Agency vs In-House Cost

The agency versus in-house decision is one of the most consequential staffing choices a growing ecommerce brand makes. The answer is not always obvious — agencies offer immediate expertise and flexibility but charge premiums, while in-house hires offer dedicated focus and institutional knowledge but require management overhead, benefits, and ramp-up time. This calculator compares the full annual cost of both options.

Agency costs include the monthly retainer plus any percentage-of-spend fees. A typical performance marketing agency charges $3K to $10K per month in retainer plus 10 to 15% of ad spend under management. For a brand spending $30K per month on ads with a $5K retainer and 10% fee, the total agency cost is $8K per month or $96K per year.

In-house costs include salary, benefits and overhead (typically 25 to 35% on top of base salary for health insurance, payroll taxes, equipment, and office space), software subscriptions that the agency previously provided, and training or ramp-up costs amortized over the first year. A $75K per year media buyer with 30% overhead, $500 per month in tools, and $3K in training costs totals approximately $103K in the first year.

Beyond raw cost, consider these factors: agencies bring cross-client learnings and can staff up or down quickly, but they split attention across multiple accounts. In-house hires are 100% focused on your brand but take 3 to 6 months to ramp and create a single point of failure. Many brands use a hybrid approach — agency for execution on primary channels, in-house for strategy, CRO, and channel diversification.