Kitting is a terrific way to boost sales in your eCommerce business. Selling and shipping in sets can reduce your packing and shipping costs and kits can increase revenue and customer satisfaction. Also, kitting can streamline your eCommerce fulfillment and help your products arrive in perfect condition. What’s not to like?
What is Kitting?
Kitting is the term for pre-packing and selling multiple items together. This unit becomes a preassembled and ready-to-ship set that is picked under a new SKU. Kitting can save money in fulfillment costs, as well as encourage greater sales of multiple items.
A kit can be literal, such as a knitting pattern sold with the yarn needed to make the project. Or it could be a convenience pack for orders that include multiples of the same item. For example, perhaps you sell soap for $5 a bar but offer a five-pack of your most popular scents for $22.
Benefits of Creating Kits
There are several advantages to kitting. When you offer the option to buy a kit, you give your customer an incentive to make a larger purchase and reward them with a discounted price. And you gain with larger sales and lower shipping costs.
Here are just a few of the benefits of kitting for your eCommerce business.
Customers Love Sets
Kitting can be a huge help to your customers. Rather than assembling the wig, clothes, and fake guitar for a heavy metal musician costume for Halloween, your customer can order all the pieces together in your 1980’s Heavy Metal Rocker costume. Your customer saves time and can be sure he’s got all the right components for an epic Halloween night.
Smart kitting can improve your customer satisfaction ratings too. For example, if you sell auto parts, you might put together a kit that includes all the parts and tools needed to install a new carburetor. You can’t make your customer get up off the couch and go to the garage to do the project, but your kit will increase his chances of successfully completing the repair when he does. He won’t thank you, of course – he’ll assume it’s his own wrench skills that made the job a success. But he’ll have more confidence to take on his next project if he knows he can buy a kit from you with everything he needs to get the job done.
Kitting is a plus for gift shoppers, too. Instead of fishing around for the right gift items for your favorite home chef, a kit that includes a dried soup mix and a carved wooden spoon with that new stockpot will instantly transform your customer from a procrastinating last-minute shopper into the world’s most thoughtful gift giver.
Get More Sales Opportunities
If you list on sites such as Amazon or eBay, kitting can increase your exposure. You can offer all the individual items by themselves plus a volume order or a set of products, giving you more SKUs, more listings, more visibility.
Kitting also gives you an edge over your competition. In a crowded marketplace, there may be dozens or hundreds of other sellers offering the same merchandise, but you can stand out if you’re the only one to offer a thoughtfully curated kit. For example, you could sell a gardening manual with the seed packets needed to create the garden described in the book, so you give customers everything they need but the plot for the garden.
Kits Are Convenient
Kits save your customers time and hassle. When you offer kitted items, you are doing a service for busy online shoppers.
Consider, for example, someone who wants to give his favorite aunt a gift. She loves to knit, but he doesn’t know anything about knitting. Fortunately, he does know that her favorite color is blue, and that’s all he needs to find a sweater kit, complete with yarn and pattern. He gets to make his aunt happy and she’ll think of him every time she wears the sweater.
Kits made of bulk items can save time, too. If your regular customers like to get a selection of your bath products, putting them together in a convenient kit saves shopping time. And your bath-time expertise will ensure that all the essentials are included in your kit. Your customer can click once, so ordering is a breeze.
Reduce Your Packaging Costs
When you sell a single bar of soap, you need to ship it with a label or wrapper and it needs enough infill to survive shipping without breaking, chipping, or getting dented.
If you kit a set of five soaps, however, you can save on infill and packaging. A single label for your kit will reduce the cost to label your products, plus you can ship the kitted items in a single compact box. And you’ll pay a single picking fee for the kit, so kitting will reduce your fulfillment costs and improve your profit margin.
Save on Shipping
Another benefit of kitting is the potential to find savings on shipping. For instance, for the set of five soaps, each bar of soap comes in an individual box. If a customer ordered the soaps individually, you would take the five soaps in their individual boxes and pack them together into a larger box. But if you have a five-bar kit, you can pack them in one box designed to hold exactly five bars of your soap. Not only will you save on packaging costs, but the order will weigh less because it doesn’t include as much cardboard, so you save on shipping as well.
In addition, kitting can provide a great advantage on shipping costs for bulky items. For example, you could package a dorm room starter set of plates, cups, bowls, and utensils with a mini-fridge. You can pack all the extras inside the fridge and ship the whole set for not much more than the cost to ship the fridge by itself.
