Kitting in Logistics:
How to increase your e-commerce sales with product kits

As an e-commerce professional, you know that increasing sales and growing your business is hard work. One way to make your life easier and get more out of your ecommerce business is through kitting.

Whether you offer skin care kits for different skin types, starter kits for new customers to your fitness business or offer your products as a display in brick-and-mortar retail: When sold as a kit, your products generate more revenue for you without requiring you to spend significantly more.

The key is to combine products that offer real value to your customers. From a fulfillment perspective, it is also important to map kitting efficiently in logistics.

In this article, you will learn how kitting can improve your sales and how you, as an online retailer, can efficiently take advantage of the benefits of kitting in e-commerce.

The term “kitting” comes from the English word “kit”, or “set”. Kitting is the process of assembling multiple components into a set or finished product.

In manufacturing, this process describes the assembly and combination of products. But kitting also plays a critical role in e-commerce. You know best which of your products complement each other, and you can use that knowledge to create sets for specific audiences or occasions.

For example, offering a range of products that are often sold together can add real value and save your customers a lot of time. If you want to introduce a new line of products to the market or help new customers find their way around, try-out boxes and starter-kits help with that.

Kitting and bundling should not be confused. Visitors to your store may not see a difference: they are buying bundled products in both cases. But when you take a closer look at the logistics of bundling and kitting, the differences between the two processes become clear.

Bundles consist of different SKUs (stock keeping units) that are repackaged with each order. They often contain products that can be purchased separately. A kit, on the other hand, has its own SKU and, in many stores, consists of exclusive items that are only available as a set. Kits are also handled in fulfillment according to a defined process.

As a result, kits are less flexible than product bundles. But they have one important advantage: with kits, you know exactly what is inside, so you can use high-quality, customized packaging. This allows you to create a compelling unboxing experience without the hassle.

Kits allow you to be creative and assemble sets for different occasions and needs. The following examples show some of the options available for kitting in e-commerce. Which kit works best for which audience depends heavily on the online store, the industry, and the customer base.

• Subscription Boxes: Subscription boxes allow you to reap the benefits of kitting not just once, but on a regular basis. For example, if you sell cooking or book boxes by subscription, you can generate revenue at regular intervals while building customer loyalty.
• Cosmetics Sets: Do you sell lipsticks with matching lip liner and eye shadow? Or gel nail polish with a UV lamp and nail files? Sell kits of coordinated products and make it easier for your customers to shop your store.
• Sample Packs: Online food and beverage stores often offer sample kits to entice customers. New customers can either browse your extensive selection on their own using filters and the search function, or simply add a sample kit to their shopping cart and discover one kit at a time.
• Gift Sets: During the holiday season or other typical e-commerce peaks, customers are often grateful for gift inspiration. A gift set for a significant other or best friend will save your customers a lot of frustration and time, and increase your sales.
• Starter Kits: Beauty and fitness often require special accessories to achieve the best results. New customers will appreciate receiving a kit that includes everything they need to get started – including an insert with practical tips and inspiration to purchase additional products.
• Furniture Kits: Preassembled kits for shelves or other furniture are standard in the home furnishings industry. In addition to instructions, each kit contains all the shelves, side panels, screws, handles, hinges, and other parts needed to assemble.

Tip: Kits are a perfect complement to your e-commerce strategy. But don’t underestimate the logistics of kitting. Too many kits will overwhelm your fulfillment and your customers. Focus on a handful of select kits rather than having a kit for every situation. Because kits are designed to generate long-term sales, you should also be especially careful when selecting products and keeping a close eye on your customers’ needs.

The benefits of kitting are obvious from your customers’ point of view: they don’t have to look for several individual products and add them to their shopping cart, they only have to choose one set and save time when shopping. They also get high-quality kits that meet their needs.

But kitting also has benefits for online retailers:

1. 1. Selling product kits means that online merchants generate more revenue from each order than from a single product.
   2. Sending multiple products in a kit lowers the average shipping cost and eliminates additional packaging costs.
   3. When kits meet relevant needs, customer satisfaction increases.
   4. Kits save retailers time on packaging and accelerate shipping, which improves the customer experience.
   5. In contrast to bundles, which have to be recombined over and over again, the logistics processes for kits are clearly defined. They run more efficiently and with fewer errors.
   6. Kits generate fewer SKUs than bundles and minimize complexity in the warehouse.
   7. Kitting makes it possible to push items that are normally less visible to customers and that, as slow-moving items, threaten to create unnecessary costs in the warehouse.

Selling kits is particularly rewarding for companies that offer their products on a subscription basis, whose customers often buy the same products together, or whose items are made up of different components, as is often the case in the electronics or beauty industries.

To reap the benefits of kitting, however, you must first master the logistics of kitting – and the challenges it presents:

• Kitting reduces the complexity in the warehouse. However, the effort required to coordinate and manage inventory increases. This is especially true if you offer customization options for your subscription boxes.
• You’ll need transparency of all steps in the kitting process – especially if all needed kits have already been packed and are ready to be sent out on time (especially with subscription boxes).
• With or without kitting, products need to be in stock or reordered in a timely manner.
• You need to ensure that the kitting and shipping process is efficient.
• The challenge with subscription boxes is to ensure that they are shipped on time.
• The technological integration of kitting logistics with e-commerce systems must work seamlessly so that information about product availability, customer preferences, and all order details are accurate and up-to-date.
• If you want the unboxing experience to really wow your customers, you need to invest time and creativity in creating appropriate packaging designs.

If kitting is something you want to try or optimize, a fulfillment service provider can help. It’s important to work together to create a workflow for your kits and find the best kitting solution for your business and logistics.

Alaiko works with many experienced 3PL providers in this area and offers kitting logistics as a value-added service for your fulfillment.

Alaiko’s kitting functionality gives you transparency and control over the entire process, from monitoring inventory levels to assembling kits into an SKU and shipping the kits.

Shop managers can easily create kits and define custom packaging using Alaiko’s software, and keep an eye on packing pas well as order rocessing and lead times at all times. This ensures, for example, that subscription customers receive their kits on time.

Order information is automatically transferred to the warehouse and used for further processing. All stock levels can be tracked at any time in the Alaiko OS. If an item is about to run out, you will be notified and can reorder in time.

Alaiko also enables real-time synchronization of stock levels, so that stock levels are displayed correctly in the store, and automatically updates the order progress, so that customers and online retailers are always up to date when ordering kits. Queries between customers, the store and the warehouse are reduced to a minimum, as are human errors.

By handling the logistics of kitting with an experienced software partner like Alaiko, you achieve a high level of transparency and efficient automation throughout the entire kitting process.

Alaiko helps you reduce the complexity of managing sets in your inventory and generate more sales at the same time. After all, well-designed boxes can convince customers to spend a few more dollars when they can save time and immerse themselves in your product world immediately after unboxing.

The header image is by Karolina Grabwoska on Pexels.