Kitting plays a critical role in how businesses manage inventory, fulfill orders, and increase profitability. Whether you run an eCommerce operation or a manufacturing floor, understanding how kitting works- and how to implement it with the right software – can streamline your workflows and boost your bottom line. This guide covers what inventory kitting is, why it matters, and how to put it into practice across different business models.
Key Takeaways
- Kitting bundles multiple products or components into a single SKU, automatically deducting all included items from inventory when the kit is ordered.
- Manufacturers use kitting to expand storage capacity, move inventory faster, and reduce labor overhead through automated tracking of stock, orders, and barcodes.
- eCommerce businesses leverage kitting to streamline subscription boxes, cross-sell complementary products, and increase average order value through bundled discounts.
- Kitting software simplifies labeling, provides real-time inventory tracking, and enables sales forecasting to identify which products to bundle together.
What Is Kitting?
Kitting is the process of bundling multiple products or components—typically sold separately—into a single SKU or package for sale, assembly, or fulfillment. When a kit is ordered, the inventory management system automatically deducts all included items from stock as one transaction. This approach works for both eCommerce and manufacturing operations.
Why Is Kitting Important?
Kitting matters because it increases product value, encourages repeat purchases, and improves operational efficiency. Manufacturers can reduce labor overhead, simplify storage, and turn inventory faster. The right kitting software ties these benefits together across production, sales, and accounting.
Benefits of Kitting
- Higher order value: Offer bundled discounts that encourage customers to buy more.
- Dead stock reduction: Move slow-selling products by bundling them with popular items.
- Lower costs: Save time and labor, freeing up funds for other investments.
- Customer loyalty: Happy customers return – and kitting supports subscription models.
Kitting Software Functionality
- Simplified labeling: Generate one label for multiple items in a kit.
- Real-time inventory tracking: Keep accounting updated automatically.
- Sales forecasting: Identify top sellers and slow movers for smarter bundling.
- Cross-sell categories: Introduce new products by pairing them with popular ones.
Your inventory software can incorporate quantity-based discounts for select items. Common discount structures include:
- Buy two t-shirts, get the third 50% off
- Purchase a shirt and receive a complementary bag at a discount
The system processes all items as one order, saving time at checkout and fulfillment.
For manufacturers, you can offer your customers a higher quantity of items at discounted rates. A kitting software management system can keep track of stock on hand, orders, and barcodes, and even track employee hours, sales, and performance.
The Benefits of Kitting for Manufacturing
Manufacturers use kitting to expand current space, move inventory, and increase cash flow, contributing overall to productivity for the business. The result is a more optimized business model with streamlined inventory logistics. To help manage the logistics of kitting, there are software solutions that account for kitted items. The software can help any company, large or small, manage their inventory, manufacturing batches, product tracking, and purchase orders.
ABC Business is a B2B beverage manufacturer that experienced rapid growth and leased a secondary warehouse for ingredient storage. When a customer order enters the system, the kitted ingredients automatically ship to the central warehouse for production and distribution.
The Benefits of Kitting for eCommerce
For direct-to-consumer sales, kitting streamlines special offers and subscription boxes. Components stay organized in warehouse storage and are pulled efficiently when orders come in.
Example: A beauty brand bundles two or three lower-priced items with a popular product. The company moves more units, and the customer receives better value per order.
Kitting gives customers more options, including:
- Different colors or sizes within a single kit
- Quantity discounts for larger purchases
- Bonus items paired with primary products
An eCommerce site can configure these options to cross-sell and increase average order value.
How to Do Kitting
To implement kitting in your business:
- Set up inventory management software that supports kit creation and tracking
- Define your kitting strategy based on your products and customer preferences
- Select bundling approaches—pair best-sellers with complementary items, offer quantity tiers, or let customers build their own subscription kits
Having kitting software for your business will enable you to offer your customers more options and the ability to accurately track your inventory. Simultaneously, you can use the same software to manage other daily operations, such as shipping, purchase orders, payments, payroll, and even taxes.
Streamline kitting and optimize inventory management with Fishbowl
From automation manufacturing to kitting, Fishbowl helps you handle it all. Fishbowl, a comprehensive inventory management solution, seamlessly integrates with QuickBooks, combining stock and financial data for a holistic picture of business performance. You can efficiently supervise kitting operations, enhance order fulfillment, and optimize inventory levels.
To learn more about how Fishbowl can support your inventory needs, schedule a demo today.
Frequently asked questions
What is kitting in eCommerce?
Kitting in eCommerce combines individual products or SKUs into a single, ready-to-ship package. This approach streamlines fulfillment and creates bundled offers that increase order value.
What is kitting and fulfillment?
Kitting is the pre-assembly of multiple SKUs into one sellable unit before orders arrive. Fulfillment teams build these bundles in advance using standardized bills of material, then ship them as single items when customers order.
What are the 7 steps of order fulfillment?
The seven order fulfillment steps are receiving inventory, storage, order picking, order packing, shipping, delivery, and returns. Kitting simplifies this process by treating multiple items as one unit during picking and packing.
What is eCommerce fulfillment services?
Ecommerce fulfillment services receive bulk goods, store SKUs in warehouses, pick and pack orders, and deliver products to customers. These services handle the entire supply chain from inventory receipt to final delivery.