In this article, learn about:
The importance of building an operations team before you scale
The different elements that make a successful operations team
The different operations models that suppliers use at different stages of growth
When the hard work finally pays off, culminating in a “yes” from a retail giant like Target or Walmart, the excitement can wear off as the dream quickly morphs into a logistical nightmare.
The reasons are predictable: A founder or general manager assumes that their existing, lean team can absorb the operational load. But within two weeks of the arrival of their first purchase order (PO), the team is drowning in advanced shipping notice (ASN) errors, missed appointment windows, and a flurry of retailer portal notifications they don't know how to interpret. By the time they realize they need more help, they’ve already absorbed thousands of dollars in chargebacks and potentially burned through the "honeymoon phase” of credibility with their new buyer.
Setting up your operations team should be a pre-launch discipline, not a post-launch reaction. To succeed, suppliers must move beyond the direct to consumer (DTC) mindset and treat retail operations as an entirely new discipline. discipline.
The Operational Functions That Must Have an Owner
Before that first PO hits your inbox, every operational function needs a clear owner. This doesn't necessarily mean you need ten different employees, but it does mean you need a documented person responsible for each of the following workflows.
Order Management and EDI Document Flow
Successful operational function starts with electronic data interchange (EDI). This involves continuous monitoring and processing of EDI documents and ensuring that every PO is acknowledged and every invoice is sent correctly.
Item Setup and Data Accuracy
Modern retail relies on clean data. If your dimensions, weights, or SKU details are off in the retailer’s system even by a fraction, it can trigger automated receiving exceptions and fines.
Inventory and Allocation
You must decide which warehouse gets what stock and when. In retail, unlike DTC, you can't simply go out of stock without serious repercussions for your fill rate and future shelf space.
Warehouse and Fulfillment Coordination
Whether you are self-manufacturing, providing your own warehousing, and/or using a 3PL, someone must ensure that the physical product matches the digital order exactly.
Carrier and Routing Compliance
Every retailer has a routing guide, which is a complex rulebook for how and when they want their products shipped. Violating these rules is the fastest way to accrue compliance chargebacks.
ASN and Shipping Document Accuracy
If an ASN doesn't arrive before the truck, or if the data doesn't match the physical pallet, the shipment may be rejected.
Receiving Exception and Chargeback Monitoring
Someone must be watching for deductions and fines from day one. If you wait until the end of the quarter to look at your checks, the money may be gone for good.
Related Reading: Vendor Compliance Checklist
Lessons from the Field: OLIPOP and Liquid Death
While many brands treat operations as a figure-it-out-as-we-go, back-office task, the most successful insurgent brands treat it as a strategic advantage.
When OLIPOP, for example, expanded into mass retail channels like Target and Walmart, their success was both commercial and operational. They recognized early on that succeeding in these channels required a deliberate operational buildout that matched their marketing ambition. This recognition prompted them to scale both their sales team and their discipline.
Similarly, Liquid Death provides a masterclass in operational staffing. Rather than hiring generalists and hoping for the best, they made a point of bringing in veteran operators — people who had spent years at legacy giants like Coca-Cola, PepsiCo, and Fiji Water. These hires brought with them the pattern recognition necessary to navigate the complexities of mass fulfillment and retailer-specific requirements from the jump. They understood that while the brand's voice was irreverent, their operations had to be institutional.
Related Reading: How Bain’s 2026 Insurgent Brands Are Rewriting Retail Operations
Three Staffing Models for Your Launch
How you staff these functions depends on your scale and resources. There is no one-size-fits-all org chart, but there are three distinct models that tend to work.
1. The Lean Model
This model is common for brands who are just entering their first major retailer.
The team: A founder/GM who owns the high-level strategy and a single operations lead or logistics generalist who handles everything else.
What’s in-house: Item setup, order management, and customer service.
What’s outsourced: Warehousing and physical fulfillment are almost always handled by a 3PL.
The benefit: This model keeps your overhead low during the proof-of-concept phase, allowing you to stay agile and make decisions quickly because the person managing the data is directly tied to the brand's vision.
The risk: The operations lead becomes a single point of failure. If they get sick or overwhelmed during a holiday rush, the entire system grinds to a halt.
2. The Mid-Market Model
This model works best for brands that are scaling into multiple retailers or high-volume categories.
The team: A dedicated operations director, an order manager, and a supply chain analyst.
What’s in-house: All document flow, retailer portal management, and chargeback disputes.
What’s outsourced: A 3PL still handles the physical pick and pack, but the internal team manages the carrier relationships and routing compliance.
The benefit: This model allows for specialized eyes on different parts of the process, such as a dedicated person watching for ASN errors.
The risk: There is a recurring risk of communication friction between your internal team managing the digital orders and the external 3PL team handling the physical goods. Additionally, handling chargebacks in-house comes with its own issues.
3. The Full-Scale Model
This model is most commonly adopted by brands that have reached national distribution and want total control.
The team: A complete C-suite-led operations org with specialists for logistics, procurement, demand planning, and compliance.
What’s in-house: Everything; often including their own warehouses or dedicated space in a co-packer’s facility.
What’s outsourced: Little to nothing is outsourced within this model.
The benefit: This model is expensive but offers the highest margins, in part because you aren't paying 3PL markups.
The risk: The complexity and financial overhead are massive in this model. You are now responsible for the TCO (total cost of ownership), meaning you're on the hook for warehouse rent and labor even if retail volumes take a sudden dip.
The Gaps That Surface in the First 90 Days
When a team isn't structured before the first PO, specific failure modes almost always emerge within the first 90 days.
The most common is the ASN ghost, which is when no one is officially responsible for validating the accuracy of ASNs. This usually occurs because the team is so busy just getting the truck out the door that they miss the digital errors that lead to thousands of dollars in fines.
Another common gap is portal neglect. Retailers frequently update their compliance manuals and routing guides through their online portals. If your team isn't checking these regularly, you may be shipping according to last month's rules, leading to a sudden spike in chargebacks that aren’t immediately explainable.
Finally, without clear escalation paths, small issues (like a carrier missing a pickup) can balloon into major disasters because the person who spotted the problem didn't know who was empowered to fix it.
Related Reading: What Happens After a Retailer Says Yes: The First 90 Days for a New Supplier
Discipline Over Reaction
Setting up your operations team is about more than just hiring people; it’s about documenting workflows and establishing ownership. Every person on your team must know exactly what they are doing the moment that PO arrives. By treating operations as a pre-launch discipline, you protect your margins, your sanity, and your hard-won reputation with the retailer.
Once your team is in place and your operational ownership is clear, the next critical decision is the infrastructure they will run on.
SPS Commerce Fulfillment provides the foundation layer your team needs to succeed. It replaces manual, error-prone tasks with automated EDI document flows and built-in retailer compliance specs, allowing your team to focus on making smart operational decisions rather than fighting with technology.
Whether you are scaling to your first retailer or your fiftieth, SPS Fulfillment helps you move work forward with confidence and keep every order moving.