Direct answer: Days of cover = Units on hand ÷ Average daily sales. A healthy target is more than your lead time plus your safety-stock buffer.
This guide shows how to use days of cover to decide when to reorder, spot inventory risk, and free up cash tied to slow SKUs.
Who this is for
Shopify, Amazon, and Etsy sellers who reorder from overseas suppliers with lead times of 2–8 weeks and want a simple daily indicator of inventory risk.
The formula
Days of cover = On-hand units ÷ Avg daily sales
Reorder pressure = Days of cover − (Lead time + Safety stock). When this goes negative, you are already inside your reorder window.
Step-by-step
- Pull on-hand units per SKU from your warehouse or FBA report.
- Compute a 28-day rolling average of daily sales.
- Enter your supplier's realistic lead time (not the best-case time).
- Add a safety-stock buffer covering promotions and shipping delays.
- Sort SKUs by reorder pressure ascending — the top rows need action first.
Illustrative table
| SKU | On hand | Daily sales | Days of cover | Reorder in |
|---|---|---|---|---|
| A-1 | 420 | 18 | 23.3 | −7.7 (order now) |
| B-2 | 1,200 | 15 | 80 | 49 days |
| C-3 | 60 | 3 | 20 | −11 days |
Example calculation (USD)
SKU A-1: 420 units on hand, 18 units/day sales. Days of cover = 23.3. Lead time is 21 days plus 10 days safety, so reorder pressure = 23.3 − 31 = −7.7 days. This SKU is already late for reorder — expedite the PO or arrange air freight for a top-up.
Common mistakes to avoid
- Using a 90-day sales average for fast movers — recent trends dominate.
- Not adjusting for promotional lifts (a BFCM week distorts daily average).
- Assuming best-case lead time from the supplier.
- Ignoring pack size — you can only reorder in supplier MOQs.
Best practices
- Run days of cover weekly for top SKUs and monthly for the long tail.
- Automate a low-pressure alert via a simple sheet or app.
- Pair with a reorder point calculator for a hard trigger.
Frequently asked questions
What sales window is best?
A 28-day rolling average balances noise and trend for most SKUs.
How is this different from inventory turnover?
Turnover is annual; days of cover is a real-time snapshot.