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May 12, 2024

Kitting and Fulfillment: What Retailers Need To Know About 3PL Kitting



One of the secret weapons that a 3PL (and thus a retailer that’s partnered with a 3PL) has at its disposal is the ability to consolidate items into kits. This process is called “kitting,” and it’s usually carried out by the same facilities and staff that handle order fulfillment.

Generally speaking, kitting is the process of assembling, packing, and shipping multiple products in a single package or SKU so that a customer can purchase them together. While the concept is simple, the business benefits of kitting are often lost. For this reason, it would be a good idea to offer a quick introductory course on 3PL kitting and fulfillment — as well as what kitting can mean for your business.

Reasons to Kit Items

Many retailers kit items as a marketing tactic to create buzz and excitement, which serves to improve incremental sales and help move slower-moving items. As examples, Materialogic has handled kitting and fulfillment by building kits intended as:

  •  Holiday gift packs or other themed gifts
  •  Variety/sampler packs
  •  Corporate gifts
  •  Value packs
  •  Travel packs
  •  Assembled items (from components)

For instance, a maker of gourmet snacks might combine their products as a holiday gift pack, selling it at a premium and at a much higher volume than individual items. Or, a seller of toiletries could combine a slow-moving hand lotion with fast-moving razor blades and toothpaste in a handy travel kit. A vitamin manufacturer could provide free samples of a range of products. And so on.

Thus, kitting is a low-cost way to move inventory and create purpose around sets of purchases.

Two Types of Kitting

There are two basic ways that kitting is carried out: putting kits together ahead of time, and assembling them “on the fly” as they’re ordered.

Building kits ahead of time is the less costly option. As long as the appropriate inventory is on hand, building the estimated number of kits needed, all at one time, allows for certain efficiencies that can help control costs and reduce fulfillment time.

That said, if the stock of components for a kit is limited or in high demand as individual sale items, it might make more sense to assemble kits as orders are received. The only downside here is that making the kit adds onto the time to get the order fulfilled — sometimes by as much as a day.

When Kitting Makes Sense

Given these considerations, kitting items together makes sense when the following criteria are met:

  1. You have items that make sense as a unit. (A mug and packet of hot chocolate make sense; a mug and a pillowcase less so.)
  2. There are no issues with packing and shipping said items together. (For example, you wouldn’t want to put together a kit shipping aerosol cans with lighter fluid, tissues, and other flammable material.)
  3. You have the stock available. If you are barely keeping an item in stock as a standalone order, you might not want to tie it up in kits.
  4. There is an additional sales opportunity. Offering kits should be a way to boost sales. If you can move items that otherwise would not sell, the kits are working! Your sales numbers will bear this out.

What to Look for in a 3PL When It Comes to Kitting And Fulfillment

Many 3PLs offer kitting and fulfillment services. Some don’t, and some kit in ways that are unnecessarily expensive or complicated. When discussing kitting and fulfillment, you should keep an ear out for the following:

  • Experience With Kitting 

Is the 3PL kitting often? Do they have processes in place for doing so? It’s surprising how many 3PLs offer kitting but simply do it on-the-fly via special instructions.

  • Inventory Updating and Control 

When you set up product kits or bundles as a single product, you still need to keep track of the inventory used. A good 3PL will decrement the inventory for each individual SKU that makes up the kit. These inventory adjustments should also update all sales channels simultaneously.

  • Software and Integration 

To take full advantage of 3PL kitting, you will have to monitor sales across your channels and make sure that fulfillment occurs correctly — especially if there are special instructions. A good 3PL should have powerful software to make that data transfer happen.

If you would like to hear how Materialogic handles its 3PL kitting services, contact our team today and let’s start a discussion!


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Tag(s): retailers , Blog , kitting , News , 3PL , featured

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