In-House vs Outsource Calculator

About this calculator

The make-or-buy decision — building a capability in-house versus outsourcing it to a vendor — usually comes down to a cost-crossover point. In-house work typically carries higher fixed costs (salaries, equipment, management overhead) but a lower cost per unit of output once running; outsourcing usually has little to no fixed cost but a higher, usage-based price per unit. Below a certain volume, outsourcing wins; above it, building in-house does.

This calculator compares the two cost structures over your expected volume or time horizon and shows which option is cheaper — and at what point, if any, the cheaper choice flips. Operations managers, startup founders, and procurement teams use this kind of comparison when deciding whether to hire and build a team for a function like manufacturing, IT support, or customer service, or to contract it out instead.