Hi, welcome to this Whiteboard Wednesday, I’m James, voted most likely to smile here at Fishbowl. Today we’re gonna talk about kitting and what that means for your business, what it means for your potential customers, and kind of some of the options that we can go through.
So let’s start with just a few of the available options as it relates to kitting; so you have a standard, optional, variable, optional/variable, discount and tax rate. Now with most of these obviously it’s the variety that you can offer to your customers, whether it’s just a standard package that they can purchase or also giving them some options of an either/or, or also additional products they can put within that kit, and obviously this will differ from industry to industry, depending on your business. A good one to know obviously is the discount, where you’re able to offer more to a customer and provide them a discount, while also selling them more of your product. And a tax rate; so different products may have different applicable tax rates depending on the state where they’re being purchased or sold.
And all of these things can be combined in different varieties so that you’re able to give your customers the best possible options of your products and your assemblies.
But let’s look at now from both the customer side, the business side, and the vendor side – as it relates to kitting.
So from the customer side, you being able to provide them several different types of options and purchase features is great, because we’re really living in an age where variety is key; the more personal something can be sometimes really helps, especially if you’re dealing with end users.
Now if your company is selling to another type of supplier or middle-man company, this is also great because they’re able to purchase exactly what they want relative to the kit without needing to individually buy large bulk items and then assemble it yourself. It’s just another great selling feature, saves them time, but also allows you to give many different options for that customer.
Now from the vendors side, what’s important with the kitting obviously, is for you to be able to track all of these different products. Because you may have, let’s take one of these colors for example, you may have the blue in everyone of these possible varieties, but you only have the purple in a couple of them, because they’re more specialized or they’re not as much desired but they’re still important to carry in your line.
With the vendor you need to be able to track all of these sales, and that’s kind of like a no-brainer, but with kitting that can get really out of hand, because you’re not able to track all of the stuff unless you’re really keeping an eye on things – especially if you’re using a manual process.
And this is where we tie into your business. You have to track all of these thing. If you’re doing it manually this is even more points of contact, more “touches”, that you can introduce human error or just miscalculation, and really just reinforces the need of a software that can track all this stuff. Because with kitting you have so many variables, especially as you introduce more options to your customers, that you need to be able to track. With an automated system, the second one of these things is brought from your vendor it’s tracked, the second it’s purchased through a customer it’s tracked, and the moment you send it out from your business it’s all tracked – and what this provides is good data. You know how much you’re sending, how much you’re buying, how much is being purchased from your customers, so that you’re able to then also change your kits as needed. Perhaps you have a variable kit that really isn’t selling well but you feel like it is, well now you can go to the data and say, nope it’s not selling very well maybe we need to change it up or just get rid of it altogether.
So this is just a general overview of the kitting process and kind of a reminder that with kitting it introduces a lot of complexities, but also a lot of options for your customers and for your company.
Join us again next week for Whiteboard Wednesday. I’m James, thanks for joining us.