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ECommerce on Shopify - What is Kitting?

Kitting is a powerful strategy for eCommerce brands. It can help boost average order value, move less-popular products, and amplify customer satisfaction.

We’ve all been there – a minor scrape or bump on the skin sends us running for our trusty first aid kit, complete with bandages, tweezers, alcohol wipes, and more. This is what product bundling is all about.

What is kitting?

The kitting process involves combining separate but related products into a single package and shipping them together as one unit. This allows businesses to offer a better value for their customers, while also streamlining order fulfillment and reducing warehouse costs. This is a popular strategy for subscription boxes, assembled products, and eCommerce retailers with a large number of product options.

The goal of product bundling is to increase average order value (AOV) and drive customer loyalty through a unique unboxing experience. For example, a cosmetic company may offer a bundle of their best-selling products with a limited-time free sample to encourage customers to buy more. This is a great way to boost sales without devaluing your top-selling items or making them less appealing to the market.

For some companies, kitting is the preferred method of inventory management, especially if they have multiple locations or multiple production processes. For these businesses, kitting provides the ability to keep track of the individual components of each product to ensure that they are ready for distribution. This can be done through a software solution like Katana, which is specifically designed for this type of workflow. It helps streamline the workflow of manufacturing, warehousing, and shipping by offering a visual platform that lets you see everything in the pipeline at once.

Kitting can be done in-house by a company’s employees or outsourced to a third-party logistics (3PL) provider. A 3PL that specializes in eCommerce fulfillment is able to provide services such as warehousing, picking and packing, and shipping — all of which can be integrated seamlessly with Shopify. This helps companies save time and money by reducing manual labor and optimizing their warehouse space.

Another benefit of kitting is that it can help move slow-moving or seasonal inventory. For example, a beauty company may bundle a popular moisturizer with some late-season eyeshadow colors in order to get rid of them faster. Boosting sales and getting rid of older inventory, helps companies reduce overhead and make room for new merchandise.

What is the process of kitting?

Kitting is an inventory management technique that combines different products into a package to be shipped as one parcel. This process allows merchants to increase sales, decrease business costs, and optimize warehouse space. This is especially important for subscription commerce services.

For example, a beauty brand might sell a makeup palette and two brushes together to create a set. This is a great way to encourage customers to purchase more than they originally planned. Alternatively, an online retailer might offer a bundle that includes a few items to help the customer save money and time on shipping. Bundles are an effective marketing strategy for both brick-and-mortar and eCommerce retailers to increase average order value, drive conversions, and make their fulfillment processes faster.

There are many different ways to create product bundles. You can bundle products based on size, price, or functionality. For example, a skincare brand might offer a discounted bundle that includes an exfoliator, mask, and moisturizer to incentivize shoppers to buy more than they originally intended. You can also use product bundling to create a limited-time offer or holiday promotion. For example, a beauty brand might launch a Christmas bundle to celebrate the season.

Another popular type of product bundle is the subscription box. Subscription boxes have become a popular and effective way for businesses to increase average order values and drive conversions. For example, a subscription beauty box might include an assortment of face masks and hand creams that are perfect for the holiday season. In addition, subscription boxes can also be a great way to increase retention rates and increase brand loyalty.

The most important thing to remember when creating product bundles is that you must ensure that each individual component of the kit is in stock. Otherwise, you risk overselling or underselling your products. To avoid this, you should pre-assemble kits to be ready for shipment when they are ordered. This can be done by using an app or by manually combining products in your warehouse before shipping them to the customer. This will prevent unnecessary delays in the fulfillment process and ensure that your customers receive their purchases on time.

What is the difference between kitting and bundling?

Kitting and bundling are often confused or used interchangeably, but they are very different concepts. While both involve grouping products together and listing them as one SKU, kitting is a proactive process that involves collecting the individual items into a package before orders come in, whereas bundling refers to picking the items from inventory after an order has been placed.

Kitting is a great option for products that customers typically purchase together, such as a knife set with different knives or a set of drinking glasses. This encourages higher purchases and increases the average order value. It also saves time and money on fulfillment costs by allowing warehouse staff to quickly locate the items for shipment.

Another benefit of kitting is that it can be a great way to offload slow-moving inventory. By combining slow-selling goods with high-demand items, it’s easier to get rid of the slower stock and still sell the popular product. This strategy is especially useful for businesses that sell on multiple channels.

The last benefit of kitting is that it can help businesses save on shipping costs. By putting several large or heavy items into a single package, it may be possible to avoid a dimensional weight surcharge that would otherwise be charged to the customer.

Kitting can be a powerful tool for eCommerce businesses. By taking the time to proactively gather similar products together, it’s easy to create new packaging options that can increase sales and reduce fulfillment and shipping costs. By using a third-party fulfillment partner, it’s even easier to streamline the process and focus on growing your business.

How can I use kitting in my eCommerce store?

Product bundling is a powerful way to increase average order value (AOV) and introduce new or overlooked products to your customers. Bundling can also streamline various important procedures and lower expenses associated with manufacturing, storage, and distribution.

Kitting involves grouping together and packaging two or more related items and selling them as one combined product for sale in your eCommerce store. For example, a furniture brand might sell a sofa set complete with pillows and blankets, while a beauty company might bundle a facial cleanser with a moisturizer. Bundling can also be a good way to spur sales of slow-moving or dead inventory, such as an older moisturizer with a newly launched face wipe.

In addition to increasing AOV and decreasing shipping costs, there are several other benefits of using kitting in your eCommerce store. Kitting can help you optimize the physical space needed for storing your inventory by combining multiple items into one package, allowing you to fit more into less space. This may save you money on rent, which can be especially useful for small businesses with limited budgets. Kitting can also make it easier to assemble packages for fulfillment, which will speed up the process and reduce human error.

Lastly, kitting can help you reduce the weight of your packages and thus cut delivery costs. This is particularly beneficial if your products are large or heavy. By preassembling items into a package, you can eliminate the need for additional infill or void fill and minimize your shipping costs. Kitting can also reduce the number of items your customers need to receive, which will decrease your customer returns and improve overall satisfaction levels.

Whether you are physically or virtually bundling your products, it's crucial to use a warehouse management system that can handle your inventory and fulfillment processes. Skew Savvy, for example, offers a full suite of warehouse management tools for direct-to-consumer brands that can manage all aspects of your inventory and fulfillment. To learn more about how you can leverage our solution to grow your business, sign up for a free account today.

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