For companies that sell multiple products, kitting can be one of the best additions to your sales efforts. With kitting in place, you can move more products off of the shelves and into customers’ hands, increasing the volume of your sales and positively impacting your bottom line.
What Is Kitting?
Kitting is when different items are grouped, packaged, shipped and sold together as a single product. You can think of it as putting together a variety of products to sell as a single item. Generally, these items will all follow a thematic pattern where the items are all related to one another. Kitting is also sometimes referred to as product bundling. Either term is fine and can be used interchangeably.
One popular use of product kitting can be seen in the many subscription boxes that have become so popular in recent years. Companies that produce these boxes will mix and match a variety of items in a box, usually following a particular theme, and then send them to their subscribers. The most successful boxes will put together a kit where all of the items appeal to their customer base and play off one another.
For a real-world example of this, imagine a company that sells bath supplies is putting together a kitting box. In this box, the company might put items like shampoo, conditioner, bath bombs, face creams and other similar items to build a kit that provides the user with a few products to use in the bathroom.
For a more targeted box, the bath supply company might focus on providing several face creams and cleansers. Instead of trying to cover every base, they can make the theme very focused and brand it as such. Going general or specific in subscription boxes will vary by what a company thinks their customers’ needs are. The contents of the box will be up to you, though the items should probably be related in some way.
Types of Kitting
If you are considering adding kitting to your company, you should know about the common kinds of kitting that are popular among a variety of industries. Other than subscription boxes, popular forms of product kitting include selling items as a set and products that are assembled on order.
The following are the most common forms of product kitting used today:
1. Packed-to-Order Sets
One prominent example of product kitting in online sales comes from sets that are packed-to-order. For example, if you sell bathroom towels, instead of selling a single towel, you might package a few towels into a set. In this set, you could include another towel, a hand towel and a washcloth. If a customer is trying to give their bathroom a consistent aesthetic, buying a set of different kinds of towels and cloths can pull together an entire bathroom.
The same business could also sell a pack of four towels as a set to reach customers who may want to have backup towels on hand. Sets are extremely popular among consumers as they make the buying process easier and faster. Kitting products in this way also can lead to increased sales as you can offer discounts for group sales and sets.
2. Subscription Boxes
As was mentioned previously, subscription boxes are one of the hottest kitting options on the market right now. Unlike what comes with packed-to-order sets, the items that arrive in a subscription box will often be a surprise. However, some companies offer customizable subscription boxes where customers can view the contents before it’s shipped.
In these boxes, you’ll find plenty of different products all fit into one package. These boxes can be very lucrative for companies as customers will often sign up for plans where they pay for and receive a box monthly, giving the company a steady stream of revenue.
3. Assembled Products
Another form of kitting is when a larger item, like a bike, is shipped in separate parts to a consumer or to other sellers. For sellers who don’t have the staff or equipment to sell products preassembled, selling separate parts to make up an entire product in one package can be invaluable.
The packaging of multiple parts can also be used to sell a variety of different versions of a product. For example, a company could offer one version of a product with standard parts, while another version could be offered that contains upgraded portions of the product that might better fit a customer’s specialized needs.
Due to the many different uses of kitting, many companies offer a variety of bundles that attract different demographics. From those who want to give a fun gift to a friend or outfit their bathroom with matching towels, kitting can be just right what they are looking for.
Finale Inventory understands the appeal of kitting and how it can impact a business positively. Our inventory management software comes with kitting functionality to help you manage the creation and sales of kits. You can give the software a shot and add product bundling to your company’s sales strategy with our free trial.
Benefits of Kitting
If you’re not convinced that kitting is worth implementing in your company, you should first consider its many benefits. Warehouse kitting is especially powerful for companies that operate warehouses and supply a variety of sellers. In the warehouse, workers can quickly pack products into specially designed packages that make their job easier.
The following are several benefits that come with kitting, no matter what industry you are in:
1. Kitting Gives You More Sales Opportunities
Everyone loves a good deal, and kitting gives people the feeling that they are getting more bang for their buck. These consumers are usually justified in their feeling, as it’s common practice for the individual items sold in these boxes to be sold at a lower cost. In comparison to buying each item individually, bundled items will be significantly cheaper.
