What is Kitting?
Kitting is a process where multiple single products are bundled into one unit of sale. It is marketed to solve a specific customer problem and earn higher order value. Subscription boxes are one form of inventory kitting that has been very successful recently.
Significance of Kitting in an E-commerce Shipping and Delivery
Kitting allows a brand to open avenues for newer products in the market and promotes new marketing channels. It increases net profits and offers additional benefits such as:
- Higher order value: Instead of selling a single product, a brand can create a specific package through kitting. It allows them to sell more products in one go, thus increasing the order value.
- Reduced shipping cost: The traditional model required shopping companies to ship each product separately. Through kitting, pre-assembled packages are sent from the seller. It negates the need to import multiple products individually, thus significantly reducing the shipping cost.
How Kitting Works and Prerequisites for Kitting
The prerequisites of kitting require a company to have an offering where several products are needed. Once the mentioned requirement is fulfilled, kitting can be accomplished in two steps.
- Stock Keeping Unit (SKU) allocation: All the products are assembled, packaged, and a unique SKU is allocated.
- Dispatch: The completed package is then handed to the shipping company for delivery.
Use Case With Kitting
For example, a cosmetic company wants to sell its customer a hair-care package. Therefore, they assemble products like shampoo, conditioner, and sea salt spray in one package. After kitting, the parcel is handed over to the shipping company, then shipped to the customer. Another famous example of kitting is subscription boxes. In both cases, the companies will save on shipping costs and be able to sell more products in one go.