3PL vs in-house cost calculator
A 3PL costs less than fulfilling in-house when its pick, storage, packaging and account fees add up to less than your own rent, staff time, packaging and software for the same orders. Add up each side for a month and divide by monthly orders to compare cost per order. The break-even volume is the gap in fixed monthly costs divided by the gap in cost per order.
Example values, replace them with yours. Postage is left out because you pay it either way.
$3,138a month
less with the 3PL than in-house, at 1,500 orders a month.
In-house costs $9,900 a month ($6.60 an order). The 3PL costs $6,763 ($4.51 an order).
Break-even is about 8,600 orders a month. Below that the 3PL costs less; above it, in-house does.
What goes into each side
| Cost | In-house | 3PL |
|---|---|---|
| Space | $4,000 | $800 |
| Labor | $4,400 | $5,063 |
| Packaging | $900 | $900 |
| Software and fees | $600 | $0 |
| Total | $9,900 | $6,763 |
| Per order | $6.60 | $4.51 |
In-house, space is the rent for the room you pack and store in, and labor is every hour someone spends receiving, picking, packing and handling returns. Add payroll taxes and benefits to the wage if you pay them. With a 3PL, space becomes a storage fee per pallet and labor becomes a fee per order and per extra item. Not sure how many pallets your stock fills? Work it out with the warehouse space calculator.
Postage is the same either way, so it is left out. Money tied up in the stock itself is left out too, because it doesn’t change with who ships it; the inventory carrying cost calculator works that out. To see what an outsourced setup includes, read how ecommerce fulfillment works with us.
Where the cheaper option flips
Each side has a fixed monthly cost and a cost for every order. Rent, software and storage cost the same at any volume, while pick fees, packaging and hourly staff time grow with every order. The break-even is the volume where the two totals meet.
($4,600 − $800) ÷ ($3.98 − $3.53) ≈ 8,600 orders a month
That is the gap in fixed costs divided by the gap in cost per order. Staff time grows with orders here, so your 8.8 minutes per order stay the same at every volume.
| Orders a month | In-house | 3PL | Costs less |
|---|---|---|---|
| 380 | $5,943 | $2,311 | 3PL |
| 750 | $7,250 | $3,781 | 3PL |
| 1,500 (yours) | $9,900 | $6,763 | 3PL |
| 3,000 | $15,200 | $12,725 | 3PL |
| 6,000 | $25,800 | $24,650 | 3PL |
| 12,000 | $47,000 | $48,500 | In-house |
Compare against published numbers: our pricing page lists pick, storage and bin rates by volume tier.
Common questions
How do I work out the cost of in-house fulfillment?
Add up a month of rent for the space you pack and store in, staff hours × hourly wage (include payroll taxes and benefits if you pay them), packaging per order × orders, and software, equipment and other monthly costs. Divide the total by monthly orders to get cost per order.
What does a 3PL charge for fulfillment?
A 3PL quote can include a pick fee for the first item in each order, a smaller fee for each extra item, storage per pallet or bin each month, packaging, and a monthly account fee or minimum. Enter each one from the quotes you have. Fulfillment Hub USA publishes its rates, starting at $2.85 for the first pick, $0.70 for each extra item and $34.50 per standard pallet a month; lower rates apply at higher volume tiers.
How is the break-even order volume calculated?
Break-even orders = (in-house fixed monthly cost − 3PL fixed monthly cost) ÷ (3PL cost per order − in-house cost per order). Below that volume, the side with the lower fixed cost is cheaper; above it, the side with the lower cost per order is. If the two never cross, one side is cheaper at every volume.
Why does the calculator leave out shipping postage?
You pay the carrier for every parcel whether you pack it yourself or a 3PL does, so the calculator treats postage as the same on both sides and leaves it out. If your postage would differ, add the difference per order to the packaging line on that side.
Should staff time grow with orders?
If you pay packers by the hour and add hours as orders grow, choose “grows with orders”: the calculator keeps your minutes per order the same at every volume. If you pay a fixed team whatever the volume, choose “stays fixed”. The choice changes the break-even, not your current monthly cost.
More shipping and inventory tools
Put your numbers next to a real quote.
Send your monthly orders, items per order and pallet count, and we’ll come back with an itemized fulfillment quote to set against your in-house costs.