How Much Does It Cost to Start a Warehouse and Logistics Business?
- Nate Jones, CPCU, ARM, CLCS, AU
- Oct 28, 2025
- 2 min read
Updated: Oct 29, 2025
Starting a warehouse and logistics business can be a profitable venture—but it requires significant upfront investment. From leasing facilities and purchasing equipment to securing insurance and hiring staff, understanding the full cost breakdown is essential for planning and long-term success.
At Wexford Insurance, we help warehouse and logistics entrepreneurs protect their investments with tailored insurance solutions. In this guide, we’ll explore the key startup costs and the insurance coverage you’ll need to operate safely and legally.
Estimated Startup Costs
Depending on your business model and location, startup costs can range from $200,000 to over $1.5 million. Here's a breakdown of major expense categories:
1. Facility Costs
Leasing warehouse space: $8–$15 per sq. ft. annually
Purchasing property: $140+ per sq. ft.
Renovations, permits, and compliance: $10,000–$100,000
2. Equipment & Technology
Forklifts, pallet jacks, racking systems: $40,000–$150,000
Warehouse Management System (WMS): $30,000–$120,000
Robotics and automation (optional): Up to $750,000
3. Fleet & Transportation
Delivery vehicles: $100,000–$500,000
Maintenance and fuel: Variable monthly costs
4. Staffing & Payroll
Initial hiring and training: $80,000–$300,000
Ongoing payroll and HR management
5. Marketing & Branding
Website, SEO, and digital campaigns: $20,000–$100,000
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Insurance Costs and Coverage
Insurance is a critical part of your startup budget. It protects your business from liability, property damage, employee injuries, and equipment failures. Here's what you need:
Covers third-party injury and property damage
Cost: $1,000–$3,000/year for small operations
Covers your warehouse building, inventory, and equipment
Cost: $1,200–$6,000/year depending on location and value
Covers employee injuries and lost wages
Cost: $2,000–$5,000/year depending on payroll and risk level
Covers delivery vehicles and fleet operations
Cost: $1,500–$3,500/year per vehicle
Covers repair/replacement of machinery like forklifts and conveyors
Cost: $500–$2,000/year depending on equipment value
Final Thoughts
Launching a warehouse and logistics business requires careful financial planning and strategic investment. While startup costs can be substantial, the long-term revenue potential is strong—especially with the right infrastructure and insurance protection.
At Wexford Insurance, we specialize in helping logistics entrepreneurs secure the coverage they need to operate confidently. From general liability to equipment breakdown insurance, our programs are designed for the unique risks of the warehouse and logistics industry.
Ready to protect your investment?
Contact Wexford Insurance to speak with a specialist today.
