Opening a new warehouse is a major milestone—and a major investment—for any building supply or distribution company. Done right, it can unlock faster delivery, better inventory control, and serious revenue growth. Done wrong, it can tie up cash, disrupt operations, and strain your bottom line.
This case study highlights how MetroBuild Supply, a regional building materials distributor, successfully opened a new warehouse location with careful planning, budgeting, and execution—resulting in a 30% increase in service capacity and a strong ROI within the first year.
🏢 Company Overview: MetroBuild Supply
Industry: Building materials distribution
Headquarters: Charlotte, NC
Annual Revenue (Pre-Warehouse): $52M
Challenge: Rapid customer growth and service bottlenecks in the Raleigh-Durham market
MetroBuild had a loyal contractor base but was struggling to meet next-day delivery expectations due to distance from their main hub. Leadership knew it was time to expand—but they didn’t want to risk overspending or overcommitting.
🎯 The Goal: Increase Regional Service Efficiency Without Margin Erosion
The company’s leadership set three clear objectives:
Improve delivery lead times in high-growth areas
Reduce transportation costs and overtime labor
Launch the facility within budget and achieve ROI in 18 months or less
🧩 Step 1: Strategic Planning & Location Selection
Key Actions:
Conducted a heatmap analysis of delivery routes and customer density
Identified Raleigh-Durham as the optimal growth area
Scored candidate warehouse locations based on access to highways, zoning, labor availability, and supplier proximity
Outcome:
Secured a 40,000 sq ft warehouse on a short-term lease with future purchase option, reducing upfront capital exposure.
💰 Step 2: Detailed Budgeting and ROI Modeling
MetroBuild took a zero-based budgeting approach to account for every startup and operational cost:
Categories Budgeted:
Leasehold improvements: $180,000
Racking and equipment: $120,000
Warehouse management system (WMS) integration: $85,000
Staffing and training: $140,000
Inventory preload: $750,000
Contingency buffer (10%): $130,000
Total Initial Investment: $1.4M
They also created a 24-month cash flow forecast, tying ROI to:
Reduced delivery costs per mile
Improved fulfillment rates
Increased order volume in the new service radius
🛠 Step 3: Operational Setup and Technology Integration
Key Focus Areas:
Implemented cloud-based WMS connected to ERP system
Created SOPs for inbound, outbound, and inventory control
Preloaded the warehouse with high-demand SKUs based on local order history
Trained a hybrid team with cross-functional skills for efficiency
KPI Goals:
99% inventory accuracy
95% on-time delivery
Inventory turns of 6+ per year within 12 months
🚀 Results After 12 Months
Success Metrics:
🚚 Delivery lead time dropped from 2.5 days to 1.2 days in the Raleigh area
💸 Transportation costs per order decreased by 22%
📦 Fill rate improved by 12%, boosting customer satisfaction
📈 Warehouse reached breakeven volume in Month 8
💰 Achieved full ROI in 14 months, ahead of the 18-month target
Bonus Wins:
Attracted new contractor accounts due to improved service radius
Gained volume discounts from suppliers with better demand forecasting
Reduced strain on the Charlotte DC, extending its capacity by an estimated 18 months
🧠 Lessons Learned
Plan first, lease later. Avoid rushing site selection before doing a full customer and delivery analysis.
Right-size your inventory. Don’t try to stock everything—focus on fast movers and region-specific SKUs.
Invest in systems. A WMS paid for itself in accuracy and efficiency within months.
Cross-train early hires. A flexible warehouse team helped smooth the ramp-up period.
Model ROI beyond just sales. Include savings from freight, labor, and improved customer retention.
✅ Conclusion: Growth That Pays Off
MetroBuild’s new warehouse didn’t just add square footage—it added strategic capacity, cost savings, and customer value. The success came down to disciplined planning, realistic budgeting, and a leadership team that prioritized long-term ROI over short-term convenience.
