This article will explain some of the benefits and drawbacks of using a warehouse kitting service. Warehouse kitting may help ecommerce businesses save time and money while also improving inventory management. Although kitting is a value-added service, it may be just as crucial in your ecommerce fulfillment as picking, packing, and shipping. Kitting is especially useful if your products are frequently purchased together, since you may assemble a package ahead of time before an order is placed. This article will explain what warehouse kitting is and why it’s beneficial to your business, as well as how to outsource the procedure to a third-party logistics provider.
What is Kitting?
Kitting is the process of combining several distinct goods together to form a new SKU and sell it as a single item. You have the option to ship them all at once rather than selecting and packing each one separately, which is more time-consuming.
When placing an order for individual items, the product is usually found based on the SKU in the warehouse management system. Kitting combines things that are frequently purchased together to produce a single unit, which is then stored in your fulfillment center. The benefits of this approach are that you may simply and quickly locate the items as a set, without having to worry about putting together the various components after an order is placed.
What is the Difference Between Kitting and Bundling?
Often incorrectly used interchangeably, kitting and bundling are not always the same thing.
Bundling goods refers to the practice of combining many SKUs (or ASINs when selling on Amazon) into a single package. Bundling is often utilized for seasonal initiatives like the holiday season or a limited-time promotional offer.For example, a business might encourage their customers to buy three of one product and get flat rate shipping as a reward.
A speciality of packing is known as kitting. Kitting occurs when a collection of items must be packed or prepared in sequence before delivery, and it’s done by combining assembly with kitting. Kitting is frequently carried out using things like subscription boxes, packaged goods, or built-to-order items.
What are the similarities between them? Both product bundling and kitting involve combining numerous individual products to form a new one.
What are the Benefits of Kitting?
Kitting offers a number of significant advantages to businesses, including time and financial savings. It is an extremely useful tool in ecommerce since it allows merchants to offer more SKUs by combining smaller orders into larger purchases. When you offer a kit option, you’re encouraging your consumer to make a larger purchase. You may occasionally give a discounted price as an enticement to buy more items at once. You profit from the potential for greater sales while yet lowering your average shipping expenditures. Because kitting may be done ahead of time at a larger scale, warehouses are able to outpace the order fulfillment procedure. Because product bundles are pre-assembled, fulfilling orders for these kitted goods is considerably quicker and more efficient. Customers can save time and effort by using them, as well as enhance the purchasing experience since the most popular items are combined into one list and customers won’t have to search for each one separately.
Organization & Efficiency
Kitting is a fantastic approach to make your order fulfillment procedure more streamlined and efficient.
When you use kitting, you may create fewer high-selling SKUs, making it simpler for you to keep your distribution center’s inventory organized. This may appear to be the case inversus, but if several of your items are frequently purchased together, kitting them into a bundle will result in a lower SKU count. This optimizes warehouse space while also making the process more efficient as a whole. If you don’t outfit your products and must assemble an order on demand, the fulfillment procedure will take longer to complete, possibly resulting in shipping delays. Kitting allows you to quickly identify the components required for your most popular product mixes, improving the efficiency and productivity of your whole fulfillment process.
Simplify Your Shipping Process
Kitting your items into kits can make your shipping procedure easier and more efficient. Automating the process will help minimize human error and reduce the time it takes to fill orders. The easiest approach to ensure a quick and error-free shipment is to weigh the products before they’re packed and print shipping labels.
Improve Packaging
Kitting also has the advantage of lowering packing costs. You may instead pack all of your items together in a personalized box rather than separately packaging each individual SKU into larger normal boxes that may be inconvenient. You may decrease the size and weight of your shipments by signing for them. It also saves money on materials costs, such as package fillers and packing tape, which add up if you send a lot of packages. Reducing packaging costs is another way kitting may help you improve your profit margin. You may save money by outsourcing assembly and kitting services to a 3PL provider, who can provide you with tailored packaging options. Events such as the holiday season or special offers may be particularly packed for ecommerce businesses. This gives greater income and sales, while also optimizing efficiency by packaging and kitting the product bundles ahead of time so they are ready before your company’s peak fulfillment times.
Reduce Warehousing Cost
A packaging service’s cost is based in part on how much storage space your goods take up. The amount of storage space required for kitting SKUs (with combined items) will be less than that required for items kept separate.
Kitting procedures in warehouses improve supply chain standardization, allowing for easier cost modeling. Because the contents of each kit are predetermined, predicting expenses is considerably simpler than if the components had to be picked, packed and sent individually. You may save money on storage fees by reducing the amount of space your items take up in a warehouse.
Increase Sales
Finally, kitting may also be used effectively as a marketing technique.
Consider how many different goods you have on hand that are comparable to the one you’re looking at. You’ll want to sell off your existing products so you have more room to order fresh items. If you kit them together and sell them as a package deal at a discount, you may move your excess goods out faster than if you tried to sell the items separately. By selling all of the individual items alone, as well as the kitted things, you can improve your online store’s exposure by offering more SKUs. Fulfilling this way may not only improve sales, but also reduce your inventory turnover.
Bottom Line
Kitting is a straightforward yet successful order fulfillment method that can help your business save time and money, not to mention make the process of fulfilling orders smoother and more organized. It’s also something you’ll need to examine on a regular basis. As your company develops, you’ll frequently need to add new items to your stock list, and client demands will vary over time. It’s important to audit your inventory for efficiency on a regular basis—particularly during kitting seasons—to take advantage of all the benefits that come with kitting correctly.
Value-added services are something we excel at, such as kitting, assembly, and delay work. If you’re searching for a contemporary 3PL to help you improve your fulfillment approach by offering any of our services, get in touch with us today. We’d be delighted to hear from you.