How to Trim Fulfillment Costs Through Kitting
In e-commerce, as in all business, saving money and improving delivery times are always at the top of the “to-do” list. If you are a web-based business, kitting can help you do both. You will have to work on the specifics of e-commerce fulfillment, but in the end, you should realize savings in time and money.
What is Kitting?
This term simply refers to pre-packaging items into a kit, or bigger package, that is ready to ship. For example, if you are selling books online, you might have a BOGO (Buy One Get One) deal on two books in your inventory. They can still be sold separately, but it’s probably a good idea to pre-pack a number of kits with both books, based on your sales projections.This kit would then be given a different SKU than the individual books, which will make it easier to find in the stockroom and easierto track, because it isa single unit.Some commonly kitted items include product samples, games, books, videos, promotional items and more.
Single Units Enable Faster Assembly
When kits are made in bulk, it speeds up the e-commerce fulfillment process because you’re managing the making of just one kit, instead of working on a per-order basis and switching back and forth from picking and packaging a single book order to picking and packaging the BOGO books as a unit and getting them ready to ship.
Lessens Chances for Mistakes
By pre-packaging the unit, chances are reduced that fulfillment companies may pick and ship the wrong book. It’s more likely that all the books will be the correct ones. If a wrong book is picked, the kitting process should make it easy to spot because it won’t look like the others.Kitting also allows you to pre-print shipping labels because you will know the weight of the package beforehand. No need for individual weighing and labeling.
More Efficient Packaging
Because you’re pre-packaging, you will have time to work out more efficient ways to use the boxes themselves. You may be able to use smaller boxes or even have them custom-made for the product. That can help you realize savings in package size and weight, which translates into savings at the post office.
At times, you may be able to have the manufacturer kit products or kit parts of the product before sending them to the fulfillment company. That will depend on the storage space needed and whether the manufacturer is equipped with workers to handle kitting. If the maker is handling all of the production, this may be something they can offer. However, if you use more than one manufacturer, it may not be possible. In that case, you’re back to kitting yourself or having the fulfillment house kit it.
It’s always a good idea to talk to fulfillment companies and manufacturers about e-commerce fulfillment through kitting. Have them take a look at your order history and suggest ways you can save by kitting. Every product is different, so get in the habit of discussing options for each new product.