Customers get more value in the long run when the companies adopt a process that successfully groups products together. Product kitting and bundling are essentially the assembling and packaging of several complementary product units sold together for ease of customer ordering and at a lower price than they would pay for buying the same items individually.
Companies that use this approach often generate higher sales than those that do not, because kitting and bundling creates a greater perceived value for consumers. But how are the two processes different?
Kitting is a broad term used in the field of fulfilling orders that refers to the process of inventory being picked, packaged and supplied together under one part number. Kitting services can be used for packaged sets, subscription boxes, pre-assembled boxes, aftermarket spare parts bundles, machine maintenance kits, marketing materials, training/sales materials, packaged-to-order sets and more across a wide range of industries.
Kitting products in such a way requires a union of several SKUs (or stock-keeping units—essentially smaller, component products) to form a single product or finished set (e.g., a repair or maintenance kit). Kitting is performed when an order requires fulfillment center staff to arrange items in such a way that several components are obtained and assembled during inventory delivery.
In contrast, a bundled SKU is not a real product in itself, but a grouping that includes two or more items. A bundle contains a set of things that are shipped together, such as clothing, food or various complementary accessories.
Bundles have a "master" storage unit that is a single product with all components in one container. A good example of product bundling is a McDonald's Happy Meal, which is convenient for customers and helps the company sell more of the items included than the items offered individually.
Kitting in Inventory Management
In order to successfully implement a kitting process flow, warehouse management systems and a skilled team carefully track and manage the individual inventory items needed in each kit. When SKUs are assigned to a kit by merging items in the warehouse management system, the software ensures that accurate inventory records are maintained.
If one of your inventory management goals is to increase sales, a good starting point is to assess how your products sell and see if product kitting is right for your company. As with most inventory management strategies, experts in assembly, kitting and packaging can help you develop a customized solution that creates value for your company and your customers.
Who Are the Leaders in Kitting?
At NewStream Enterprises, LLC, we value strong relationships, and treat our kitting customers as extensions of our own company. We have a bottom-up approach and employee owners who have a vested interest in servicing our partners and improving their business as well as ours. Brands find that our skilled warehouse team easily integrates into their processes and that the expertise we provide becomes an invaluable asset.
Kitting is a great way for businesses to offer convenient product groupings while still making it easy to track inventory and reduce associated costs. If you’re interested in learning more about the benefits of kitting, contact one of our helpful experts today.