Fulfillment Cost Analyzer
In-House vs 3PL vs FBA. Calculate the break-even volume where outsourcing fulfillment becomes cheaper than doing it yourself.
In-House Costs (Monthly)
3PL / Provider Costs
Total Cost Curves
Cost Crossover
Switch Point: ~10,000 units
Low Volume (<500)
In-House is usually cheaper (if you don't pay yourself). 3PLs have minimums.
The Gap
At 2000 units, the difference is $4,000 per month.
Variable Efficiency
In-House has better variable economics. You only outsource for flexibility.
Execution Steps
Enter In-House Fixed Costs (Rent, Labor) and Variable Shipping Rate.
Enter 3PL/FBA Variable Costs (Pick & Pack, Storage, Shipping Rate).
The chart shows the Total Cost curve as volume increases.
Identify the crossover point where outsourcing saves money.
Pro Strategy
- If you ship <500 orders/mo, in-house is often cheapest if you ignore the value of your own time.
- At >1000 orders/mo, 3PL shipping discounts usually outweigh the pick & pack fees.
- Use FBA for Amazon orders (Prime badge) and a 3PL or In-House for Shopify orders (Brand control).
Core Concepts
Fixed vs Variable
In-house fulfillment has high fixed costs (warehouse lease, staff). Outsourcing converts these into variable costs (pay per order), reducing risk for small volumes.
Shipping Arbitrage
3PLs and Amazon negotiate massive volume discounts with carriers. Their shipping rate is often 30-50% lower than what a small merchant can get.
Opportunity Cost
Time spent packing boxes is time not spent on marketing or product development. This calculator focuses on hard costs, but the soft cost saving is often the real driver.
What is Fulfillment Cost Analyzer?
This tool performs a Break-Even Analysis on operational models. It contrasts a High Fixed/Low Variable model (In-House) against a Low Fixed/High Variable model (Outsourced). Note: In reality, 3PLs often have lower variable shipping rates, making them superior at scale too.
Best For
- • Outgrowing your garage/office.
- • Evaluating a 3PL contract proposal.
- • Deciding whether to renew a warehouse lease.
Limitations
- • Assumes constant labor cost (no overtime).
- • Ignores 3PL onboarding/setup fees.
- • Simplified storage calculation.
Alternative Methods
Amazon FBA Calc
Specific deep dive into Amazon fees.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Subscription Box
Packing 5000 boxes took the team 3 days/month.
Switched to 3PL.