Quick Definition: Combining like or similar products together to sell as a package.
What Is Kitting & Bundling?
Kitting & bundling is the practice in which online sellers offer similar or identical products together in the same listing to create more value for the consumer. This creates value for both the seller and the consumer and can help to improve the profitability of your business. Kitting & bundling is one of the most important skills that an online seller can develop. If you can combine your items in meaningful ways you can keep your costs down while providing value to your end-users.
How Do I Decide If Kitting & Bundling Is For Me?
When deciding what items are good for kitting & bundling, it is important to consider a few factors. It is important to think what would your customer want to purchase as a set or as a complementary item. You can then offer these together and save the customer time and money. This will create a unique offering that will set your business apart from your competition and provide value to the customer. Another thing to think about is how much your shipping will increase when you combined the two or more items. The idea is to minimize the increase in shipping to offset your costs in order to make more money at a lower price. If you can add additional items for a few cents more or even a few dollars more depending on the value of that item(s), they could be a good candidate for kitting.
How Can I Make More Money With Kitting & Bundling?
Kitting & bundling has the ability to greatly increase the number of products in your catalog and your profitability. The power of kitting and bundling is in its limitless ability to create value in things you already have. For example if you have three items you can make limitless kits (E.g. AAA, AB, ABC, ABCC, BBCC, C, etc.). You are only limited by your imagination and your customer base. You will also be taking up more digital real-estate creating more touch points where potential customers can interact with your brand. Combining products together into these kits saves your company money in shipping. Reducing costs is a way to increase profitability that is often overlooked in businesses. Most of the time it is cheaper to send two items in the same package than to send them separately. In summary, it's best to sell more products on more lists and decrease shipping costs all at the same time through the power of kitting & bundling.
This Sounds Great, But Can You Give Me A Real World Example?
A great example of how to create value by kitting would be to offer two products that are used together often. Say for example, a generic screwdriver and a set of screw bits. Apart, these items have very little value on their own. The screwdriver might sell for $6.99 and the set of screw bits might sell for $3.99. Selling these separately by the time you pay for shipping for these items there is little left for profit. However when you combine these items you can offer them for $9.99. The customer saves $0.98 and you save more in shipping costs. This takes two previously lower margin products and creates a profitable and sustainable set to add to your catalog.
How Do I Fulfill Kits & Bundles When They Sell?
Kitting & bundling can be done at the pick or before the sale. There are many services that will pre-build your kits prior to you offering them for sale. This often requires the use of various equipment and additional supplies. These services can be a great option if you are using FBA. If your 3PL doesn’t have the ability to kit during the packing process, or if your order management software can’t handling kitting & bundling, many 3PLs have the ability to kit your items during the packing step of the fulfillment process. Your orders come in as individual SKUs for the picker and the kit is assembled at the packing station. Shipmate Fulfillment is able to use either method depending on what is right for your business.