25 Mar Drive Profits by Kitting
Kitting can make your customers happy and keep your fulfillment costs down. Of course, kitting is the practice of combining multiple products into a single package for the purposes of sales, logistics and fulfillment.
Kitting is good for sales; it encourages your customers to buy multiple products at once, often in exchange for a small discount. Often, companies combine a low-margin product that is in high-demand with several high-margin accessories. The result is a package that moves the accessories with only a small hit to their high-margin status. Some examples include kitting of cellular phones with cases and earphones, and kitting of laptop computers with cases and screen protectors.
Kitting is also good for your logistical costs. Combining items into a kit creates a multiple-SKU package into a single-SKU item. Combining items into a single SKU reduces your pick-and-pack costs, as well as the risk of errors. For instance, three books would normally incur pick-and-pack charges associated with three items; combining them into a kit reduces the charges to those associated with a single SKU. You can even design a custom box to minimize the weight and size of a high-volume kit. You can use your improved cost structure to drive sales or improve your profit margins.
Packing items into kits helps you to provide on-time fulfillment during high-demand periods like Christmas. Kits can be prepared and made ready to ship months ahead of time. Reducing fulfillment-related risk allows you to focus on other issues during the most crucial time of the year.
Kitting can be a valuable way of driving sales of high-margin items while reducing fulfillment costs. Please contact us to begin devising an appropriate kitting plan.