Build vs. Rent ROI Calculator
Financial calculation tool for evaluating whether to build first fulfillment center or continue using 3PL providers.
Financial calculation tool for evaluating whether to build first fulfillment center or continue using 3PL providers.
When to Use Build vs. Rent ROI Calculator
Use when 3PL costs exceed $5M/year, order concentration is 60%+ in one region, and volume exceeds 1,000 orders/day for 6+ months.
How to Apply
Calculate Current 3PL Costs
Annual order volume × 3PL cost per order (typically $4-8/order) = Annual 3PL cost
Outputs
- Annual 3PL spend
Estimate Owned Facility Costs
Sum: Facility lease + equipment ($500K-2M/year) + Labor 20-50 people ($800K-2M/year) + Operating costs ($200K-500K/year) = Total annual cost. Divide by annual orders = Cost per order (owned).
Outputs
- Annual owned cost
- Cost per order
Calculate ROI
Savings per order = 3PL cost - Owned cost. Annual savings = Savings per order × Annual volume. Payback period = Upfront investment / Annual savings.
Outputs
- Payback period in years
Make Decision
Build if payback <3 years AND order volume stable/growing. Stay with 3PL if payback >4 years OR order volume uncertain.
Outputs
- Build/rent recommendation