If you're an online merchant, you likely understand that the order fulfillment process can be quite daunting. Inventory monitoring becomes quite complex, and you often find yourself holding unnecessary loads of inventory in your warehouse.
Every merchant looks for ways to make this task seamless and simple, and nothing works best than a warehouse kitting process. The kitting process in the warehouse is one of the most common services for eCommerce fulfillment. Besides optimizing inventory monitoring, it also helps businesses save time and money.
This guide explores everything about the kitting experience in detail. Read on to see how this process benefits your company.
What Is Kitting in a Warehouse?
Simply put, kitting is a process that packages and bundles products together which are otherwise sold separately. So, whenever a customer orders one product, the company registers the entire bundle as a part of a sale. As a result, kitting in a warehouse helps increase revenue and simultaneously enhances customer satisfaction. This technique works quite efficiently for big eCommerce giants such as Amazon.
Further, kitting in a warehouse fulfills customers' orders by pre-assembling different products into kits that the merchant can sell without picking or packing each product individually. One of the most common examples of the kitting technique is subscription boxes. Instead of having more than one manufacturer sell their items separately, a subscription box bundles all related products in one package and sells them together.
Another example of kitting is when a customer buys a computer from you online — they expect to receive a monitor, keyboard, and other components as well. However, instead of sending each item separately, following the kitting technique means you pack all the essentials into a bundle for increased customer satisfaction.
So, how is this carried out in a warehouse? To understand that, let's first explore what happens once you receive an order.
What Is the Process of Kitting?
Suppose you're in your warehouse and you receive an order. First, you would find all of the individual items requested through their unique codes in the management system. Once the items have been found, a member of your staff will retrieve each product and then update the inventory accordingly.
Further, you would carry out the same process for every product since each item has a separate SKU (Stock Keeping Unit) assigned to them. So, whether you have to ship ten products or twenty, this cumbersome task is necessary to avoid any errors in your final inventory. Unfortunately, this process can be as time-consuming as it is costly.
However, with kitting, you can spare yourself from this stress. By following this technique and bundling similar items together that were ordered by a particular client, you're creating a single deliverable item in your inventory that's easy to locate and ship.
Here are some significant steps that happen in the kitting process.
Choose the Items That Should Be a Part of a Kit
Selecting related products for a kit is relatively easy. Note the common qualities different products have, such as their colors, themes, or functionality. You can also include some wholesale products to increase your profit margins.
Assign an SKU to This Bundle
Once all the related items are together, give their bundle a unique SKU. This is because these products are now one saleable item, and your inventory tracking system should locate it. When conducting a final inventory count every year, you may find issues if it doesn't have an SKU.
Assemble Your Bundle
After the customer order reaches a warehouse, it's time to assemble all the items in a bundle before shipping them to their buyer. Again, it's best to request your team to do this task to save on money, costs, and time.
Sell and Send
Once the bundles are ready, you can market them and sell them to people who might be interested. Again, this process will help you see a good jump in your overall revenue and profits.
What Are Kitting Supplies?
Kitting supplies often include the final packaging required to pack a bundle. The packaging needs to be quite strong and should highlight the brand’s identity at the same time.
A properly packaged kit can easily hold as many items as possible and simultaneously ensure that the value of the company is being reflected on the box. When putting multiple items in a kit, it's essential to use bubble wrap to avoid any damage in transit.
What Are the Benefits of Kitting?
Now that we've explained what kitting is, let's explore the benefits this process has for different stages of eCommerce. The benefits kitting provides are most apparent in manufacturing and order fulfillment.
Kitting Process in Manufacturing
When used in manufacturing, kitting helps organize and assemble different components into kits or bundles before being delivered to the point of use. Such kits allow manufacturers to streamline their shipping and packing and decrease warehouse costs. Further, bundles are a great way to control inventory that's used during manufacturing.
Here are some notable benefits of kitting in manufacturing:
- Helps manufacturers increase their space and move inventory with ease.
- Increases manufacturers' cash flow, contributing to increased profitability down the line.
- Reduces labor costs by demanding less workforce, which ultimately impacts your profits for the better.
The benefits of kitting in a warehouse are also quite prominent. Business owners can implement this process to see a massive and positive change in their inventory monitoring and overall costs.
