Kitting

What is Kitting?

The process in which two or more items are clubbed, packed together and sold as a single unit is called Kitting. Whenever a kit is made, a separate SKU is assigned to it. For example, if a customer is buying a cellphone from a marketplace, the seller can suggest the customer a kit which might have a protective cell phone case and a memory card bundled with the cellphone at a comparatively lower price.

Kitting vs. Bundling: What’s the Difference?

Kitting is often confused with bundling, but they serve different purposes in inventory management.

• Kitting: Products are pre-assembled into a single unit and assigned a new SKU before being sold.
• Bundling: Individual products are grouped together but retain their original SKUs and can be sold separately.

 Example: A laptop kit that includes a charger, mouse, and laptop sleeve—pre-assembled and assigned a unique SKU—is kitting. Meanwhile, a "Back to School Laptop Bundle" that offers these items at a discount but tracks them separately is bundling.

There are mainly two types of kitting...

Basically, there are two simple ways that merchants opt for while kitting their products:

1. Kitting the products beforehand
2. Kitting the products after the order is placed.

Kitting the products way in advance can be beneficial for the seller, as s(he) can then list them on the marketplaces accordingly. It's comparatively a less costly option. You need not to keep products in your inventory waiting to receive the orders and then accordingly bundle them.

Why is Kitting done?

The most common reason why kitting is done is to generate excitement amongst the buyers, and make them purchase the additional add-on items along with what they had planned to buy, at a competitive price.

The Business Benefits of Kitting

Beyond just increasing excitement among buyers, kitting provides tangible financial and operational advantages, such as:

• Increased Revenue: Kitting encourages customers to buy complementary products together, boosting the average order value.
• Reduced Costs: By pre-assembling kits, businesses can lower labor costs in fulfillment and reduce packaging expenses.
• Improved Efficiency: Pre-packaged kits minimize errors in order fulfillment and reduce shipping delays.

Example: A beauty subscription box company kitting skincare products in advance speeds up packaging, ensures consistency, and improves customer satisfaction.

Why exactly is kitting important for eCommerce and online merchants?

For numerous reasons, kitting can be very much advantageous and helpful to both B2B and B2C businesses...

• Kitting helps you enhance the cash flow, by selling off more than one product
• Helps you to sell off the old or unwanted stock which might turn up being a deadstock later
• Helps you to reduce the carrying costs for your inventory by clearing off the items 'faster'
• Stock levels are more efficiently maintained
• You might just win a customer by providing convenience to them with more suggested products

When does Kitting make sense?

Kitting is never done randomly. It totally depends on the availability of the products in your inventory, their demand, and how well they relate to the products they are bundled with.

Below are the criteria which can help you with a better kitting:

1. Bundle only the products that relate to each other, make sense, for example - a cell phone accessory can be bundled with a cellphone, and not with a t-shirt or any other product.
2. Make sure that the stock is available - you can never bundle something that is never there. A very simple rule to keep in mind. Products should always be available in your warehouse to be bundled.
3. Packing separately is never a bad idea - if you have an order for an aerosol can, lighter fluid, some tissues, you can never pack them all together. Ship them together, but never pack such things together.
4. Bundle the kits strategically - the bundling of the kits should be done in a way that your products are promoted. For example, you are selling something from a brand that isn't really famous. Bundle those products with your top-selling products and promote them.

Best Practices for Effective Kitting

To maximize kitting success, businesses should follow these guidelines:

• Optimize Inventory Forecasting: Use data to identify high-demand product pairings that will move quickly.
• Consider Seasonal Kitting: Holiday kits, back-to-school bundles, and limited-time promotional kits create urgency and drive sales.
• Test Kit Performance: Track sales data to see which kits perform well and adjust your offerings accordingly.

How can inventory management software help you with Kitting?

Forecast the product demands - Inventory management software can always assist you with the analytical reports. With these reports, you can always try to figure out which products are the best to be bundled together, that your customers might like, and are relatable.

The inventory control - every product that is inward into the warehouse is then allotted an SKU. If a merchant or seller has bundled certain products way in advance, there is a necessity that a separate SKU is given to that particular bundle. With good inventory management software, you can easily manage this.

Integration with delivery partners - Once an order management software is integrated into the process, it will eventually smoothen the bundling, getting them all listed on multiple marketplaces, and then shipping them to the customers.