James Shores sets us straight with the many options of kitting and how it can benefit your business. As a bonus, see how many times he makes use of the word "obviously".
Hi, welcome to this Whiteboard Wednesday, I’m James, voted most likely to smile here at Fishbowl...
Today we’re going to 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 lets 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, we’re also giving them some options of things 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 offer them a discount, while also selling them more of your product.
Tax rate. 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 it 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, this really helps, especially if you’re dealing with end users.
Now if your company us 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 themselves. 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 vendor side, what’s important for the kitting, obviously, is for you to be able to track all these different products, because you may have—let’s take one of these colors as an example—you may have the blue in every one 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 the stuff unless you’re really keeping an eye on things—especially if you’re using a manual process.
This is where we tie into your business. You have to track all these things, if you’re doing it manually, this is even more points of contact, more “touches”, that you can introduce human error or just miscalculation.
It really 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 the these things is brought in from your vendor, it’s tracked. The second it’s purchased through a customer, it’s tracked. 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 the 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.