Dr. Squatch had outgrown its fulfillment operations.
Instead of fuelling growth, fulfillment had become a limiting factor – slowing campaigns, negatively impacting CX, and pulling focus from brand-building.
Then, they switched to ShipMonk.
In just 90 days, they cut delivery times in half, complaints dropped out of the top 10, and NPS scores climbed sharply. And most importantly, Dr. Squatch’s team could redirect their energy back to scaling the brand rather than managing daily disruptions.
I spoke with Andrew Sutton (Sr. Director of Fulfillment, Dr. Squatch), Jason Welsh (Sr. Manager of Ecommerce Fulfillment, Dr. Squatch), and Jonathan Briggs (SVP of Sales, ShipMonk) to break down exactly how they pulled it off - and what to look for if you’re choosing your next 3PL.
Let’s dive in. 👇
What's Inside:
When Operational Partners Can’t Keep Pace with Growth
Dr. Squatch wasn't a scrappy startup anymore. They were processing 10,000-12,000 orders daily, with promotional spikes of up to 25,000 orders. Their growth was exciting, but it was also pushing the limits of their fulfillment footprint.
Like many scaling brands, the operational challenges were real:
Orders could take 2-3 days to ship even with available inventory on hand
No way to prioritize express customers during spikes stemming from large promotions
Inconsistent 3PL throughput, ranging unpredictably from 5,000 to 15,000 orders a day
Inventory mismatches between systems and warehouse floors
Limitations in infrastructure and technology for their expanding product categories
Some of this was the nature of fast growth.
Dr. Squatch was one of the first major clients on the 3PL’s new warehouse management system and accounted for a significant portion of the partner’s volume and labor. That created unique dynamics – and risks – on both sides.
And when it came time to launch a new hazmat spray cologne – a product their partner couldn’t support – the need for change became clear and drew a hard date in the sand.
💡 Operator insight: As you scale, choose partners who can and want to grow and evolve with you. The best fit is a partner where you’re influential, but not their single point of failure.
The RFP: Finding Partners Who Invest in Improvement
Facing a compressed timeline with peak season approaching, Dr. Squatch’s fulfillment team took a different approach than a typical lengthy RFP process.
Instead of starting from scratch with 40-60 vendors, they focused on their shortlist from previous evaluations - companies they'd already visited and assessed.
ShipMonk had been a finalist in previous RFPs but hadn't been selected before. This time, the fit was different.
Dr. Squatch’s evaluation criteria had evolved to focus on strategic partnership potential:
Beyond basic capabilities, they sought:
Similar-scale clients: 3PLs handling customers of comparable size, not wanting to be the biggest fish in the pond
Continuous improvement mindset: Partners actively investing in getting better, not just maintaining current performance.
Cost awareness: Understanding of their heavy, dense product profile (2-3 lbs) with relatively low average order values.
Growth capability: Proven ability to handle volume variability and promotional spikes.
This focus on improvement trajectory versus current state became a key differentiator in their evaluation process.
💡 Operator insight: When evaluating 3PLs, pay attention to how excited they are about their improvement roadmap versus defending current capabilities. Partners investing in getting better will scale with your growth more effectively.
The Shipping Economics That Brands Often Miss
For Dr. Squatch's heavy products - 2-3 pounds each with relatively low order values - shipping costs quickly became one of the biggest line items on the budget.
Despite already running a two-node 3PL network with a SoCal and MidWest nodes, shipping costs were still eating into the company’s profitability.
Jonathan Briggs had worked with Andrew before and understood the trade-offs well:
ShipMonk's multi-node strategy flipped the entire cost structure:
Geographic optimization: Three strategic locations instead of one central warehouse, cutting average shipping zones from 5-6 to 2-3 across most customer bases.
Zone-skipping economics: 15-20% shipping cost reduction by getting products closer to customers before final mile delivery.
Weather resilience: Geographic distribution avoided the single-point-of-failure problem when storms shut down entire regions.
