An optics brand was growing fast, but their fulfillment setup was holding them back.

They were spending over $2.5M a year on fulfillment and shipping. With over 1,000 SKUs, they needed a partner built for complexity. Instead, they were stuck with billing issues, slow responses, and missed SLAs. The team knew they needed a change, but didn’t have the bandwidth to run a full search.

That’s when they brought in Operating Crew.

Founder Yan Sim led the transition - scoping the problem, running RFPs, modeling costs, and helping the brand switch to a better-fit 3PL.

I spoke with Yan to break down exactly how they did it.

Here’s what I learned from that conversation and how you can apply it if you’re in the middle of a 3PL search or thinking about switching soon.

1. Match your business model to the right type of 3PL

This brand was shipping lightweight eyewear products with over 1,000 SKUs. That ruled out most high-volume, low-SKU fulfillment providers. They needed a 3PL familiar with fashion and accessories. Storage layout, pick optimization, and item handling are all different when you’re dealing with a large SKU catalog.

They also decided early on to stick to a single-node setup. At their scale and order weight, a multi-node fulfillment strategy would add more complexity than value.

“If you're under $30 million in revenue and shipping lightweight goods, a single-node setup is almost always more efficient,” Yan said.

Starting with the wrong type of 3PL is one of the biggest sources of wasted time during these searches.

2. Most of the savings came from shipping, not fulfillment

Everyone obsesses over pick and pack rates. But pick and pack was only 30 percent of the total cost structure. Shipping accounted for 60 to 70 percent. That’s where the biggest improvements were made.

By relocating the warehouse to Ohio, the brand reduced shipping zones for most of their customers. And by leveraging the 3PL’s stronger carrier relationships, they lowered per-shipment costs.

“Brands think they’re picking a 3PL based on fulfillment, but the real win is in transportation. That’s where the biggest leverage comes from,” Yan said.

If you’re evaluating a 3PL right now, make sure to model the shipping cost impact—not just the warehouse fees.

3. Evaluate 3PLs based on how they perform under stress

Every 3PL will tell you they’re accurate, fast, and great at communication. The only way to know if that’s true is to see how they handle issues when things don’t go as planned.

Operating Crew embeds deeply with the brands they support. They stay in Slack channels. They review invoices. They see how the 3PL responds when things go sideways.

“It’s not whether something breaks. It’s how they react when it does. And that’s really hard to figure out from the outside.”

If you don’t have that kind of inside view, backchannel. Talk to operators who’ve worked with them. Ask about peak season performance. Ask what happens when orders get missed. That’s where the real insights are.

4. Build your own cost model before you ask for quotes

Instead of sending a vague RFP, Yan builds a detailed model first. He maps out every fulfillment activity - DTC orders, B2B, returns, kitting - and breaks down each step. Then he estimates the time per task, converts it into cost using a $40/hour labor baseline, and comes up with a projected per-order rate.

In one case, his model came in at $1.45 per order. The 3PL quote came in at $1.95. Instead of haggling, he walked them through the model and asked where their assumptions were different.

“We ask, ‘How would you do it differently?’ Sometimes they missed how simple the setup was. Other times, their infrastructure added time. Either way, we walk through it together.”

That quote eventually landed at $1.55. Still profitable for the 3PL, and way more aligned with the brand’s needs.

5. Choose the partner that gives you confidence - not just the lowest quote

The brand didn’t pick the cheapest warehouse. They picked the second cheapest. That warehouse had stronger account management and a better operations team. And the difference in pricing was small enough that it didn’t justify the risk of going with the lowest bidder.

The Head of Ops at the brand had been burned before. He wanted a long-term partner, not just a short-term deal.

“Once you’ve had a bad 3PL experience, you start to understand the hidden costs. You stop optimizing for the lowest number on the page.”

In this case, the second-best price came with the best team. That was the smarter choice.

6. You don’t need six months to do a proper search

From start to finish, the project took eight weeks. That included the initial scoping, narrowing the 3PL list, negotiating rates, and implementing the transition.

In faster scenarios, especially when Operating Crew already knows the warehouse partners well, the timeline can shrink to as little as two to four weeks.

“We’ve built enough relationships that we know who’s good for what. That’s what lets us move quickly.”

If you’ve already done the upfront work of mapping out your needs and have a strong list of vetted 3PLs, you can move faster than you might think.

7. Build trust after the contract is signed

Choosing a good partner is only the first step. Maintaining that relationship requires time, presence, and a willingness to work together.

At Warby, Yan’s team would fly out monthly to their 3PL’s facility, walk the floor, and even pick orders themselves. They’d listen to feedback from the warehouse team and look for ways to improve SOPs on both sides. Over time, they earned trust.

They even created a small incentive program - after six months on the account, warehouse teammates got a free pair of glasses. The 3PL staff started wearing Warby products. It was a small gesture, but it helped build buy-in from the ground up.