For lightweight but oversized items, selling and shipping in a consolidated package can reduce the dimensions of the package. The savings from this can be substantial since DIM weight pricing can make your shipping charges add up. Use this dimensional weight calculator to see how much kitting can save you in shipping costs.
Kitting can also save time (and money) when your fulfillment warehouse ships an order. Unlike a package assembled from various SKUs, which need to be weighed before shipping, a kit has a predetermined weight so the packer can skip weighing.
Kitting Solves Many Problems
In this post, we mainly address the benefits of kitting to improve your sales and save you money. However, the process can also improve your order fulfillment and even solve supply chain problems. Here are a few examples:
- Shipping fragile items. Rather than adding custom packaging at the packing station, which can slow down operations and add extra expense, you could develop a kitting process to pre-wrap an item such as a glass vase in bubble wrap or put it inside an extra box. When someone orders that item, it’s protected for shipping and ready to pick and pack.
- Correct manufacturer mistakes. By the time one of Red Stag Fulfillment’s clients discovered that the manufacturer had left a key component out of the boxes, the products were already in our warehouses. The company could have shipped everything back to the manufacturer to correct the issue, but that would have delayed orders for a popular product. Instead, Red Stag used kitting to add the missing item and start filling orders quickly.
- Group items that often sell together. Even when you don’t offer items as a set online, you can use kitting to pre-pack items that often sell together, to make fulfillment quicker.
Red Stag Fulfillment has seen the value of kitting to solve a variety of problems for our clients. That’s why we consider it one of our core services.
Process Decision Points
Of course, kitting isn’t free. You’ll need to pay for staff time (either yours or your kitting warehouse) to create the sets. In addition, you may need new packaging, particularly if your sets are sold as gift items.
Selling your products in groups also requires a certain amount of seeing into the future. You have to predict which items your customers will like grouped together. You also have to reserve enough stock that’s not kitted to fill the demand for individual items. At Red Stag Fulfillment, we can also break up kits if needed so that you have the flexibility to fill whatever orders come in.
Here are some of the decision points for your business as you create kits for your eCommerce store.
Warehouse and SKU Management
Kitting can require some savvy supply chain management. You may need to order additional inventory to create the grouped product and, if the items don’t sell as expected, you will have extra stock tied up on your fulfillment center shelves. It’s a good idea to wait until you have enough sales data to understand what combinations will appeal to your customers before making a substantial investment in the process.
Check with your 3PL about their flexibility in grouping and assembling your products. What if your product sets are insanely popular and you sell through them but still have the component items in stock? Make sure your fulfillment warehouse has the kitting experience to handle an increase in demand.
If your grouped items don’t sell well, make sure your fulfillment center can break your kits back down into individual items. They’ll need to change the SKUs to reflect this as well. Flexible SKUs help you keep your inventory lean, which can save you money.
Your knowledge of your products and your customers’ order patterns can help you use kitting to increase your sales and cut your fulfillment and shipping costs.
Up Front or On Demand?
You can do kitting in two ways: on the front end (when inventory is received into the warehouse) or on the back end (as the orders come in). There are good reasons to choose one way or the other, depending on your circumstances, but kitting on the front end yields the greatest cost savings.
The labor to do the kitting all at once when the inventory comes in, rather than creating kits one at a time during the pick and pack process, is less time consuming and, therefore, less expensive. Plus, your kitted items can move quickly to the shipping dock when orders come in.
In some cases, it makes more sense to create kits as orders come in. Adding custom embroidery to a sweatshirt or address numbers to mailboxes are two examples of custom kitted products. These can’t be put together until after the customer places the order.
Whether you pre-pack kits or create them on-demand as orders arrive, the kitting process can automate your most frequent product combinations. That can save you time and money on order processing.
Are Kits Right for Your ECommerce Business?
If you find that your customers tend to order the same items together over and over, kits could benefit you and your customer base. But you don’t have to take your kitting cues from your customer; when you create innovative kits, you can inspire consumers with combinations they can’t wait to order.
Kitting is not for every eCommerce business. If your items come in different sizes (such as clothing), kits may not work for you. On the other hand, if your products are often purchased as gifts, kitting them into a gift assortment may boost your sales. If you think that kits will boost your sales, work with your fulfillment center to make the magic happen.
At Red Stag Fulfillment we’ve seen how kitting can help our clients grow and scale their businesses. We’d be happy to answer your kitting questions, too.
More about kitting:
- Guide to Product and Material Kitting
- How To Start Your Own Subscription Box Business
- Is Package Consolidation Right for You?