If you’re an eCommerce business owner, then you know that selling more SKUs is key to your success.
But stocking more products can be challenging, especially if you don’t have the space or resources to do so. That’s where inventory kitting comes in.
This guide will teach you everything you need to know about inventory kitting and how to use it to sell more products.
What is Inventory Kitting?
Inventory kitting, also called product bundling, is the process of grouping or packaging separate items together for sale. While the two terms have different meanings, they are often used interchangeably.
A game bundle might include a game system, two controllers, and a video game. A Valentine’s Day bundle might consist of a gold bracelet, a teddy bear, and a heart-shaped box of chocolates. A beauty bundle might include several different skin treatments, a jade eye roller, and a spa headband. Or, a bundle might just offer customers a discount for purchasing a higher quantity, such as a bundle of 24 cans of cat food.
For example, if you sell bike parts, you could sell a kit that includes a frame, pedals, and handlebars.
While each individual item may have its own SKU, they can be kitted together into a new SKU that’s sold as one entity comprised of individual items.
Typically, when a customer buys a kitted or bundled item, your inventory management software will automatically link each individual product to that sale.
Customers like kits and bundles because they usually offer cost savings over purchasing individual items and can save them time. Also, some products like those listed above naturally lend themselves to being kitted.
Kitting vs. Bundling
When it comes to product packaging, there are two main approaches: kitting and bundling.
Both have advantages, but choosing the best options for your business is essential.
Kitting involves packaging together all the components of a product so that it’s ready to use. This is often used for products that require assembly, such as furniture or toys.
Bundling, on the other hand, involves grouping similar products together so they can be sold at a discount. This is a popular option for businesses that sell multiple products, such as clothing or cosmetics.
So, which is the right approach for your eCommerce store?
It depends on your products and your target market.
Kitting may be the best option if you sell products requiring assembly.
If you want to offer discounts on multiple products, bundling may be the way to go. Ultimately, it’s up to you to decide which approach will work best for your business.
Benefits of Inventory Kitting and Bundling
eCommerce retailers love product kitting and bundling because it:
- Drives sales and increases revenue
- Offers customers convenience
- Creates new interest in old products
- Helps you to organize your inventory
- Gives the opportunity to create special editions, etc.
- Moves more stock off the shelf
- Helps to control overhead costs
- Speeds up the shipping process
- Increases repeat sales from customers, and
- Allows you to move slower-selling merchandise by packaging it with popular items.
You may prefer your warehouse employees to pre-assemble the kits so your company can ship them as quickly as the order is received. This time-saver eliminates the need to individually pick, pack and ship each product, and can speed up your shipping time to your customer.
Why is Kitting Important?
Although every eCommerce business is unique, the key benefits of kitting translate across a variety of different industries. Kitting increases your average transaction value and encourages repeat business. Kitting can reduce labor and storage costs and help you move inventory more quickly.
- Kitting increases your average transaction. Kitted products encourage your customers to buy more than one item at a discount. You can also offer your customers the option to increase their orders to a higher quantity to receive a discount. When your customers are provided the opportunity to save money, they’ll often buy more.
- Kitting increases your customer satisfaction. Kitting can help drive subscriptions and introduce your customers to new items. Happy customers may become repeat customers.
- Kitting helps eliminate dead stock. If a company has a product that has not moved or is slow moving, you can include it in a product bundle to both introduce it to new customers and move it off your shelves.
- Bundling your products reduces your costs. Your business can save both time and money by bundling your products or components. Kitting helps your eCommerce business to keep its overhead low, freeing up resources you can then reinvest back into your business.
- Kitting provides new marketing opportunities. Kitting creates more products in your store and gives your customers more reasons to buy them. This leads to new marketing opportunities and referral sources.
How Does Kitting Work?
Typically, your warehouse team will pre-assemble your kits or bundles in the vicinity of your fulfillment area.
Workers collect a predetermined quantity of each item to be included in the kit and bring them to the space in your warehouse, where they’ll be assembled and packaged in preparation for shipment and scanned into your inventory management software.
While some eCommerce retailers prefer to kit their bundled products before receiving orders, others may choose to bundle and assemble kits as needed.
Challenges of Inventory Kitting
While kitting has many advantages, there are some challenges with kitting you may want to consider.
First, you’ll need to make sure that you and your crew have a clear understanding of the kitting process before starting. Are you pre-packaging the items together? Are there elements that will need to be built or assembled? Are there any additional shipping considerations?
Second, consider whether or not your kits will require additional or special storage space.
Third, make sure your inventory management software supports bundling.