“If they like you, they’ll go out of their way to help you succeed. If they don’t, they’ll point to the contract. And you won’t get the partnership you need.”

In a space where so much is outsourced, getting people to care about your brand makes all the difference.

Final takeaway

Switching 3PLs is a big move. It’s easy to get stuck in analysis paralysis or optimize for the wrong things. But with a clear model, good benchmarks, and an eye for operational fit, you can make a switch that drives real financial and operational impact.

Most importantly, you want to find a partner who actually helps your brand grow.

Q&A with Yan L. Sim

If you want to go deeper, here’s the full conversation I had with Yan. It includes more detail on everything from negotiation strategy to how his team builds trust with 3PLs over time.

Table of Contents

1. Understanding the Problem & Decision to Optimize

2. Evaluating 3PL Options & Negotiation Strategy

3. Transition & Implementation Process

4. Results & Impact on Business

5. Lessons Learned & Advice for Other Brands

This conversation has been edited for length and clarity.

1. Understanding the Problem & Decision to Optimize

What was the brand’s operational setup before engaging with you?

The brand was working with a VC-backed 3PL that generally focused on larger clients—those doing $200M+ in revenue. While the 3PL was fine for basic fulfillment tasks, it quickly broke down when things got more complex. The brand faced challenges with transparency in billing, particularly around shipping. It often took weeks to resolve even minor issues, as their account managers were off-site and communication was inefficient. It felt like playing a long game of broken telephone.

At what point did it become clear they needed to optimize their fulfillment, packaging, ocean freight, and parcel shipping?

They reached out to us with a clear goal: improve profitability. Their annual fulfillment and shipping costs were $2.5 million, which seemed excessive for their scale. The company had already gone through one fundraising round and was preparing for another—but without improving unit economics, they risked raising at a lower valuation.

So we got to work. Our first step was to understand their biggest cost drivers, which turned out to be fulfillment, packaging, ocean freight (China to the US), and parcel shipping. We launched separate RFPs for each area to evaluate market rates and identify opportunities. Since the brand had a lean team, they didn’t have the capacity or market data to run this kind of process internally. 

That’s where we came in.

What were the main cost drivers identified?

We broke it down into four categories: 

1. Fulfillment, 

2. Packaging, 

3. Ocean freight, and 

4. Parcel shipping. 

Each required its own focused RFP. The team had been reasonably prudent with costs, but market shifts and complexity meant they were leaving money on the table. 

Whenever urgent needs arose, like moving shipping containers from China, we would run quick quotes through our network and often secure better rates. But the biggest opportunity came from reevaluating their fulfillment partner.

2. Evaluating 3PL Options & Negotiation Strategy

What were the key issues with their previous 3PL setup?

Their 3PL operated like a tech company—high volume, low service. It lacked the hands-on, operational flexibility that growing brands need. As a mid-sized client, they were deprioritized. There was no true partnership, and operational pain points piled up.

How did you go about selecting and benchmarking potential 3PL partners?

We started by understanding the brand’s needs across DTC and retail, including SKU complexity (over 1,000 SKUs). 

That narrowed the field—many 3PLs are set up for low-SKU, high-volume operations, which wouldn’t work here. Next, we looked at customer distribution. With most customers in the U.S. and SKUs that were small and lightweight, a single-node setup in the Midwest made sense. It would reduce shipping zones and costs while simplifying inventory management.

We tapped into our network of trusted 3PLs and also ran an RFP with 10 providers, some of whom we’d never worked with before. From there, we narrowed it down to three finalists.

What criteria were most important in choosing a new 3PL?

We looked for:

• Experience handling fashion-style, high-SKU accounts

• Strong SLA performance—especially during peak season

• Midwest location for shipping efficiency

• Tech compatibility with Shopify and ERP

• Clear, consistent communication and dedicated account management

How did you structure the negotiation process to secure the best possible rates?

We built a detailed operational model:

• Projected monthly volume for DTC, B2B, returns, kitting, and more

• Broke down each fulfillment step: picking, packing, labeling, sealing

• Used time studies (including walkthrough videos) to estimate labor time

• Created a benchmark cost by multiplying time estimates by $40/hour baseline

For example, if we estimated 68 seconds to fulfill a DTC order, that came out to ~$1.45. If a 3PL quoted $1.95, we knew there was a mismatch. Sometimes, the 3PL would realize they misunderstood the scope and adjust their rates. Other times, we learned they lacked infrastructure like pick-to-light or wave picking, which explained the higher costs.

This approach created transparency on both sides. We weren’t just negotiating hard—we were showing them how the work could be done more efficiently. This ensured fair rates that would hold up long-term.

