Kitting: How It Works and Its Benefits in eCommerce

Kitting: How It Works and Its Benefits in eCommerce

a kit made up of lavender products

Kitting is an essential part of operations for eCommerce businesses.

The kitting process organizes items into a single package (also called warehouse kitting) that’s sent to your customers. This organization improves efficiency and convenience for both the customer and the seller.

In this post, we’ll explain kitting, how it works in eCommerce, why it’s important, and the benefits it can bring to your business.

Let’s dive in.

What Is Kitting?

Kitting, also known as “kits manufacturing,” is the process of assembling multiple related items into one unit, usually at a discounted price.

Kitting reduces the number of individual steps needed for packaging, delivery, and customer satisfaction. The product kitting process is generally carried out by warehouse workers on an assembly line.

What’s the Difference Between Kitting and Bundling?

The primary difference between product kitting and bundling for an eCommerce business is the type of products that are included in the package.

Kitting involves assembling component items into a single kit, while bundling combines multiple finished products or services into one package.

Let’s unpack this with examples.

A “kit” might include all of the items you need to build a gingerbread house – including pre-cut gingerbread house pieces, frosting to hold the house together, and different types of candy and food colors to decorate the gingerbread house.

On the other hand, a “bundle” might include all five books in a mystery series, or a “Scrapbooking Bundle” that contains a collection of finished products such as a photo printer, photo paper, and scrapbooking stickers.

With this primary difference in mind, there are three other key distinctions to consider:

1. Time and effort

Kitting requires more time and effort to assemble since individual components need to be sourced, kitted together, and packaged for shipment.

Bundling does not require the same additional effort – it simply involves combining multiple products or services into a single package.

2. Flexibility

Kitting offers more flexibility when it comes to customizing product offerings for customers. 

You can tailor the separate kit items to the customer’s specific needs – closely matching the kitted product to their exact requirements.

Bundling, however, is less customizable since it relies on already-assembled products or services.

3. Efficiency

The kitting process also allows for more efficient inventory management, less storage space, and reduced packing costs. You can kit items together in bulk and ship in fewer packages.

With bundling, each customer order may require multiple packages and shipments, depending on the products or services that you include in the bundle.

How Kitting Works in eCommerce

In eCommerce, each kitted item will include all the components to complete the sale.

For example, if you are selling a shirt and tie combo set, you send both items in one package rather than separate packages for each article. 

This streamlines order management processes and improves customer experience by ensuring they receive all their items in one package.

Why Is Kitting Important?

Kitting helps eCommerce businesses save time and money by reducing the packaging materials and labor needed to complete orders.

Additionally, kitting promotes accuracy and integrity in order fulfillment. This is especially important for complex kits that need special attention to detail or require multiple components for assembly.

Benefits of Kitting in eCommerce

Kitting offers many benefits to eCommerce businesses, including:

  • Improved speed and efficiency in picking and packing
  • Better value and cost savings for customers
  • Faster shipping and lower shipping costs
  • Reduction of unnecessary packaging materials
  • Greater accuracy and fewer errors throughout the order fulfillment process versus items shipped separately
  • Improved customer experience through single package delivery
  • Better inventory management capabilities
  • More efficient use of warehouse space
  • Increased profits due to reduced labor costs associated with kitting processes

Notably, kitting is increasingly popular in eCommerce because it can increase sales and combine products from different manufacturers.

Top 7 Advantages of Kitting for Your eCommerce Business:

1. Streamlined ordering and fulfillment

The kitting process helps streamline the eCommerce ordering and fulfillment process, reducing order processing time, inventory levels, and overall costs.

2. Faster turnaround times

Kitting enables faster turnaround times on customer orders, meaning customers get their products sooner and are more likely to return in the future.

3. Shipping costs

All individual items in a kit related to a single order are grouped together in one package and assigned a single SKU, which can help reduce shipping and handling costs compared to shipping products individually.

4. Greater visibility

It also improves visibility into an inventory system, enabling businesses to track and monitor items more easily.

5. Increased efficiency

By kitting products that are often ordered together, businesses can save time and increase efficiency by pre-assembling items that are likely to be ordered together. Most 3PL companies offer kitting services, and some manufacturers provide private label kitting.

6. Improved customer satisfaction

Kitting can also help to reduce errors and customer dissatisfaction during the shipping process since kits are less likely to be sent inaccurately or shipped incorrectly.

7. Higher order value

Finally, kitting allows businesses to offer special deals and packages, which can increase average order values and encourage customers to shop more frequently.

Steps in the Kitting Process

Below you’ll find the assembly process for shipping process kitting:

1. Gather the items that need to be kitted

Collect the items that will make up one kitted item and ensure they are ready to be kitted.

2. Package the kitted item

Package multiple items that make up the kitted item. Depending on the kitting type, this could involve using shrink-wrapping, bubble wrap, boxes, or other packaging materials.

3. Label and track kits

Print shipping labels and label each kitted item with a unique identifier, such as a barcode or RFID tag, for tracking purposes.

4. Ship kitted items

The kits are then ready to be shipped. Select a suitable shipping carrier and ensure the kitted items are properly packaged for safe transport.

5. Monitor kitted item shipments

Once the kitted items are shipped, it’s essential to monitor their progress to ensure they arrive safely at their destination.


How Kitting Can Increase Revenue in eCommerce

Kitting can help boost sales for your eCommerce business.

1. Increase average order value (AOV)

By packaging products together, a kit offers customers more value per purchase, thus increasing AOV and overall profits.

2. Enhance customer experience

Kits help customers get what they need in fewer clicks and make it easier for them to find the right products in one convenient place.

This streamlined shopping experience saves time and nurtures customer satisfaction, loyalty, and repeat purchases.

3. Reduce shipping costs

Combining individual components into one kitted package is often more cost-effective than shipping each item separately – saving on shipping costs and maximizing profits.

4. Generate cross-selling opportunities

Packaging multiple products together creates an attractive offer for customers, increasing their chances of buying more than one product at a time, thus boosting sales.

5. Encourage impulse buying

Attractive kitting combinations can be just the right incentive customers need to buy something they weren’t planning on buying in the first place. This can lead to increased sales and help drive revenue.

6. Drive revenue year-round

Subscription boxes can drive revenue year-round with a single sale.


How to Use Kitting Software

There are many kitting software solutions available on the market to help you get started with the kitting process. This software can be used for kitting processes including product bundling, order picking, inventory tracking, and more.

Investing in kitting software will help streamline kitting processes for your eCommerce business and improve efficiency, accuracy, and customer experience.

By understanding kitting processes, you can ensure the practice works efficiently for your eCommerce business.

After all, kitting is an important component for any eCommerce business, and should not be overlooked. When implemented correctly, kitting can provide a range of benefits to enhance the customer experience as well as profitability for your eCommerce business.

Final Thoughts on Kitting for Your eCommerce Business

Kitting can be a valuable tool for eCommerce businesses to streamline order fulfillment, reduce costs associated with packaging materials, and improve customer experience.

Kitted products reduce the number of individual steps needed for packaging, delivery, and customer satisfaction – making kitting an important part of business operations.

The warehouse kitting process is easy to learn, and investing in kitting will help you remain competitive and as profitable as your eCommerce business grows.

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