Fourth, are all the items in your bundle held in the same warehouse? Or different facilities? How will you ensure your customer receives their bundled items at the same time?
Finally, consider whether or not your kits will require special packaging materials or specific equipment.
Once you’ve carefully thought through the logistics of kitting, you’re ready to get started.
Kitting and Assembly
Both kitting and bundling can be great ways to increase your average order value and improve customer satisfaction. But they can also be time-consuming and frustrating if you don’t have an effective system in place.
Luckily, there are a few steps you can take to streamline the kitting and bundling process in your eCommerce store.
First, take some time to plan out your kit designs. This will help you determine which products need to go together and how best to package them.
Next, assign a new SKU number to the product kit or bundle.
Finally, invest in suitable packaging materials and ensure your product bundle or kit arrives in one piece. This will save you time and frustration in the long run.
By following these simple steps, you’ll be able to kit and bundle products like a pro!
Products Great For Kitting
When kitting and bundling products in your eCommerce store, there are a few things to consider.
The first is what products work well together. You want to choose products that complement each other and add value to the customer. For example, if you sell beauty products, you might bundle a lip balm with lipstick.
The second thing to consider is the packaging. You want to ensure the packaging is sturdy and attractive so it will stand up to shipping.
And finally, you want to price the kit or bundle competitively. By offering a discount on bundled products, you can attract more customers and boost sales.
With these tips in mind, you can create kits and bundles that are both profitable and appealing to customers.
Top-selling product kits and bundles include:
- Samples of products. Whether you’re selling skin care or tea, customers love collections of sample sizes.
- Subscription boxes. Subscription boxes of all kinds are wildly popular with customers and businesses alike.
- Giveaways. A giveaway prize bundle can help you to build loyalty and goodwill with your customers.
- Personalized products. These bundles can be as personalized as you choose – from a “personalized” dry skin product bundle to a collection of “Stay calm and let Mike handle it” coffee mugs, pens, and mouse pads.
- Limited edition bundles. Game manufacturers have perfected the art of the game bundle, but it can work for your business too. Upsell your most sought-after products by creating limited edition bundles around them.
- Basic bundles. Basic bundles allow you to offer customers a discount by including multiples of the same item in a single bundle for a discount.
- Seasonal and holiday. These gift basket bundles are extremely popular with busy gift-givers who appreciate the convenience and want to ensure their recipient has everything they need to properly enjoy the gift.
- Mix-and-Match bundles. These bundles allow customers to create their own bundles from a predetermined collection of products.
- Assembled product bundles. Assembled product bundles allow your customer to customize their own options and upgrades, such as more memory or a fancy case, for a product such as a computer, which is then assembled in your warehouse and shipped to the customer.
- Inventory clearance bundling. Make old products interesting again by bundling them with top sellers or other like items.
- New product bundling. People are often more willing to try a new product if they get a deal on a product (or products) they already know.
- Buy-one-get-one packages. These are popular with customers looking to save money and businesses looking to clear inventory.
- Cross-sell bundles. These bundles allow you to pair products that go well together, such as a wine subscription box you cross-sell with a charcuterie bundle.
How Inventory Management Software Can Help
Kitting and bundling products together can significantly increase average order value and encourage customers to buy more of what you’re selling.
However, managing inventory for kitted and bundled products can be a challenge, especially if you’re selling online. That’s where inventory management software, like SkuVault, comes in.
Inventory management software can help you keep track of the individual components that make up each kit or bundle, as well as the finished products themselves.
This can help you avoid overselling or running out of stock, both of which can frustrate customers and damage your bottom line.
In addition, inventory management software can help you automate the process of kitting and bundling, making it much easier and faster to get your products out the door.
So, if you’re looking for a way to increase your revenue with bundled and kitted products and streamline your eCommerce operation, investing in inventory management software is a great place to start.
Inventory management software can help you to:
- Keep track of your orders, stock on hand, and barcodes,
- Track your employee hours and performance.
- Simplify your labeling and tracking
- Forecast your sales
- Track your best and lowest-selling inventory
- Get real-time updates on your inventory across multiple sales channels
- Improve productivity and efficiency across your entire eCommerce business, from production and sales to your accounting and payroll.
Final Thoughts
Inventory kitting and bundling can help you sell more SKUs by making the purchase process easier for your customers.
In this guide, we’ve explained what inventory kitting and bundling are, how they work, and some of the benefits of using these sales techniques.
If you’re looking for a way to increase sales without adding more work to your plate, consider implementing inventory kitting and bundling into your business strategy.
SkuVault’s inventory management software can help make the process simpler and less time-consuming. Learn more about how our software can help you to earn more from kitting your products.
