Most small and medium-sized retailers outsource kitting and assembly to other organizations. E-commerce companies that want to focus on production and sales can benefit from engaging a 3PL to collect, package, and ship goods to clients.
Here, we’ll define kitting and assembly and discuss the benefits of using a 3PL.
Kitting and assembly: What Are They?
Kitting and assembly have different functions, although being used interchangeably. It’s critical to comprehend each of the individual roles in the entire order fulfillment procedure. By doing this, you may decide whether you should manage these tasks internally or contract them out to a 3PL.
By grouping and packing related products, kitting combines them into a single, shippable SKU. This is done before a consumer places an order so both things leave at once. Kitting is bundling. Product bundling is another name for kitting.
Here are a few instances:
- boxes for subscription: You can want to combine shaving goods and sell them as a single item or as a subscription box rather than selling them individually as individual things.
- colorful bundles: It’s possible that producers might like to package, say, six different drink flavors into a single kit and sell it as a rainbow pack.
- Gift Purchase: If you run a retail business and want to give customers a gift with purchase (GWP), consider giving them a small toiletry kit containing a pricey cologne.
- Late Stage Customization: As a result, producers can create unique packaging for particular retail locations (such as bundle packs for club stores) or distribution routes.
Assembly is when every kit’s individual items are put in place and prepared for shipping.
For instance, shaving supplies are bundled, packaged, and delivered as a single unit. Kitting and assembly work well when you need to satisfy the same orders with two or more different items. You can save time and increase your bottom line by doing this.
For example, you may group together items that go well together, like video games and controllers or stationery and notebooks. You’ll be able to sell more goods and spend less money on packaging as a result. Additionally, doing so provides you the choice to provide free shipping to your clients.
If you sell subscription boxes, you can combine things to generate a new SKU that is recorded as a single item.
The kitting and assembly model can be used for nearly any kind of product.
Examples of various goods that are frequently kitted and assembled:
- samples of products
- dietary supplements
- subscription-based services
- press kits
- promotional products and materials
- educational materials
After learning about kitting and assembly, let’s look at the benefits of outsourcing to a 3PL.
Benefits of Contracting with a 3PL for Kitting and Assembly Services
In your company’s order fulfillment process, kitting and assembly are essential steps. You may efficiently and affordably fulfill customer orders by working with a 3PL service that has experience managing these operations.
E-commerce companies are constantly seeking methods to give their customers faster and more dependable shipping options.
Kitting can be sped up by doing it in bulk instead of for each individual order. You can optimize your processes and raise the output of your warehouse workers by using the bulk method.
You can streamline your operations and save time if you’ve built an internal kitting assembly method. However, you may fulfill orders more economically by using a 3PL.
Instead of picking and packaging each item individually, you may gather them, package them, and ship them as a single unit with a picking-and-packing-competent fulfillment company.
Kitting costs include picking, grouping, packaging, and selling, plus overhead. These costs include hiring staff, leasing more storage space, buying specialized equipment, and integrating IT management systems.
These overhead costs may affect your resources and bottom line. It may make kitting and assembly difficult.
A 3PL can handle your kitting and assembly to save overhead costs. Why? Fulfillment companies are experienced at kitting and assembly and have the infrastructure. In a comparable situation, outsourcing kitting and assembly will be less expensive.
Due to variable product demand, many e-commerce enterprises must maximize warehouse space, labor, and equipment. As demand rises, hiring extra personnel and buying storage space may not be straightforward (or cost-effective) for most organizations.
You should focus on growing your firm and implementing scalable solutions that can adapt to shifting needs and product demand.
3PL order fulfillment suppliers offer scalable services to several firms. They can scale up or down to meet your demands and predict market demand. By working with a 3PL, you can handle unexpected requests and turn seasonality risk into an opportunity.
The cost of packaging is another aspect that determines whether you should outsource your kitting and assembly tasks or manage them yourself. By employing efficient and affordable packing, you can save postal costs by hiring a 3PL service provider to manage kitting activities.
For commonly purchased kits, you can think about making a custom box rather than using a regular, fixed-sized one to reduce the size and weight of your products. You’ll be able to reduce delivery expenses as a result. The reason for this is that 3PL service providers can charge you a fair price while purchasing packaging supplies and custom boxes in bulk.
Less Shipping Errors
Rising shipment errors indicate you can’t handle kitting and assembly inside. Many companies try to meet rising product demand with their current resources. This causes delivery mistakes and blunders.
Shipping orders in kits reduces shipping errors. Your warehouse staff or shipping partner can use pre-printed shipment labels. Without pre-printed labels, order fulfillment takes longer and shipping problems are possible.
You might engage a 3PL order fulfillment company’s kitting and assembly-experienced crew. They also have the infrastructure and capabilities to track your orders in real time.
Kitting and assembly are essential steps in the process of fulfilling your orders. You’ll be in a better position to choose whether to manage these operations in-house or outsource them to a 3PL service provider if you are aware of the opportunities and challenges they present for your e-commerce business.
What types of goods are you considering kitting? Post a comment below to let us know.