If you’re looking for ways to boost sales for your eCommerce business, kitting services may be just the ticket. Selling and shipping in kits will reduce your packing and shipping costs. In addition, kits can increase revenue and customer satisfaction. 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 kit which can be picked as its own SKU. Kitting saves money in fulfillment costs, as well as encourages 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 a kit could be a convenience pack for orders that include multiples of same item. For example, perhaps you sell soap for $5 a bar but offer a five-pack of your most popular scents for $22. Pre-packing the variety soap pack under a separate SKU is an example of kitting.
Benefits of Creating Kits
There are several advantages to kitting. When you offer the option to buy a kit, your customer is encouraged to make a larger purchase. Their reward is a discounted price. 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 Kitting
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. However, 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 the ease of getting everything he needed will bring him back to your site when he’s ready to swap out his muffler.
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 stock pot will instantly transform your customer from a procrastinating last minute shopper into the world’s most thoughtful gift giver.
Kitting Gives You 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 the kitted items, giving you more SKUs.
Kitting gives you an edge over your competition as well. In a crowded marketplace, there may be dozens or hundreds of other sellers offering the same merchandise. However, you can stand out if you’re the only one to combine a full rugby outfit with knee braces, bandages, and antiseptic spray, to take care of your customers on and off the field.
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. He does know that her favorite color is blue. 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 with 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. You also need to include enough infill to make sure it survives shipping without breaking, chipping, or getting dented.
If you kit a set of five soaps, however, you can probably use about the same amount of infill as you needed to ship that single bar. You can create a single label for your kit and save on internal packaging. In addition, you can ship your kitted items in one compact box. This saving on packaging is one of the ways that the kitting process can improve your profit margin.
Lower Shipping Costs
Another benefit to kitting is the potential to find savings on shipping. For instance, in the case of 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 kit pack them 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, 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 kit of plates, cups, bowls, and utensils with a mini-fridge. You can pack all the extras inside the fridge and ship the whole kit for not much more than the cost to ship the fridge by itself.
For lightweight items, selling in kits can reduce the dimension of your packages. The savings from this could 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 needs to be weighed before shipping, a kit has a predetermined weight. Your fulfillment warehouse can skip weighing. They may even be able to print postage in large batches, which can save you money.
The Kitting 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 kits. In addition, you may need some new packaging, particularly if your kits are sold as gift items.
Selling your products in kits 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. Some eCommerce fulfillment warehouses can break up kits, if needed. That way, you have the flexibility to fill orders as they come in.
Here are some of the decision points for your business as you create kits for your eCommerce shop.
Your Kitting Warehouse and SKU Management
Kitting can require some savvy supply chain management. You may need to order additional inventory to create the kits and, if they 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 selling history to understand what combinations will appeal to your customers before going big into kitting.
Check with your 3PL provider about their flexibility in kitting and assembling your products. What if your kitted items 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 a huge increase in demand.
If your kits don’t sell well, make sure your fulfillment center can break your kits back down into the individual items. They’ll need to change the SKUs to reflect this as well. Flexible SKUs help you move your inventory and save you money.
There is always the risk when you get into kitting. But 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 costs 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 as orders come in.
In some cases, it makes more sense to do the kitting 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. This can save you thousands of dollars per year on your order fulfillment service costs.
Are Kits Right for Your ECommerce Business?
If you find that your customers tend to order the same items together over and over, you’re in a good place to be an example of the kitting definition. You don’t have to take your cues from your customers, however. You can create innovative kits that show them 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 could be a winner.
The challenges presented by kitting can be overcome with assistance from a full-service fulfillment service provider. If you think that kits will boost your sales, work with your fulfillment center to make the magic happen.