What Is Days of Supply? How to Calculate and Use It

Days of supply (DOS) is an inventory metric that tells you how many days your current stock will last based on your average daily sales rate. It's a straightforward calculation — divide units on hand by units sold per day — but it's one of the most actionable numbers in inventory management for any product-based business.

If you're running a Shopify store and you've ever been caught off guard by a stockout, days of supply is the metric that would have warned you it was coming.

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How to Calculate Days of Supply

The formula is simple:

Days of Supply = Units On Hand ÷ Average Daily Sales

So if you have 300 units of a product in stock and you're selling 15 units per day on average, your days of supply is 20 days.

That means in 20 days, you'll hit zero — assuming sales hold steady.

Choosing the right sales window

The trickiest part isn't the math, it's picking the right average. You have a few options:

• Last 7 days: Responsive to recent spikes or slowdowns, but noisy. A promo week will distort this badly.
• Last 30 days: A solid default for most stores. Smooths out weekly variance while staying reasonably current.
• Last 90 days: Better for seasonal products where you want to capture a full sales cycle trend.

For most DTC brands without heavy seasonality, a 30-day rolling average is the right starting point. If you're running regular promotions or have strong seasonal swings, segment your calculation accordingly — or at minimum, know that your number will be off during those periods.

A worked example

Let's say you sell a skincare serum. Here's your data:

• Units in stock: 450
• Sales in the last 30 days: 270 units
• Average daily sales: 270 ÷ 30 = 9 units/day
• Days of supply: 450 ÷ 9 = 50 days

You've got about 50 days of runway. Now the useful question: is that enough? That depends entirely on your supplier lead time and how much buffer you want to carry.

If your supplier takes 14 days to deliver, you should be reordering when you hit around 20–25 days of supply (14 days lead time + a few days of safety buffer). At 50 days, you've got time — but you should have a reorder trigger set.

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Days of Supply vs. Days on Hand: Is There a Difference?

These terms are often used interchangeably, and in most ecommerce contexts, they mean the same thing: how many days your current inventory will cover based on recent demand.

Some supply chain literature draws a distinction — "days of supply" sometimes refers to pipeline inventory (in transit + on hand), while "days on hand" is strictly what's physically available. For a typical single-location Shopify store, this distinction doesn't matter much. If you're managing inbound purchase orders separately, you'd want to be clear about whether your calculation includes incoming stock or not.

The honest answer: use whatever term your team uses, just be consistent in how you calculate it.

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Why Days of Supply Matters More Than Just "Stock Level"

Raw stock numbers are misleading without context. "500 units in stock" sounds healthy. But if you're selling 200 units a day, that's 2.5 days of supply — you're in trouble. If you're selling 5 units a day, that's 100 days — you might be tying up too much cash.

Days of supply gives you velocity-adjusted visibility. It answers the question that actually matters: when will I run out?

This is why it's one of the core metrics Alertr tracks for every SKU — because a low stock alert based purely on unit count will fire too early for slow movers and too late for fast movers. Tying alerts to days of supply means you get warned at the right time, regardless of how quickly or slowly a product moves.

The cost of getting it wrong in both directions

Too low: You stock out. Lost sales, frustrated customers, potentially lost rankings on Google Shopping or Shopify search if you're delisted. For subscription products or bundles, a single SKU stockout can kill an entire order.

Too high: You've got capital sitting in a warehouse. For a brand doing $500K/year in revenue, shaving even 10 days of unnecessary inventory across your catalog can free up tens of thousands in working capital. That's not theoretical — it's the math behind why enterprise retailers obsess over this metric.

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What's a Good Days of Supply Number?

There's no universal answer, but here are practical benchmarks:

Situation	Target DOS
Fast-moving SKUs (daily sellers)	14–30 days
Medium-velocity products	30–60 days
Slow movers / long lead time suppliers	60–90 days
Seasonal peak prep	2–4x normal DOS

The right number for your store is: lead time + safety stock buffer. If your supplier takes 21 days to ship and you want 7 days of cushion, your reorder point should trigger at 28 days of supply remaining.

Anything above that is excess. Anything below is a stockout waiting to happen.

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How to Use Days of Supply to Set Reorder Points

This is where the metric goes from interesting to operational. Here's a step-by-step process for turning days of supply into reorder triggers:

Step 1: Calculate your average daily sales per SKU Pull 30 days of sales data. Divide by 30. Do this for every product you care about.

Step 2: Get your supplier lead times Talk to your suppliers and get realistic numbers — not the best-case scenario. If they say "10–14 days," use 14.

Step 3: Decide on your safety buffer A 5–7 day buffer is reasonable for most Shopify brands. Higher if demand is volatile, lower if your supplier is highly reliable.

Step 4: Calculate your reorder point in units

Reorder Point = (Lead Time + Safety Buffer) × Average Daily Sales

Using our serum example: (14 + 7) × 9 = 189 units

When you hit 189 units, place a purchase order.

Step 5: Set an alert The manual version of this is a spreadsheet you update weekly. The less painful version is an app that tracks sell rate and fires an alert when you cross that threshold. Alertr does exactly this — it monitors days of stock remaining for each SKU and sends alerts to email or Slack when you're approaching your reorder point.

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How to Calculate Days of Supply in Excel (or Google Sheets)

If you want to run this manually, here's the setup:

Column A	Column B	Column C	Column D
SKU	Units on Hand	Sales (Last 30 Days)	Days of Supply

In column D, your formula is:

=A2/(C2/30)

Or more explicitly:

=B2/(C2/30)

This divides units on hand by the average daily sales rate. Format column D as a number with no decimal, or round to one decimal place.

Add conditional formatting to highlight anything under 30 days in yellow and under 14 days in red. That's a basic but functional early warning system.

The limitation of the spreadsheet approach is that you have to update it. If you're doing it manually, most merchants fall behind within a few weeks — especially during busy periods when monitoring actually matters most.

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Days of Supply as an Inventory KPI

In larger operations, days of supply is tracked as a KPI at the company level — the average DOS across all SKUs. This gives finance and ops a single number to optimize: too high means excess working capital tied up in stock, too low means you're running lean and risking stockouts.

For most DTC brands with 100–2,000 SKUs, tracking this at the SKU level is more immediately useful than a blended average. Your blended DOS might look fine while three of your top-10 SKUs are about to stock out.

The SKU-level view is where the real work happens.

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The Bottom Line

Days of supply is a simple metric with significant operational impact. Once you start tracking it per SKU — and setting reorder triggers based on it — you stop reacting to stockouts and start preventing them.

The formula won't change: units on hand divided by daily sales rate. What changes is how consistently and automatically you apply it.

If you're managing inventory in Shopify and want to see days of supply tracked automatically for every SKU, Alertr calculates this in real time and sends low stock alerts to email or Slack when you're approaching your reorder point. There's a free tier that covers up to 50 SKUs — worth setting up before your next stockout, not after.

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