1,300-word blog for Hive: 7 ways kitting benefits your business
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Discover how kitting works in logistics and how it can benefit your e-commerce business.
March 17, 2023
If you work in e-commerce, you might have heard terms like kitting services, bundling, containerizing, and confectioning. But what do these mean? In this blog post we will explore what kitting is, how it works, the difference between kits and bundles, and how it can benefit your business.
What is kitting in logistics? Kitting and fulfillment explained
In logistics, inventory kitting is an order fulfillment technique where, instead of picking and packing individual items as orders come in, two or more items are pre-assembled into ready-to-ship kits.
Kitting can reduce order fulfillment costs, increase revenue and improve your customer experience. Plus, it can boost average order value and help to shift slow-selling items. You’ll find out how in this blog post.
A kitting order is fulfilled based on available inventory. Each kit is assigned a unique stock keeping unit (SKU) number. Items are sent separately to the fulfillment center and are then kitted together before they are picked and packed. This can mean assembling two or more items together, or adding items to a specific kitting box with custom packaging.
Kitting is great for tasks like labeling and building boxed sets, but it can be used for so much more.
Examples of kitting
Creating a trial pack or gift box? Sending out subscription boxes? Putting together a set of daily supplements? Kitting is a great way to get creative with your order fulfillment strategy.
It's ideal in mass production, but kitting can be customized to create unique products for specific applications. That's why it's popular with online stores and other industries like supplements and cosmetics.
Let's say you sell daily skincare kits online. You can combine moisturizers, applicators, masks and any other necessary parts to give customers everything they need in one convenient package.
Perhaps you own a supplements business. You can create a kit that includes all the necessary vitamins for people with specific diets such as vegans.
Kitting glossary
To get to understand kitting a little better, it’s good to know what all the terms mean.
SKU
SKU stands for stock keeping unit and it is a number code used to identify products.
Final SKU
When items come into the fulfillment center to be kitted, the individual products may not necessarily have an SKU number, but the complete kit of the products together will be given a single SKU number, also known as a final SKU.
Pick and pack
Pick and pack is the process in the fulfillment center where items are taken from the picking shelves and put into picking boxes. From there they are taken to a packing station and packed ready for shipment. In the regular pick and pack process, there is less control over the unboxing experience as there is when pre-assembled kits.
Containerize
Containerizing has the same meaning as kitting and you may hear it used as a synonym.
Confectioning
This is another word that has the same meaning as kitting and can be used interchangeably.
Bundle
A bundle is not the same as kitting. Below is a more detailed description.
Kitting vs bundling: what is the difference?
Kitting and bundling are similar, but they are not identical. A kit is pre-assembled, whereas bundling can be different SKUs that are part of the same deal in your online shop, but they are not pre-assembled in the fulfillment center.
Both kits and bundles can help to increase your average order volume and simplify the fulfillment process, but kitting makes for a superior unboxing experience that you have more control over.
With kitting, you can combine the power of promotional products with high-impact custom packaging to showcase your brand. Plus, you can include personalized messaging to enhance the customer experience.
It is also a more targeted option. Let's say you sell night time skincare products. Instead of just putting three SKUs into a bland shipping box with no instructions, kitting can add a bit of style.
Bundling does not require special boxes, promotional inserts, or other similar items. Since bundling only requires putting previously established products together in a box, it will follow your typical packaging requirements, unlike kits.
Benefits of kitting
Kitting benefits both customers and ecommerce brands.
Benefits of kitting for your customers
Great value on sets
Offer deals on kits made of best-selling products to give your customers the products they love the most at a discount. Customers love a bargain. In fact, a recent study of 2,000 consumers by Hawk Incentives found that 97% of respondents shop for deals, with 92% saying they are 'always' looking for a bargain.
Faster ordering
Because the kitting process can combine your most popular products, or those needed for a certain routine together, customers don't have to spend time hunting for them and add them to their shopping carts individually.
Instead, the ordering and payment process is fast and hassle-free making for a great online store experience, and increasing the likelihood of a return visit.
Memorable unboxing experience
The unboxing experience is often the first touchpoint a customer has with your brand, and they like to feel that they matter.
Using unique packaging materials like branded boxes, aesthetic marketing inserts, personalized free samples and more as part of a kit, shows that you have put some thought and finesse into the shopping experience.
Benefits of kitting for e-commerce brands
Increase revenue and average order value (AOV)
Kitting is a powerful tool to help you to improve average order value (AOV). By offering kits of best-selling products you can tempt customers into spending more.
Deadstock rebranding opportunity
Got products that are hard to sell on their own? You can use kitting to shift more stock and increase exposure to generate demand.
Let's say for example you have an online business selling sewing needles and thread, but you're having trouble shifting them. Add them to a craft kit and suddenly they're flying off the shelves.
Improve order accuracy
Kitting minimizes the risk of picking the wrong item off the shelves because products are already packaged together beforehand, which can improve your order accuracy rate.
Value-adding fulfillment solution
Ultimately, kitting is a value-adding fulfillment solution because it achieves specific actions simultaneously. For example, it encourages customers to try new products, it clears out items that don't sell well on their own, and during seasonal events like Christmas, Black Friday, Singles Day and more, seasonal kits give you a creative way to sell more.
To reap the benefits of kitting, your ecommerce brand needs to be ready. You need a powerful workflow to create an exceptional order fulfillment experience.
How we do kitting at Hive
At Hive, we can manually kit your products together to help you experience all the benefits of kitting.
Creating kits at Hive is simple. Here is how it works in 5 simple steps:
1. Open the Hive App and click on “kitting” in the sidebar. Here you can see the overview of all your previous and current kitting requests.
2. Click on “Create a Kitting Order”
3. This will take you to “Kitting Order Details”. Here you can select which fulfillment center the kit should be in, what the final SKU will be, and how many kits you would like.
4. Click to move on to “Kitting Definition”: You can think of this like a recipe with ingredients and instructions. Add your component SKUs and instructions for how you would like your kit to be assembled.
You can add photos and videos for clarity.
5. Click on “Kitting Order Summary” to review your kitting request and send it to the Hive team to fulfill.
Work with a first-class 3PL partner to experience all the benefits of kitting
Kitting can hugely benefit you and your business, but you need a competent 3PL partner to ensure the process runs smoothly. Working with a company like Hive means that you can easily request and keep track of your kits in your all-in-one operations app.