Kitting provides a significant amount of value to customers, and they can increase sales for companies as well. Though companies will be selling their items at a lower price, the popularity of bundled products will often lead to an increase in the volume of sales, which, in turn, generates larger profits.
Another way that kitting can positively impact your sales is by bundling lesser-known or less-popular products into a kit that customers are likely to buy. This way, you can include the price of the less-popular product in with the cost of the bundle as a whole, helping you to move them out of the warehouse and into the customer’s hands.
Additionally, if you’ve had trouble marketing a product, but you believe that it can provide a customer with plenty of value, bundling it into a kit will give it an opportunity to make an impression on the customer. After a customer has used the product, they may be more likely to purchase it on its own in the future, making the bundle an excellent marketing device that can lead to more individual sales in the future.
2. Kits Are Convenient
Many e-commerce stores also find kitting compatible with solid SKU management strategies. For every kit offered, it’s best practice to have a master SKU with a bill of materials that list the SKUs of the individual products or parts in the bundle. These SKUs make it easy for you to offer more products in your online selling channels such as eBay and Amazon without actually having to increase the number of inventory SKUs you need to carry in the warehouse. With the new SKUs, you can offer different combinations of your products.
Additionally, kitting fulfillment is much more convenient than having to sell products individually. Instead of having to take the time to package and sell items individually, you can put all of the products into one box that can be quickly shipped out to customers. Orders will be more consolidated, making it easier for staff to fulfill them.
For customers, kitting gives them a more streamlined shopping experience. Kitting is especially useful when a customer is looking for a gift for someone, but they don’t know what to get them. Even if the customer doesn’t have a clue what to get the recipient, they might know that they have an interest in golf or that they enjoy skincare products.
Instead of having to pick out a single item or several items that the customer doesn’t know if the person will enjoy, they can select a subscription box. With that form of kitting, the customer can be confident that their gift is going to provide the recipient with something that they enjoy.
As long as the customer knows an interest of the recipient, they can find a subscription box that will provide multiple gifts for the recipient. Product kitting helps to take the guesswork out of buying gifts, giving many a much more streamlined gift buying experience.
3. Reduce Your Packaging Costs
When you combine multiple items into a single package, you won’t have to spend the money purchasing separate packages or other types of materials. For example, when you ship a single item, you’ll need to put a label on it and place enough infill inside the package so the item doesn’t get damaged in the shipping process. Though these might seem like small costs, the more items you sell, the more these costs will add up over time.
By selling multiple products in a kit, you can ship them all in one box. Often, you can use a smaller amount of infill that you would have used for a single product, and you’ll only have to print out one label, no matter how many products are in the package.
Additionally, making kitting a staple at your company will reduce the amount of money you have to spend on individual boxes that are used in a large order. Some companies may take larger orders and ship them in one large box, but because they don’t have a kitting system in place, they end up still boxing each product individually within the larger package.
If the company had a kitting system in place, they would have reduced their shipping costs by having a large package available that every product could have fit safely in. Instead of taking the time to wrap and box up each individual item, they could have quickly placed all of the items in a single box.
By reducing packaging materials, you’ll save money and give yourself a wider profit margin. As you continue to lower your packaging costs, you can even increase customer satisfaction by making your products more affordable to purchase.
4. Lower Shipping Costs
Kitting can significantly lower shipping costs, making it very friendly to your bottom line. Instead of having to pay to ship individual items, you’ll be packaging and shipping them together in a single kit. By bundling items together, you reduce the shipping costs it takes to send multiple packages.
Additionally, for some lightweight items, you can reduce the standard dimensions of your packages by designing them specifically for bundled orders. By reducing the amount of packaging you have to use, you can save money on standard dimensional weight charges. Over time, lowering the weight of your packaging, even slightly, can add up to substantial savings.
In terms of warehouse kitting, being able to ship products quickly is incredibly important to a warehouse’s success. Warehouses are often the last step to kitting fulfillment, and workers there will appreciate the consistency of standardized kits. The products will always go into the same type of box, in the same order, unlike other bulk orders without kitting options where staff have to find a new way to package individual products together every time.