Carrier diversification: Access to regional carriers and better routing options through aggregated volume.
But the real breakthrough was ShipMonk's Virtual Carrier Network (VCN) - an aggregated approach that dynamically routes orders across multiple carriers based on cost and service optimization.
💡 Operator insight: If your products weigh over 1 pound, shipping optimization will drive 3-5x more savings than warehouse cost reductions. Prioritize 3PLs with multi-node networks and carrier aggregation over single-facility operations.
Understanding Customer Expectations Through Data
One critical insight shaped Dr. Squatch’s fulfillment strategy: aligning service levels with what truly drove customer satisfaction.
Through NPS surveys and customer experience data, Dr. Squatch’s team discovered that customers valued delivery consistency and reliability above all. Deliveries within a reasonable window maintained high satisfaction, while delays beyond expectations quickly eroded loyalty.
This insight led to a clear service-level strategy: ship within one day, deliver within a few days, and most importantly – set customer expectations you can consistently meet.
The results spoke for themselves: NPS scores increased significantly, and fulfillment dropped from Dr. Squatch’s #1 customer complaint to outside the top 10.
💡 Operator insight: Use customer feedback data to map real satisfaction drivers instead of relying on assumptions about “Amazon speed.” You may find a more achievable and profitable sweet spot than expected.
The Three-Month Implementation Process
Once a verbal agreement was reached, Dr. Squatch had approximately three months for the complete transition, though the actual inventory move and go-live happened in about three weeks.
The timeline was driven by their need to launch the hazmat cologne - the original catalyst for the switch - and the approaching peak season.
The compressed timeline required careful coordination:
Background preparation: Align on IT integrations, system testing, and process documentation.
Inventory transition: Physical movement coordinated to avoid stock-outs.
System integration: API connections and data mapping.
Hazmat certification: Ensuring proper handling for the cologne launch.
The successful execution during this tight timeline gave Dr. Squatch confidence in ShipMonk's operational capabilities from day one.
💡 Operator insight: Compressed timelines can work when both parties are committed and well-prepared. Clear communication and thorough background preparation are essential for successful rapid implementations.
The Results: Measurable Transformation Across Operations
Six months after the transition, the improvements were evident across multiple dimensions:
Customer experience improvements:
Click-to-delivery time: Reduced from 7-8+ days to under 4 business days
Order accuracy: Consistently above 99.5%
Fulfillment complaints: "Where is my order?" (WISMO) dropped from #1 customer service issue to outside the top 10
NPS impact: Significant increases in customer satisfaction scores
Operational efficiency gains:
Order processing: Reduced from 2-3 days to same-day shipping
Throughput consistency: Eliminated the unpredictable 5,000 to 15 to 5,000 order swings
Volume capacity: Successfully handling promotional spikes of 20,000-25,000 orders
Billing simplification: Single consolidated invoice instead of managing multiple carrier relationships
Extended operations: Seven-day-a-week processing year-round
Team impact:
Less micromanaging of basic operations
More time for strategic brand initiatives
Confidence to focus on growth instead of crisis management
The transformation freed Dr. Squatch's team from "micromanaging our 3PLs instead of growing our business," as Andrew puts it. Now they have "confidence across the organization that whatever we produce or promote, we can execute on it and guarantee that customer experience all the way through delivery."
💡 Operator insight: Successful partnerships deliver measurable improvements in customer experience while freeing internal resources to focus on core business growth rather than operational crisis management.
The Monthly Rhythm That Prevents Problems Before They Start
Here's what many brands miss: ongoing success requires systematic collaboration, not just good initial setup.
