The season of gift giving is upon us and it brings many opportunities for sellers to offer customers attractive promotions such as gift sets, bundles, and “buy one get one” deals. One way to manage these types of offers on the backend and to assist with operational efficiencies is through kitting. Kitting refers to bundling multiple items into one unique SKU, to be treated as one shippable item. Products can be virtually kitted on your marketplace or warehouse management system (WMS) or physically kitted into prepackaged sets.
Benefits of Kitting
Physically bundling products can reduce fulfillment costs and increase efficiency, by picking one kitted SKU vs multiple individual SKUs. This can also reduce human error in handling, as a kit with multiple items is already prepackaged, there is less room for error when picking the item. One of the other benefits of kitting is that it can increase order value. Whether physical or virtual, kitting multiple items into a “set” or bundle can be a good way to showcase items that pair well, resulting in a higher value order or upsell.
Challenges of Kitting
Physically kitting an item requires increased inventory planning. An item that is physically kitted can no longer be sold separately, meaning you may have to hold more inventory if offering items individually as well as in kits. Bundling products with variations, such as multiple color or sizing options, require the setup of multiple physical kits. When offering a gift set, this often requires additional or custom product packaging.
Best Practices for Kitting
Whether you’re looking to implement kits as a way to increase sales or increase warehouse efficiencies, it’s important to discuss kitting services with your manufacturer and your warehouse staff or fulfillment partner. Your manufacturer can often offer physical kitting in a more cost-effective manner than hiring a warehouse to kit products for you or kitting them in-house. Discussing kits for fulfillment ensures proper handling of physical and virtual kits and gives an opportunity to address any training necessary. Kitting is an easy way to maximize your sales during the holidays. If you are kitting products, remember to always work with your manufacturer and 3PL ahead of time, doing so will make the process much smoother – paving the way for a positive ROI.
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