Helps Organize Inventory
Kitting makes warehouses more organized — if your warehouse needs to see improvements in this regard, then chances are you need to implement kitting. Kitting also means you're generating fewer SKUs, which eventually makes inventory organization quite effective. Moreover, the process increases the overall warehouse space and simplifies workflow.
Warehouse kitting is quite helpful with increasing overall efficiency. Supposing that you've implemented kitting, this means that your team members will be able to locate all of the relevant products in one place when you receive orders from customers. This ultimately boosts overall productivity.
You may not experience the full impact of this benefit right away. However, it will help increase your work speed and quality of service over time.
Decreases Labor Costs
As discussed earlier, kitting demands fewer people to perform a specific task. In turn, this can help reduce what you spend on labor, thus leading to more significant profit margins.
Fast and Seamless Shipping Process
Kitting in a warehouse is also intended to make the entire shipping process fast and seamless. As a result, it helps reduce the time required for order fulfillment and eliminates the chances of human error.
Packing different products separately increases not only your overall cost but also affects the quality of what's delivered. Kitting is an effective solution to this problem.
Kitting makes packaging efficient and affordable. Rather than going for individual packs, you can create a custom-sized kitting box to put all your items together. This can reduce your packaging costs by a significant margin.
Works as a Powerful Sales Strategy
Kitting is a smart strategy to boost sales. Selling similar items separately can be challenging, especially when they individually have a low overall value . However, when bundled together and sold at a discount, their value increases, which means your revenue is positively impacted. So not only does kitting help to boost your sales, but it also increases your inventory turnover.
Frequently Asked Questions
Product kitting is a great technique to help you and other companies achieve a certain level of discipline in their inventory. However, there's a chance you haven't explored this process before if you're reading this information for the first time.
Below, we've compiled a brief list of common questions that you may already have in mind as a business owner or manager.
What Is Inventory Kitting?
Also referred to as product bundling, inventory kitting also involves the process of selling different items as one product. So, when a customer purchases a kitted product, each inventory system is automatically considered sold.
Inventory kitting helps eCommerce businesses in many ways. For instance, it enhances the average value of the orders, keeps inventory holding expenses down, makes it easy to maintain and track stock levels, and delivers flexibility and exemplary service to the buyer.
Are There Any Kitting Fees?
Kitting business has its fees, and these are mostly charges for utilizing an assembly line for a bundle before shipping it to its buyer. Unfortunately, kits require a lot of time and precision to create, so companies usually charge more for them than single-product packs.
The fees for kitting are usually between $30 to $50 per hour, but this may vary across different industries. For instance, the kitting cost is generally higher than this range for sensitive products.
Does Kitting Require a Lead?
Kitting fulfillment services can become quite complicated without a leader, so a kitting lead is often appointed to supervise this entire process. This person is responsible for guiding packers, shippers, pickers, tracking, executing, and shipping kits on a timely basis.
What's more, a kitting lead comes with tremendous experience related to inventory and warehouse management. In addition, they're responsible for working in the existing environment and improving the areas requiring critical amendments.
Kitting With Rakuten Super Logistics
Now that you're familiar with the value and benefits of the kitting process, you might have decided that it's time you implement it into your eCommerce business. Thankfully, we're here to help you with that.
At Rakuten Super Logistics, we strive to provide our clients with the cost savings, flexibility, and scalability they require in their effective order fulfillment strategy. In addition, we offer fast and seamless distribution solutions to our clients so that they can offer great value and service to their customers.
What's more, we excel in our client service. At Rakuten Super Logistics, we value client relationships and interact with our clients daily. We can be available for help whenever it's required.
Our main goal is to empower eCommerce retailers and give them the peace of mind they demand from a kitting and fulfillment center. Increase your customer expectations and take advantage of our fulfillment services to achieve the desired success for your eCommerce business.
In this guide, we explored the details of kitting and how this process can help streamline manufacturing and warehouse management operations. Kitting is a powerful technique that can help eCommerce businesses reduce their costs and benefit from manageable inventory, increased warehouse space, better labor efficiency, and heightened work productivity.
If you want to implement kitting for your eCommerce business, consult Rakuten Super Logistics for a seamless kitting experience. We can help you attain your goals easily and reliably.