Dr. Squatch and ShipMonk established monthly strategic planning sessions that go far beyond day-to-day operational check-ins:
Forward planning (preventing surprises):
12-month volume forecasts at the daily level that are updated quarterly for capacity planning
Detailed marketing calendar with promotional spike dates and expected volume multipliers
New product introductions mapped with special handling requirements
SKU velocity analysis for warehouse slotting optimization
Seasonal pattern reviews to adjust staffing and system capacity
Continuous improvement (getting better together):
Packaging optimization projects (even 1-inch box reductions can drive meaningful cost savings across storage, shipping, and handling)
Transportation performance analysis by region and carrier with specific improvement targets
Process efficiency initiatives across inbound receiving, storage, picking, packing, and outbound
Cost optimization opportunities identified through data analysis
The investment in relationship management pays dividends.
When Dr. Squatch launches surprise promotions or faces unexpected volume spikes, ShipMonk can adapt quickly because they understand the business context.
💡 Operator insight: Schedule monthly strategic reviews separate from daily operational communications. Share your marketing calendar, growth plans, and business challenges. The more context your 3PL has, the better they can optimize for your actual needs versus generic best practices.
The Hidden Economics of "Cheap" Fulfillment
Dr. Squatch's experience highlighted an important principle about fulfillment partnerships: the lowest-priced option often carries higher total costs when accounting for the full business impact.
Beyond direct fulfillment costs like pick, pack, and shipping, there are significant indirect costs to consider:
Return processing and replacement orders
Lost customer lifetime value from poor experiences
Wasted advertising spend when customers don't reorder
Management time spent on crisis resolution rather than strategic initiatives
The investment in more reliable operations freed up internal resources and improved customer satisfaction.
💡 Operator insight: Build a comprehensive cost model that includes customer service impact, return handling, lost customer lifetime value, and management opportunity cost. Higher-quality partnerships often deliver better total economics by reducing hidden operational costs.
Lessons for Your Operations
Total cost includes indirect impacts: Factor in customer service overhead, wasted ad spend, lost customer lifetime value, and management time spent on crisis resolution. "You get what you pay for" in fulfillment - cheap options often create expensive secondary problems.
Research actual customer satisfaction thresholds: Use NPS surveys and customer feedback to understand real delivery expectations. The sweet spot is often more achievable than assumed "Amazon speed" requirements.
Multi-node networks can optimize shipping economics: For products over 2 pounds, geographic distribution and carrier aggregation can deliver better service at lower total cost than single-facility operations. Jonathan's wisdom: "You save pennies on warehousing, but you save dollars on shipping."
Balance client significance with operational independence: Seek 3PLs where you're important but not dominant. Dr. Squatch learned that being the majority of a 3PL's volume created more problems than leverage - they absorbed operational risks and capacity constraints.
Design for promotional volume peaks: Ensure your 3PL can handle 2-3x normal daily volume during marketing campaigns and seasonal spikes without service degradation. Test this capability during evaluation, not during Black Friday.
Invest in collaborative planning: Regular forecasting, promotional calendar sharing, and continuous improvement discussions transform vendor relationships into strategic partnerships. As Andrew notes: "We treat them like internal team members, not a vendor."
Avoid being beta customers on new technology: Being first on a new WMS created unnecessary operational challenges. Let other companies work through system implementation issues first.
Evaluate improvement culture and investment: Partner with 3PLs actively investing in getting better, not just maintaining current performance. Look for teams more excited about their roadmap than their current capabilities - they'll scale with your growth.
Consolidate operational complexity: Single billing for warehousing, fulfillment, and shipping eliminates carrier relationship management overhead. This freed Dr. Squatch's team to focus on brand building instead of operational firefighting.
Test capacity during decision process: Evaluate 3PLs based on their ability to handle your actual volume patterns and product complexity, not just their general capabilities. Ensure both technology and physical infrastructure can support your specific requirements.
Dr. Squatch's three-month transformation shows what's possible when you find the right 3PL partner. Their team went from micromanaging to focusing on growth - exactly where high-growth brands should be investing their energy.
The key insight: Sometimes the best operational decision is investing in a partner who can handle your complexity, scale with your growth, and free your team to do what they do best: build an amazing brand.
