Freeze a symmetric comparison basis
Comparable assumptions
- Use the same orders per period and the same parcel or service profile. (not complete)
- Use the same currency and indirect-tax basis for both options. (not complete)
- Define which packaging, pick, pack, shipping, storage and returns tasks are included. (not complete)
- Value internal labour with a loaded business cost, not a customer billing rate or zero. (not complete)
- Separate fixed period costs from variable cost per order. (not complete)
- Record minimum invoices, onboarding, integration, exception and exit costs explicitly. (not complete)
Compare fixed and variable cost symmetrically
Total cost per period = fixed cost per period + order volume × variable cost per order
- fixed cost per period
- Costs that do not change within the entered volume scenario (currency units per period) — business record, contract quote or user scenario
- order volume
- Orders fulfilled in the same comparison period (orders per period) — business record or user scenario
- variable cost per order
- All included per-order labour, packaging, handling and service costs (currency units per order) — business record, contract quote or user scenario
| Criterion | Self-fulfilment record | Third-party record | Comparable unit |
|---|---|---|---|
| Fixed cost | Space, systems, equipment | Minimums, account or storage charges | Currency units per period |
| Variable cost | Loaded labour, packaging, shipping | Pick, pack, packaging, shipping | Currency units per order |
| Capacity | People, space and peak constraints | Contracted limits and exception capacity | Orders per period |
| Service | Cut-offs, accuracy and internal control | Service levels, claims and escalation | Same service definition |
| Change risk | Hiring, systems and process work | Onboarding, integration and exit terms | Dated transition plan |
Test low- and high-volume boundaries
Two neutral cost lines
These are user-entered assumptions in currency units, not provider prices or recommended operating levels.
| Orders per month | Self: 1,200 fixed + 7 per order | Third party: 300 fixed + 10 per order | Cost signal only |
|---|---|---|---|
| 100 | 1,900 | 1,300 | Third party lower in this scenario |
| 300 | 3,300 | 3,300 | Entered cost lines meet |
| 500 | 4,700 | 5,300 | Self lower in this scenario |
Record trade-offs before selecting a scenario
| Trade-off | Self-fulfilment question | Third-party question |
|---|---|---|
| Control and standardisation | Can the team maintain the process at peak? | Does the contract define handling and escalation clearly? |
| Capacity and flexibility | What happens when people or space are constrained? | What minimums, tiers or peak limits apply? |
| Change and dependency | What investment and management time are required? | What onboarding, integration and exit work is required? |
Methodology sources
- Fulfilment Cost Comparison methodology — Margin101: Product-owned fixed, variable and crossover formulas and limits.
Carry measured in-house capacity into the comparison
Measure productive hours, picks per productive hour, picks per order and peak orders with the Warehouse Pick-Pack Capacity tool. Carry only the supported in-house order capacity for the same period into the self-fulfilment side of the comparison.
Capacity hand-off checks
- Use observed productive hours for one declared period. (not complete)
- Keep picks per hour and picks per order on compatible definitions. (not complete)
- Test the named peak-order scenario separately from normal volume. (not complete)
- Do not publish an ideal pick rate or utilisation assumption. (not complete)
- Do not treat the capacity result as a recommendation to outsource. (not complete)
Measure the in-house capacity boundary
- Pick & Pack Capacity Planner
Plan pick-and-pack capacity for peak order demand