Updated March 2026
Safety Stock Calculator for Ecommerce
Safety stock is the buffer inventory you keep to protect against unexpected demand spikes or supplier delays. Too little and you risk stockouts. Too much and you tie up cash in unsold inventory. This calculator helps you find the right amount.
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Tip: estimate as 20-30% of your average daily sales if unsure
The Formula
Safety Stock = Z × σd × √L
Worked Example
You sell candles on Shopify. One SKU averages 10 units/day with a standard deviation of 3 units. Your supplier takes 14 days to deliver. You want 95% confidence you won't stock out.
Safety Stock = 1.65 × 3 × √14 = 1.65 × 3 × 3.74 = 18.52 → round up to 19 units. You should keep at least 19 units of this candle as buffer stock.
Service Level Reference
| Service Level | Z-Score | Best For |
|---|---|---|
| 90% | 1.28 | Acceptable for slow movers |
| 95% | 1.65 | Standard for most SKUs |
| 97.5% | 1.96 | Important products |
| 99% | 2.33 | Critical / hero products |
Tips for Shopify Merchants
- ✓ Start with 95% service level for most SKUs. Only go higher for hero products that drive most of your revenue.
- ✓ If you don't know your demand standard deviation, estimate it as 20-30% of your average daily sales.
- ✓ Recalculate quarterly — seasonal products need different safety stock levels in Q4 vs Q1.
- ✓ Safety stock ties up cash. For slow movers (< 1 unit/day), consider accepting a lower service level.
Skip the Spreadsheet
Alertr calculates sell rates, days of stock, and reorder quantities automatically from your Shopify data. No formulas, no manual updates — just daily alerts when it's time to reorder.
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Frequently Asked Questions
What is safety stock?
Safety stock is extra inventory held as a buffer against demand variability and supply chain delays. It prevents stockouts when actual demand exceeds your forecast or when suppliers deliver late.
How much safety stock should I carry?
It depends on three factors: how much your daily sales vary, how long your supplier takes to deliver, and how important it is to never stock out on that product. Use the calculator above to find the right number for each SKU.
Is safety stock the same as reorder point?
No. Safety stock is the buffer you keep. Reorder point is when to place a new order — it equals (average daily demand × lead time) + safety stock. Safety stock is one component of the reorder point calculation.
How do I calculate standard deviation of demand?
Look at your daily sales for the past 30-90 days. Calculate the average, then calculate how much each day deviates from that average. Most spreadsheet tools have a STDEV function. In Alertr, sell rate variance is calculated automatically from your Shopify order data.
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