WMS ROI / TCO calculator
Put two options side by side (e.g. cloud subscription and perpetual licence) and see total cost of ownership, payback period and return on investment. You can also use it to lay vendor quotes out in one table.
How it is calculated
- The timeline is monthly. One-time costs (licence, implementation, integration, hardware, internal effort) fall in month 1; annual costs (subscription, maintenance, hosting, internal IT) are spread evenly from month 1.
- Benefits start after go-live and ramp up linearly to full level over 3 months. Time to go-live can differ by scenario.
- Labour benefit = staff × annual cost per person × productivity gain.
- Error benefit = order lines per year × (current error rate − target error rate) × cost per error. The cost per error can include re-picking, shipping, returns and lost customers.
- Inventory benefit = average inventory value × annual carrying cost rate × inventory reduction. Only the lower carrying cost counts, not the cash released from stock.
- Maintenance is an annual percentage of the perpetual licence fee.
- ROI = (total benefit − TCO) / TCO. Payback is the first month in which cumulative net cash flow reaches zero or above. If a discount rate is entered, NPV uses a monthly compounded rate.
- Inflation, exchange rates, tax, depreciation and financing costs are not modelled. In high-inflation periods, enter amounts in one currency and on the same date basis.
The starting values only show how the calculator works; they are not industry averages or vendor prices. Enter your own quotes and measurements. Narrow down candidates with the WMS finder and see them side by side on the comparison page.