily_sales_velocity = kept_units_last_30_days / 30
stock_cover_days = available_units / daily_sales_velocityStep 3: add lead time and safety stock
Your reorder point should cover supplier lead time plus a buffer for demand volatility.
reorder_point = (daily_sales_velocity * supplier_lead_time_days) + safety_stock_unitsStep 4: add contribution margin priority
When cash is limited, reorder the SKUs that protect the most contribution margin first.
margin_at_risk = daily_sales_velocity * contribution_margin_per_unit * stockout_days_riskStep 5: overlay advertising and promotions
If campaigns are planned, raise expected velocity before setting the order quantity. Use conservative uplift unless historical data proves otherwise.
forecast_velocity = base_velocity * (1 + planned_campaign_uplift)Step 6: set action rules
| Condition | Action |
|---|---|
| Stock cover below lead time + buffer | Reorder now |
| High stockout risk + high margin | Prioritize cash and protect ad spend |
| Low margin + high stock | Reduce ads, test price or clear carefully |
| Campaign planned + low stock | Delay campaign or expedite replenishment |
| High returns | Lower forecast using kept-unit velocity |
Common pitfalls
- Using revenue instead of units and contribution margin.
- Ignoring marketplace ads that will change demand next week.
- Forecasting shipped units when returns are high.
- Letting MOQ force overstock on weak-margin SKUs.
- Keeping ads live while stock cover is below the lead-time buffer.
What to check before you trust the rule
- Does the rule use current available stock, not stale inventory?
- Are returns deducted from demand quality?
- Are ad plans, creator pushes and deals included?
- Does the rule show cash required and margin at risk?
- Can the team override with a reason and review the outcome?
How FiveX helps
FiveX brings marketplace analytics, profitability, advertising, repricing, stock replenishment and forecasting signals together so replenishment rules become operating decisions, not spreadsheet folklore.
FAQ
What is a replenishment rule?
A rule that defines when to reorder, how much to buy and which SKUs should receive inventory cash first.
What is the best reorder point formula?
A practical starting point is daily sales velocity multiplied by supplier lead time, plus safety stock.
Should margin affect replenishment?
Yes. When cash is limited, prioritize products with strong contribution margin and high stockout risk.
How do ads affect reorder rules?
Planned campaigns can increase demand, so stock rules should include expected uplift and stockout risk.
Can FiveX automate this?
FiveX can centralize the signals and recommendations teams need to run replenishment rules from live marketplace data.