A service widely offered by third-party logistics companies, kitting remains widely unknown among the general public. The results of kitting, however, are regularly enjoyed by millions of people.
Like warehousing and shipping, kitting is a key piece of the overall logistics puzzle for many e-commerce businesses. Simply defined, kitting involves combining multiple products into one retail unit or “kit” that is shipped to the consumer as a single package. Kitting has been used quite effectively by companies that sell and distribute subscription boxes that contain a variety of related but separate items.
Advantages of Kitting
Kitting has proven a highly effective logistics strategy for a range of e-commerce companies. Here are just a few of its benefits:
Expand the market for existing inventory – Kitting is a great merchandising approach that creates new sales avenues for available inventory items. And because it combines multiple items that tend to serve a common purpose, kitting can significantly reduce inventory problems for final customers as well.
Streamline the fulfillment processes – Kitting operations encompass a broad spectrum of fulfillment services. A good third-party logistics company can severely simplify your logistics operations by locating the products, assembling the kit, packing it for distribution, and shipping each order.
Lower your storage and shipping costs – Because it combines several existing items into one unified package, kitting can extend your inventory while saving you in terms of warehousing costs. Warehouses charge for shelf space, and a kit containing multiple items simply takes up less space than shelving those single items alone. The kit also promotes easy inventory management because it is tracked via a single SKU (stock keeping unit). Furthermore, a kit ships as a single unit, allowing you to significantly cut your overall shipping budget.
Fulfill orders more quickly – Picking, packing, and shipping several products can take considerable amounts of time. Through kitting, these various steps can be conducted more rapidly and with fewer risks of error. This ultimately results in happier customers who receive their orders right away.
Lower your labor costs – Smaller businesses, which typically find in-house assembly costs extremely prohibitive, can benefit greatly from third-party logistics kitting operations that employ a streamlined warehouse flow. Because each order requires less time to process, you don’t need as many man-hours to fulfill orders, which reduces the need for additional staff or overtime expenses.
Manage volume surges – The streamlined nature of the kitting process can also increase your ability to deal with dramatic swings in product demand. Expanding or constricting output volume is easier when base kits are pre-assembled and ready to go.
For More Information
To learn more about kitting and its various benefits, contact a logistics expert at American Warehouse, Inc. today. From its headquarters in New Hampshire, American Warehouse, Inc. offers a wide range of warehousing, distribution, and fulfillment solutions to meet the unique and specific needs of small businesses and international leaders alike.