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What is Kitting? Learn About This Order Fulfillment Strategy

The processes and methods behind logistics are some of the most important, yet underappreciated parts of doing business in the modern world. In a marketplace where a large and growing amount of physical goods and services are being distributed throughout the world through mail and shipping, having a good logistics program is essential for any small business. Even though logistics used to seem like a very complicated and expensive process, learning how to master the art of shipping and distribution is essential for any small business or e-commerce company. 

Many times, logistics can be something that is very time and money intensive, and requires a lot of commitment and dedicated workers to get right. Therefore, a lot of companies are constantly on the lookout for ways to lower the costs of good logistics for their customers and company. Anything that can help to ease this process or make it cost less is something that can dramatically improve the processes and function of any company. This can lead to a much increased ability for small businesses to expand, and work simultaneously more efficiently and effectively. This is highly important for businesses of all sizes and functions, but can be especially valuable for smaller businesses with fewer resources, and more to lose. 

This is why many businesses and companies are turning to kitting as a solution to both increase their profits and decrease their costs. It helps companies to increase the efficiency of their logistics, and be able to viably sell to more markets. Kitting is a great solution for companies that manufacture multiple types of products, especially ones that generally have similarities. It is a very commonly used solution for companies that work in ecommerce, because it can have massive effects on the way that a business can make its money. This is what kitting is, and how it can help any modern business in its logistics practices. 

What is Kitting?

Fundamentally, kitting is the process of bundling together a group of items that would work well together in order to create a single bundled item that more comprehensively solves a customer’s needs. It happens when a warehouse or manufacturer has a group of items in their warehouse or production, and wants to find ways to distribute the whole group of items in a much easier and more efficient way. These kits are made up of items that could by all means be sold individually, but will compliment each other in many different ways when used together or in close proximity. Kitting is meant to work well for both the seller and the customer, by solving a larger group of problems in one singular transaction. 

When items are sold in groups, it allows them to be shipped together and distributed together. This makes it much easier and cheaper for companies to get their products to their customers, and allows them to potentially have a wider profit margin, because shipping items together costs less than shipping them separately. This also helps companies to sell their products at a much higher rate, because they can move them out in larger groups and quantities, rather than having to sell all of the products individually. This helps dramatically when there are some products that are taking up inventory space, and companies just need to get them out, and hopefully make a small profit on them. 

Kitting is used in a large variety of ways. For example, meal kits are popular because they combine a variety of ingredients and foods together, to be sold and consumed together as a more full meal. Some of these products may be products that aren’t often bought at a very high rate, but when combined, they are more likely to create more sales for the company. 

Another place that kitting is often used is through subscription box services. This takes place in a variety of contexts, but one specific example is in coffee subscription boxes. These boxes are often full of a variety of different flavors and types of coffee for customers to consume. They might not have purchased some of the individual types of coffee on their own, but when sold in a kit, these different types are much more likely to be purchased by consumers. The sort of bulk and undling mentality has a large impact on how customers open their options to include potentially unfamiliar products. 

It also helps companies and warehouses to clear up their inventory space, while saving money in the way that they distribute and sell their products. It makes the whole logistics process much more efficient, which can save lots of time and money for all parties involved. It is a process that has been adopted by a large number of different companies of all different sizes and types, and is potentially something that can positively impact any company. 

What are some of the Benefits of Kitting?

Kitting comes with many benefits, all of which have positive effects on the ways companies operate on a day to day basis. Kitting can help dramatically with the way that a company does many things, and can serve to help companies that work with large varieties of products, or are willing to work with similar companies to increase the overall efficiency of their sales. Kitting is something that can serve to greatly benefit a large variety of ecommerce businesses; these are some of the specific ways how. 

Quicker Shipping Processes

When a warehouse has to pack up and distribute lots of individual products, it can take a long time and a lot of effort. Kitting allows products to be shipped together, which lowers the amount of time that it takes for them logistics and warehousing to deal with shipping products. In a modern business world where time is money and efficiency is key, increasing the speed at which products are distributed from warehouses is a massively beneficial thing. 

Also, kitting products together can often make each step of the logistics process quicker and less subject to error, which can help customers to receive their order much quicker and more sustainably. This can lead to happier customers, which can in turn lead to higher sales and rates of return. The speed at which these orders can be put together and shipped can have a large list of positive effects on the ways that companies operate. 

Increased Sales and Lower Costs

When multiple products are combined within a single sellable product, they lead to higher levels of sales for a company. Multiple products that create revenue are being sold together, which means that the actual sales for the company are higher, leading to larger levels of income for the company. The combination of multiple smaller products creates products that are more expensive, which provides both a higher value for the customer, and a larger profit margin for the company. 

And because these products are being sold together, they can be packaged and shipped together. This will often result in the overall cost of the logistics being much lower, and when kitting is used over an extended period of time, it can lead to large savings in the costs of logistics. When products are combined and can be shipped together, it can lower the costs of distribution dramatically, and the savings can be passed onto both the consumers and the business at large. All in all, kitting has the potential to both increase sales and save costs for both the purchasers and sellers of the kitted goods. 

Increased Efficiency in Warehouses

A very beneficial part of kitting is that it promotes a much quicker and more efficient system for distributing groups of products. Instead of having to pack large quantities of separate products, kitting allows warehouse workers to combine products within the same packaging, and then ship them together. This can save a lot of time for warehouses, and lead to a much more effective way to ship products. Additionally, kitted products will often be placed near each other inside of warehouses, which can lead to a much quicker and more efficient process for picking and packing products. 

How Harper+Scott Can Help

The process of kitting and knowing how to create effective kits can be a very complicated process. Fundamentally, it’s a marketing process that requires a lot of knowledge about the customer base that the company is going for, and that makes it a fairly complicated process for many companies. That’s why Harper+Scott exists–to make sure that companies can know exactly what they need to do to appeal to their customer base. 

Harper+Scott has worked with a wide variety of different companies of all different sizes and kinds to help them to appeal to their customers, and have a more efficient marketing flow. For any consultation, marketing, and product decision needs, reach out to Harper+Scott right here

Sources

What is Kitting? | SOSInventory.com

The Benefits of Kitting: Improving Assembly Efficiency | Automation.com

Kitting Improves Productivity and Reduces Labor Costs | ManufacturingTomorrow.com.