On top of being consistent in terms of how the boxes are packed, kitting also keeps the weight of shipped materials consistent. A package filled with random items will need to be weighed, but a kit will already have a predetermined weight. Your warehouse won’t have to weigh it, saving you time and getting your kits out faster. Since the kits are so similar, you can often print postage in bulk.
As the kits increase in popularity, you may be able to access volume discounts from the shipping company that you use. Due to the popularity of product kitting, you can likely expand your customer base and maximize your current one.
5. Improve Customer Satisfaction
Customers love the benefits that product kitting provides. For one, customers are more satisfied when they can get a deal on products. Selling a bundle of products, where each item is sold at a discount, will make customers have a positive view of your company. The more bundles and kitting that you offer will increase the satisfaction of many customers, especially ones who are always on the look for a great new deal.
Another way kitting improves customer satisfaction is that it makes it easy for them to purchase entire sets of products instead of having to look for them individually. This sort of convenience takes the stress out of shopping and ensures that customers are purchasing products that complement one another.
Kitting also appeals to customers who are looking to purchase gifts for others. Subscription boxes are all the rage these days and make for excellent gifts. When a company can offer similar products, customers are sure to appreciate the option.
One way to create dissatisfaction in your customers is not to have all of the items available that are included in the bundle. Sometimes, when companies don’t have a strong handle on their inventory, they may offer bundles that they can’t actually fulfill. Avoid this problem by using inventory management software.
Strategies to Improve Customer Satisfaction
When you make kitting a part of your company, you’ll want to try to improve customer experience and satisfaction continuously. Below are a few strategies to increase satisfaction among your customers:
- Offer customizability: Though companies will typically offer kits that are prearranged, you can separate yourself from the competition by allowing customers to customize kits to make them fit their needs. As customers search online, it can be frustrating for them to find a kit that has everything they want, except for one item, or to find a kit where they only want a couple of the items in the bundle and could do without the rest. Customizable kits solve this problem.
- Personalized products: Along with offering custom orders, you can take it a step further by offering personalized products within kits. A personalized product may have the customer’s name inscribed on it or have a custom image or message included on one of the products. Adding some personalization to your bundle makes the kit even more attractive to customers.
- Giveaway bundles: Customers love free stuff, and a giveaway bundle is a great way to improve customers’ satisfaction. Offer these bundles to customers in raffles that they have to sign up for or give them away as a reward once the customer reaches a certain number of purchases. Though you won’t make money on these bundles, they are a great way to improve customer loyalty.
- Sample bundles: If you want to try to get your customers to try out your new products and improve their view of the company, you can do so with free sample bundles. With these kits, you can send them smaller versions of your products to give them a taste of your current offerings. This sort of bundle can attract new business while also making customers feel valued.
- Product launch bundles: When you have a new product that you think customers are going to love, you can incentivize them to buy it by bundling it with other products that complement it. You can often see this form of bundling when the newest video game system comes out. The companies will usually offer a couple of games along with the console to incentivize people to buy. This extra value generates greater customer satisfaction.
How Inventory Management Software Can Help Kitting and Fulfillment
Kitting is an effective tool to move large amounts of inventory, make more money and cut down on costs. To make this process run as smoothly and efficiently as possible, you can use inventory management software.
With Finale Inventory’s software, you can increase the number of listing within your online selling channels by crafting kits and bundles to create a new product. After you’ve set up the kits in the system, the software will also help process the orders. As the kits are made up of individual products that have their own SKUs, a software system will be helpful in keeping track of products and parts being removed from inventory.
It also makes it easy to set up and keep track of kits that are only going to be offered for a set amount of time. For example, your company might want to be put together a holiday deal that will attract new business. With the software, you can quickly combine products and keep track of any sales in the system.
Want to Add Kitting and Inventory Management to Your Strategy?
If you’re ready to add kitting to your business strategy, you should pair it with an inventory management system to make it as efficient as possible.
Before you make a commitment, you can sign up for a free trial of Finale Inventory’s software. As you try the program, consider reviewing which plan is right for your company. If you have any questions, contact one of our trusted representatives at 888-792-8891.