Own warehouse or fulfillment partner: when does outsourcing pay off?
- Running your own warehouse costs more than the rent: staff, cover, packaging materials, carrier contracts, software, and your own time.
- Outsourcing makes sense when packing starts taking time away from growth, or when you also sell on a second channel (marketplace, B2B).
- When choosing a partner, look at the dispatch cut-off, itemized pricing and how fast returns are processed first.
Most online stores start packing orders at home or in a small storeroom. For a while, that's the cheapest option. Then comes the point where packing takes more time than buying or selling. This article helps you recognize where you are, and what to look for if you decide to outsource.
What does your own warehouse really cost?
Most people equate the cost of their own warehouse with the rent. The full picture is wider:
- Space: rent, utilities, shelving. Too little at peak times, partly empty the rest of the year.
- Staff: packers' wages, plus cover during holidays or sick leave.
- Packaging materials: boxes, void fill, tape. More expensive in small quantities than in bulk.
- Carrier fees: with low volumes, it's harder to get a good carrier contract, and every carrier has to be managed separately.
- Software: inventory management, label printing, connecting your online store and marketplaces.
- Your time: every hour you spend packing or reconciling stock is an hour taken from growth.
Add these up for one month and divide by your monthly order count. That's your own cost per order, the figure to compare a fulfillment partner's quote against.
Six signs it's time to outsource
- Packing takes up your day. If you spend hours a day boxing orders, that time is missing from purchasing, marketing and your customers.
- Dispatches slip. If orders received in the afternoon regularly only ship the next day, both your customers and the marketplace notice.
- Mistakes are increasing. Wrong size, wrong color, missing item: each one turns into a return and an unhappy customer.
- You're running out of space. If stock is already piling up in the corridor, you can't buy in for the next season.
- You're opening a second channel. Alongside eMAG, Allegro or B2B partners (wholesalers, retail chains), shared stock becomes hard to track by hand. eMAG and Allegro from one warehouse
- You can't handle peak season. If order volumes jump in season, your own team can only keep up with overtime or delays.
When doesn't it pay off (yet)?
Outsourcing isn't the right decision for everyone, and it's better to know that up front.
- Very few orders. Below roughly 50 orders a month, packing yourself is typically still more cost-effective. We also suggest talking from that volume, although setup with a ready-made connector is free.
- Made-to-order products. If you make every item after the order comes in, there's nothing to store in advance.
- Every parcel is unique. If every order gets a handwritten note or a custom selection, outsourcing only helps in part. Many custom requirements can be turned into rules, though: custom packaging, inserts, kitting. Value-added services
Own warehouse or fulfillment partner: a comparison
| Own warehouse | Fulfillment partner | |
|---|---|---|
| Cost | Mostly fixed: rent and wages even when orders are low. | Mostly variable: you pay item by item for receiving, storage and orders. |
| Peak season | Overtime, temporary staff or delays. | The partner's team and capacity handle it. |
| Carrier fees | A contract tied to your own volume. | On the partner's carrier contracts, with several carriers, or on your own contract. |
| Stock | Only as accurate as your own records. | You see it in the partner's system and client portal. |
| Multiple channels | You have to connect and update every channel yourself. | Online store, marketplaces and B2B from one stock, if the partner can do it. |
| Your time | Packing, stock, carriers. | Product, marketing, customers. |
Checklist for choosing a partner
- Dispatch cut-off: until what time does an order still ship the same day? With us, up to 20:00 (Budapest time) on working days, depending on the carrier. About dispatch times
- Ready-made integration: is there a connector for your online store and marketplaces? With us: Shoprenter, UNAS, WooCommerce, Shopify, eMAG and Allegro, and a custom API for other systems. Integrations
- Itemized pricing: is every fee shown on a separate line, with no hidden fees? Our pricing is itemized and activity-based. Pricing
- How storage is measured: what is storage billed on? With us, on daily measurement: you pay for what you actually use.
- Returns: how long does it take for a returned item to get back into stock? With us, within 48 hours of arrival, on working days. Returns management
- Client portal: can you see your stock and the status of your orders? With us, in the MDS e Partner Portal. Technology
- Onboarding time: how long until you go live? With us, 10 working days from signing to the first shipped parcel, if we have a ready-made connector for your online store and your goods arrive by working day 3. Onboarding
- One contact person: who do you turn to with questions? With us, a dedicated account manager from onboarding onwards. About us
How does onboarding work?
With us, onboarding takes 10 working days from signing to the first shipped parcel, if we have a ready-made connector for your online store and your goods arrive by working day 3. We connect your online store and marketplaces, receive your stock and agree on your packing rules. If you're moving from another provider, we can also arrange moving your stock with HGL Group transport, based on a quote. How onboarding works
If at least two of the six signs apply to you, it's worth comparing your own cost per order with an itemized quote. Request a quote