Imagine visiting an eCommerce website, looking to buy a moisturizer. You scroll a bit before you find the one that you like. But you also see that the store offers a package that includes three of those moisturizers for the price of two. What are you going to do?
Well, most people would buy the package instead of just one moisturizer. They would think: “Hey, this is a great opportunity to save money in the long run!”.
And this is what kitting and bundling are about: getting people to buy more in an effort to maximize profits.
But, before we explain the logistics behind them, let’s see what kitting and bundling are and their main benefits.
What are kitting and bundling?
Many people think kitting and bundling are the same, but there are some differences.
Kitting is basically creating a set of multiple different items in advance and selling them as one unit. A kit usually contains complimentary products, like a gift set with soap, a face mask, and bath salts.
The cost of the set may or may not be lower than the cost of the sum of individual items. This is because the purpose of kitting isn’t just to maximize your sales but also to speed up order fulfillment – a picker can pull the kit from the shelf as a single item rather than gather all the individual SKUs.
Bundling, on the other hand, is creating a set of the same items in advance and selling them as one unit. Unlike kitting, bundles nearly always offer a volume discount.
So, selling three different soaps is kitting, while selling a pack of three soaps that are the same at a discount is a bundle.
How are they beneficial for your business?
Here’s how kitting and bundling can help you maximize your profits:
1. Lowering the shipping costs.
Shipping multiple products in the same box is much more affordable than shipping them separately and there are two reasons for that.
First things first, if you’re shipping a large item, like a bicycle, your package might have a shipping surcharge called a dimensional weight charge (DIM). But you can also fit smaller items into the same box, such as a bell and a smartphone bar mount, without any extra shipping charge.
A second thing to keep in mind is that FedEx, UPS, and USPS all include a base per-package charge in their pricing. This means that you’ll have to pay this charge for each parcel. For instance, a 3-pack of moisturizer weighs more than one moisturizer, but the cost to ship the 3-pack won’t be three times as much.
2. Maximize your sales.
Kitting and bundling typically get people to buy more than what they initially planned.
For instance, a customer enters your online store planning to buy a spin mop. But, if you had a kit containing a spin mop with a couple of spin replacements and a microfiber cleaning cloth, your customer would realize they might need all that anyway.
This is especially useful for products that are new and aren’t being sold enough. People don’t like to take risks, but they’re more likely to buy something they haven’t tried yet if you include it in a kit, along with a popular item.
3. Simplify shopping.
At last, kitting can simplify shopping for customers, especially if they’re shopping for a gift.
Think about it: someone looking for the perfect gift not only needs to pick and combine the perfect items but also a gift bag or basket and wrap the gift. This takes a lot more effort than simply purchasing a pre-made kit that’s already packed and wrapped up.
The logistics behind kitting and bundling
Kitting and bundling can only work if you integrate the right processes into your warehouse and inventory management system.
When it comes to kitting, items that are included in the kits should have a unique SKU to ensure accuracy in the picking process. This doesn’t mean you need to offer these items as kits in your store – you can do it just for the purpose of improving fulfillment efficiency.
Similar rules go for bundling – we advise you to give bundles a new SKU. This will not only ensure a smooth picking process but will also help you manage pricing in your online store and track the quantities of your products.
Of course, you’ll need a good inventory management system, to begin with. It’s the key to a flexible kitting and bundling solution.
Kitting and bundling can not only maximize your profits but also increase customer satisfaction and allow them to shop easily and save money.
So, if you want to start creating bundles or kits, we advise you to first find an inventory management system that can work for your business. Once you have installed it, consult with the professionals and you’re good to go! For more about kitting, bundling, and other order fulfillment services, click here.