Kitting 101: Reduce Fulfillment Costs & Increase Revenue

Kitting—offering multiple related products in a single package—rather than fulfilling single units can significantly benefit ecommerce sellers by reducing fulfillment costs and boosting revenue. In the competitive ecommerce marketplace, where every dollar saved on fulfillment impacts the bottom line, kitting offers a strategic advantage to increase your profit margins. Today, we’re diving into the logistical and financial benefits of kitting and how kits can support your ecommerce business.

1. Lower Fulfillment Costs
Shipping individual units can lead to higher fulfillment costs, especially if each product has to be picked, packed, and shipped separately. With kitting, you can reduce these costs:

• Fewer shipments: Kitting means less shipments for each individual item, resulting in lower shipping rates and reduced packaging supplies.
• Efficient handling: Fewer individual SKUs and orders lowers labor costs and speeds up order processing time.

2. Increase Revenue Through Higher Average Order Volume (AOV)
Kitting influences customers to spend more in a single purchase, driving up the average order value. Here’s how kitting can boost your revenue:

• Perceived value: Compared to buying each item individually, kits allow customers to buy multiple items for one discounted price—creating a perception of savings. This perceived value makes buying kits more attractive than purchasing multiple, single items.
• Purchase appeal: Kits are attractive to people looking to buy multiple items, but aren’t sure what to start with. Offering a kit with a discount makes that decision easier and increases the chances of a larger purchase.

3. Customer Satisfaction and Loyalty
Customers appreciate the convenience and savings that kitting offers. Selling kits saves consumers the time they would normally spend choosing complementary products, creating a more seamless online shopping experience.

• • Problem-solving solutions: Kits are a great way to target customers’ pain points. Selling kits that solve a problem relevant to your buyers leads to increased satisfaction and repeat purchases.
  • Kitting best-sellers: Including a popular product in a kit can drive interest and help bring exposure to other products you sell. This can influence customers to branch out and try new items, potentially discovering a new favorite.

The bottom line

Kitting has many cost benefits; it not only lowers fulfillment costs, but if done well, has the opportunity to boost revenue and customer loyalty. By combining products, you’re maximizing space, labor, and shipping efficiency which all contribute to total fulfillment costs. If you want to kit smarter, choose Phase V as your reliable 3PL partner. We specialize in kitting & assembly and subscription box fulfillment, so kitting is one of our strong suits.