An own warehouse mainly costs fixed amounts: rent, fittings and the people who pack, even in a quiet month. Fulfilment, where another company stores, packs and ships your stock, mainly costs an amount per order. With few orders, fulfilment is therefore usually cheaper. Above a certain number of orders per month, the own warehouse becomes cheaper.
If (part of) your stock is in Germany, for example with a platform's fulfilment service, the VAT changes too. You then need a German VAT number and file VAT returns there. And spreading stock over two places usually ties up more money in stock.
In short
- Work out the break-even point: the fixed costs of your own warehouse divided by the difference in cost per order. Below it, fulfilment is cheaper.
- Splitting stock over two warehouses usually costs extra stock. The well-known rule of thumb is the square root of the number of warehouses, but it often overstates the effect.
- Moving stock to Germany is a supply to yourself for VAT. You register in Germany and file returns there for sales to German customers.
In this article
What is the difference in costs between an own warehouse and fulfilment?
The difference is fixed versus variable. In an own warehouse you pay rent, energy, fittings and wages every month, whether there are 200 or 2,000 orders. Per order, only the box, filling material and shipping label are added. With fulfilment you mainly pay per order and per stored product, and little that is fixed.
That makes fulfilment flexible. In a busy month you pay more, in a quiet month less. With an own warehouse, the cost per order is high in a quiet month, because the fixed costs are spread over fewer parcels.
For your own warehouse, also count the hours you spend packing yourself. You cannot spend those hours on buying, marketing or customers. They do not show up as costs in your profit and loss account, but they do cost you something.
At how many orders does an own warehouse pay off?
You work that out with the break-even point. Take the fixed monthly costs of your own warehouse, minus the fixed costs with fulfilment. Divide that by the difference in cost per order. Below that number of orders, fulfilment is cheaper, above it the own warehouse.
Worked example, with amounts as an example and not market prices: an own warehouse costs € 3,000 a month fixed and € 1.50 per order. Fulfilment costs € 300 a month for storage and € 4 per order. The break-even point is (3,000 minus 300) divided by (4 minus 1.50), which is 1,080 orders a month.
Do not look at one month, but at your whole year. If you have a peak in November and December and quiet months after, an own warehouse leaves you below the break-even point for part of the year. So work out the break-even point per month and add up the differences over the year.
Why does a second warehouse cost more stock?
Because each warehouse needs its own buffer. With everything in one place, you can absorb swings in demand with one stock. If you spread the same sales over two places, each place must have enough for its own peaks.
The well-known rule of thumb for this is the square root law: total stock grows with the square root of the number of locations where a product is held (Maister, 1976). Going from one to two warehouses, stock would rise by about 41% under that rule.
In practice the rule is often not exact. A study of 26 companies that changed their number of warehouses found an average deviation of almost 28% in the estimated total stock. The rule mostly overstated the effect, both the saving with fewer warehouses and the increase with more warehouses (Oeser, 2019). So use the 41% as an upper limit, not as a fixed figure.
More stock means more cash tied up. So put in your cash flow planning not only the costs of the second warehouse, but also the extra purchasing to fill it.
What does stock in Germany mean for VAT?
You need a German VAT number and file VAT returns there. On the goods supplied from the warehouse in Germany, you pay VAT in Germany. You do not use the Dutch One Stop Shop for that (KVK, VAT rules for e-commerce in the EU).
It already starts with the transport. If you move your own goods to a warehouse in Germany, that is a deemed intra-Community supply to yourself for VAT. In the Netherlands it is taxed at 0%. You put the value on your Dutch return and on your EU sales list (opgaaf ICP), the overview of supplies to other EU countries. The value is the purchase price. In Germany you declare the same goods as an acquisition, at the German rate (Belastingdienst, moving your own goods to another EU country).
KVK gives the example of a platform's fulfilment service in Germany. Your stock is then in Germany, you need a German VAT number, and a sale to a German consumer is a domestic sale for which you file a return in Germany. If you use the Union scheme (OSS), you do not use your German registration for distance sales to consumers in other EU countries (KVK, VAT rules for e-commerce in the EU). You report those in your OSS return (Belastingdienst, reporting VAT through the One Stop Shop).
Include that extra administration in your comparison. A second VAT return, in another language and on German deadlines, costs time or an adviser. Those are fixed costs that belong to your fulfilment in Germany.
Do you stay responsible when someone else ships your parcels?
Yes. The stock remains yours, even if it is in a fulfilment company's warehouse. It belongs on your balance sheet and you include it in the stock count at the end of the year. So ask your fulfilment partner for a stock list as at 31 December.
You also have a role in product safety. A fulfilment service provider is usually a distributor under the European product safety rules. If it cannot show who is responsible in the EU for a product, the fulfilment service provider itself becomes that responsible party (NVWA, GPSR rules for fulfilment service providers). So make sure the details of the manufacturer or importer are known for every product.
How do you make the choice?
- List your orders per month over the past year, with the peaks.
- Ask for a fulfilment quote and split it into fixed amounts and amounts per order and per product.
- Work out your own warehouse the same way, with your own hours.
- Calculate the break-even point per month and add up the difference over the year.
- If you are considering stock in Germany, include extra stock and the German VAT administration.
Sources
- KVK, VAT rules for e-commerce in the EU, accessed 28 October 2026. kvk.nl
- Belastingdienst, Moving your own goods to another EU country, accessed 28 October 2026. belastingdienst.nl
- Belastingdienst, Reporting VAT through the One Stop Shop, accessed 28 October 2026. belastingdienst.nl
- NVWA, GPSR rules for fulfilment service providers, accessed 28 October 2026. nvwa.nl
- Maister, D.H. (1976). Centralisation of inventories and the square root law. International Journal of Physical Distribution, 6(3), 124-134. doi.org
- Oeser, G. (2019). What's the penalty for using the square root law of inventory centralisation? International Journal of Retail & Distribution Management, 47(3), 292-310. doi.org