Startups and small business owners usually ask themselves whether they can save money if they are not shipping numerous orders every month. The answer to this question is a yes. Especially for startups, using order fulfillment for e-commerce businesses can be a huge cost-saver. Warehouse kitting is an effective way for e-commerce businesses to save expenses and time and also improve their inventory management. This guide explains the concept of warehouse kitting and provides information regarding how it could provide advantages to the e-commerce business, such as outsourcing the process to a 3PL provider.
Warehouse kitting involves taking multiple individual products and binding them together to develop a new SKU that the company can sell as a single article even though it involves different products. The company can accelerate the shipping process of the items by bundling them during the pre-assembling process. The usual process of fulfilling an order for individual products involves locating an item by using the SKU code in the warehouse management system. Under the kitting process, items that are bundled together to form a single unit are stored in the fulfillment center. The benefit of this system is that the e-commerce business can easily and quickly trace the bundled items and does not have to go through the lengthy process of assembling different products after the order placement.
Benefits of Warehouse Kitting for an E-commerce Business
Warehouse kitting provides numerous advantages to e-commerce businesses. These include:
Kitting is done during the pre-assembling stage. It enables the warehouses to complete the task of the order fulfillment process beforehand. As the products are bundled during the pre-assembling process, order fulfillment becomes easier and more efficient. Storing, packing, and shipping inventory becomes easier. Kitting boosts warehouse space and makes it more efficient overall, and reduces utility expenses.
Larger Sales and Reduced Shipping Costs
E-commerce businesses use kitting as a tool because it facilitates the retailers in offering more SKUs by combining single orders into larger ones. There are many ways the companies can attract their customers by making larger purchases. For instance, companies can offer discounted prices on certain items to encourage customers to purchase multiple products. It provides benefits to the companies in the form of larger sales and also lowers the average shipping costs.
Improved Customer Experience
Kitting improves customers’ experience as the most popular products are bundled together so that the customers do not have to go through the hassle of searching for the products individually. Kitting makes the order fulfillment process more streamlined and reduces the packing expenses by enabling the company to pack the items into a custom-sized box. It reduces the size and weight of the parcel, thereby saving material costs associated with packaging.
Warehouse kitting might be a simple tool; however, it’s a highly effective order fulfillment strategy. It helps e-commerce companies in saving time and money and makes the fulfillment operations simple, effective, and streamlined. Warehouse kitting is a value-added service.
However, it should not diminish its value, as kits can be just as vital to e-commerce fulfillment as other stages such as picking, packing, and shipping.