Many consumers favor online shopping because of the convenience it offers. These days, you can purchase so many of the things you need from the comfort of your own home. A myriad of consumer goods is just a click away, and consumers can often receive them very quickly after making a purchase thanks to the efficient order fulfillment processes of many eCommerce retailers.
However, the typical consumer probably doesn’t realize the tremendous amount of work and meticulous planning that occur behind the scenes to ensure the fulfillment process runs like clockwork.
One of the biggest fulfillment challenges that large online retailers face is the huge volume of orders they receive on a daily basis—presenting major logistical challenges. To minimize overhead costs, optimize inventory management, and improve overall operational efficiency, retailers often rely on third-party service providers to handle their order fulfillment and kitting operations.
What is kitting?
Kitting is a process in which individual but related items are picked from inventory and assembled in kits before they are shipped. The degree of complexity can vary depending on a company’s needs. Sometimes, retailers employ high-touch packaging strategies that require the creation of customized or personalized kits for consumers.
Kits are typically sold as unique stock keeping units (SKUs). For instance, an online bookseller might want to create gift boxes containing all seven books of the Harry Potter series. The books are usually sold separately as individual SKUs, but the gift sets will be stocked, tracked and sold as new, unique SKUs.
Because kits contain multiple items, kitting can help tremendously in inventory management. It streamlines a retailer’s operations by reducing the number of SKUs that must be managed and tracked. Kitting also helps reduce the number of individual items or components that must be pulled from the inventory every day.
Why outsource your kitting operations?
Partnering with a third-party service provider to handle your kitting requirements offers a number of benefits, including:
- Eliminating warehousing costs – When you outsource your kitting and order fulfillment operations, your inventory warehousing requirements can be handled by the service provider in its own facility. This eliminates the need for you to spend money on warehousing space.
- Reducing labor costs – Your business can concentrate on acquiring new personnel for other important facets of your operations, instead of maintaining a facility and labor force to handle your kitting tasks.
- Scalability – Whether you need to manage seasonal surges in order volumes or rising sales resulting from business growth, a professional kitting services provider can help improve your flexibility and agility. A third-party provider has dedicated resources and manpower that can be immediately allocated to handling your increasing order volumes.
- Time savings – Consumers want their orders delivered as quickly as possible. Experienced service providers have the technological and logistical infrastructure necessary to quickly respond to new orders, allowing you to get products to your customers without delay.
- Professional kit design – Outsourcing your kitting operations to a third-party service provider allows you to tap its expertise in producing kits that require varying degrees of customization and personalization. This way, you’ll be able to quickly produce kits that reflect the experience you want customers to have with your brand.
Typically, service providers work closely with retailers to assess their needs and develop a kitting strategy and process tailored to their business. You simply need to outline your goals from the start to ensure your service provider’s approach is aligned with your requirements.