Does your business have excess inventory that just isn’t selling as well as you originally planned? What about similar products that pair great together? If you’ve answered “yes” to any of these questions, you may want to consider kitting. As one of the most popular used techniques in e-commerce, it can help your business boost profits, minimize costs, and more! Below, we’ll break down what kitting is, why it’s rising in popularity, and if you should consider incorporating it into your business practices.
As the name suggests, kitting is an inventory management technique that involves packaging a set of items together in a single order unit for customers. With the recent boom in online sales over the last few years, it’s become increasingly popular. Usually, the process is incorporated to increase order value and promote or sell less-popular inventory. Doing it efficiently can even help your business boost revenue, reduce operating costs, and enhance customer satisfaction.
What’s involved in the kitting process?
Simply put, kitting involves packaging and shipping individual but related products into a single bundle. For example, let’s imagine you make and sell body wash products. Rather than have your shipping specialists pack and sort similar items with different SKUs into separate packages, kitting allows them to be combined and delivered in the same box for your customers to try.
The operations aspect of kitting is pretty straightforward as well. Once a 3PL company receives an order, the items are picked by employees, assembled into a single package, and shipped. After a bundle of products is kitted together, a new SKU is usually assigned and entered into the system. This new SKU number allows the products to be tracked for sales performance metrics and accurate inventory counts.
To make the process more efficient, more experienced 3PL companies may train their employees to use specific kitting techniques. Some even stripe in a unique warehouse layout to streamline the process.
What are the benefits of kitting?
Kitting services are an ideal way to get your customers to test out and start using products they wouldn’t have typically used or seen. If done accurately and thoroughly, it allows the shipping process to be streamlined, reduces shipping costs, and allows for quick order fulfillment. As a result, order tracking becomes significantly more manageable, and customers are less likely to become unsatisfied. Apart from these benefits, many business owners choose to kit for the following advantages:
- Saves time and improves warehouse efficiency
- Improves sales
- Lowers labor costs
- Increases turnover ratios
Although not suitable for every company, kitting is an easy way to help your business generate more profitable sales, lower costs, and boost customer satisfaction by allowing your consumers to try out an assortment of products at lower prices. If you’re interested in learning more about this process, speak to an industry professional who understands it best! At Sherpack, our Grand Rapids, MI fulfillment operations and services have helped various businesses in the Midwest and other parts of the United States meet their sales goals. Call us today for a consultation, or fill out our contact form to get started!