What are some common mistakes brands make when negotiating with 3PLs

Brands often:

• Oversimplify their ops to get low quotes, then get hit with surprise charges

• Fail to communicate SOP variations (e.g., different packaging for influencers vs. reorders)

• Don’t validate how quotes were calculated

• Neglect to model the total cost of ownership

How did the brand’s volume, SKU variety, and packaging needs influence your 3PL decision?

The brand needed a partner familiar with high SKU counts and small, delicate products. We prioritized 3PLs with proven experience in fashion, strong inventory storage logic, and warehouse layout efficiencies to reduce walking and picking times. Flexibility in packaging and handling returns was also key.

3. Transition & Implementation Process

What were the biggest challenges in transitioning operations?

The biggest challenge was timing. We were heading into peak season, so any disruption risked delays and unhappy customers. We also had to maintain inventory across both the old and new 3PLs to avoid split shipments.

How did you ensure the transition didn’t disrupt fulfillment or customer experience?

We executed a phased approach:

• New inventory was sent directly to the new 3PL

• Existing stock was sold down at the old warehouse

• Select SKUs were transferred strategically to avoid excess transfer and storage costs

We maintained dual inventory temporarily to ensure smooth order flow. This allowed us to complete the migration with no disruption to customers.

How long did the full project take—from first conversation to shipping out of the new 3PL?

The timeline varied a bit because this project involved both familiar and new 3PLs. Here's how it broke down:

• Week 1: Built the initial short list of 10 3PLs. Shared a one-pager with core brand details (SKU count, product types, fulfillment needs) to quickly filter out any poor fits.

• Week 3: Held screening calls and gathered ballpark quotes to narrow down to the top three candidates.

• Week 4: Ran in-depth pricing comparisons using Operating Crew’s fulfillment model. Gathered time study data, modeled out shipping zones, and compared operational setups.

• Week 6: Coordinated warehouse visits and final evaluations. Once a decision was made, initiated onboarding.

• Week 8: Transitioned inventory and shipped first order.

So from kickoff to selection, the process took about 8 weeks.

From there, implementation timing depended on the brand’s urgency. In this case, onboarding was slightly longer due to scale—but with smaller brands, we’ve completed everything—search, decision, and go-live—in as little as 2 weeks.

4. Results & Impact on Business

What were the most immediate improvements the brand saw?

The impact was dramatic:

• Annual savings of over $750,000 (possibly closer to $1 million)

• Shifted from unprofitable to profitable

• Avoided dilution from another fundraising round

• Enabled access to inventory financing

• Achieved 75% YoY revenue growth after the transition

Where did most of the savings come from?

• Parcel shipping was the biggest lever—by tapping into better carrier rates through the 3PL

• Lower shipping zones from the Midwest location

• More efficient SOPs and cost transparency in fulfillment pricing

Were there unexpected benefits?

Yes. Faster fulfillment led to better customer satisfaction. Internal bandwidth was freed up. The team could focus on growth and expansion—especially new launches tied to influencer and celebrity campaigns. The improvements also made wholesale and retail expansion more viable.

What if they hadn’t made these changes?

They likely would have needed to raise another round of capital at a worse valuation. Profitability would have remained elusive, and growth opportunities would’ve been limited.

5. Lessons Learned & Advice for Other Brands

What are some key takeaways from this project for other brands in a similar position?

Brands shouldn't underestimate the value of experienced operators or specialized consultants. Operational management can be intricate, but with the right expertise, it doesn't have to become a constant headache. Brands must thoroughly research and validate 3PL providers beyond flashy marketing materials or case studies, speaking directly with other brands who've worked with them—especially those who've since moved on—to gather honest, real-world feedback.

What mistakes do brands commonly make when trying to reduce fulfillment and shipping costs?

• Rushing into price-first decisions

• Underestimating how operational details affect cost

• Skipping a thorough process because they lack time or internal expertise

If a brand is currently overpaying for fulfillment, what’s the first step they should take?

Get an experienced operator to audit your current setup. Use time studies, model total costs, and then either renegotiate or run an RFP.

How do you ensure a strong, long-term relationship with a 3PL after securing good rates?

Treat your 3PL like a true partner:

• Visit the warehouse regularly

• Get hands-on with operations—help pick and pack

• Build relationships with the account team and floor staff

• Offer small perks—like gifting your product to warehouse workers

If they like you, they’ll go the extra mile. If they don’t, you’re just another account.

What industry trends are shaping fulfillment and shipping costs today?

• Labor costs are rising, especially with Amazon raising wages

• Carriers like UPS are optimizing for profitability (e.g., dropping Amazon as a client)

• USPS is absorbing more volume, especially for lightweight parcels

• Customers care more about delivery certainty than pure speed

Advancements in warehouse automation and efficiency-enhancing technologies will help mitigate some of these rising costs, and staying informed about these industry trends will be essential to maintaining cost-effective operations.