Warehouse Build vs Outsource
A short e-commerce decision problem. Use the supplied facts, commit to one action, then check your reasoning. Fictional practice; no leaderboard score is recorded.
E-commerce · build versus buy
Third-party fulfillment costs you $6.40 per order at 40,000 orders a month. Your own warehouse would cost $1.9M up front and about $4.10 per order, and would take a year to reach full efficiency. Your order volume has swung between 22,000 and 55,000 a month over the past year.
| Given fact | Scenario data |
|---|---|
| Third-party cost / order | $6.40 |
| Current monthly orders | 40,000 |
| Own warehouse investment | $1.9M up front |
| Own warehouse cost / order | About $4.10 at full efficiency |
| Ramp to full efficiency | 1 year |
| Observed monthly order range | 22,000–55,000 |