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MyFBAPrep Kitting Warehouse

Kitting is a value-added service to help your eCommerce business market, store, and ship products more efficiently. A kitting warehouse receives inventory and then repackages the multiple products into a single set. This cuts back on inventory management, overhead, and shipping expenses, as well as reduces the cost of selling items to customers.

A 3PL can handle warehouse kitting for you; all you have to do is list your kits on your website and other selling platforms. With MyFBAPrep specifically, you also enjoy custom packaging, package inserts, and complete product prep, from labeling and product inspection to the final delivery.

That gives you a competitive advantage by cutting warehousing costs and the number of times products have to change hands. MyFBAPrep can receive goods directly from the manufacturer and separate those pallets into kits and boxes intended for different retail outlets and platforms.

Let’s take a look at how warehouse kitting works and how MyFBAPrep takes it to a new level.

What is a kitting warehouse?

Kitting is the process of assembling product packages from multiple SKUs. You combine constituent parts to form a new, sellable product, such as a gift pack of bath and beauty products or a cellphone repair kit.

Meanwhile, a kitting warehouse service involves:

Receiving goods (from a manufacturer, supplier, or your warehouse)
Inspecting and segregating products based on SKU and destination
Sticker and label removal
Repackaging, including shrink-wrapping, boxing, or custom packaging
Labeling and prepping for retail through FBA or other outlets
Adding kits to inventory with a unique SKU

The goal is to minimize the number of packages necessary to ship combined items. MyFBAPrep’s white-glove service offers a hands-on approach at every stage of product prep and kitting. We can take on even tedious manual tasks like sticker removal to rebrand and present your products beautifully and according to your exact specifications. MyFBAPrep will also offer advice on which items you can kit together.

A kitting warehouse is ideal for:

Gift sets
Subscription boxes
Sales and deals
Products that arrive from separate manufacturers but are sold as one unit

Kitting vs. bundling

Kitting and bundling are often used interchangeably. However, the former is a specific series of items combined to function together (for example, a phone, phone charger, screen protector, and phone case). Customers receive everything they need to get started with a product or activity by packaging items that aren’t manufactured together into one SKU and then shipping them together.

Bundling is similar but, instead of complementary products, it can include any mix of items. For instance:

“Create your own” subscription boxes
Discount boxes
Gift packages

Kitting vs. assembly

Assembly is the process of uniting parts to form a complete product, either with a machine or by hand. That can include putting together pieces that were manufactured separately, adding stickers and labels, etc. Assembly always requires some degree of hands-on labor to compile parts that arrive separately. For example, if you sell coffee machines, you’ll need fittings screwed on, pots added to the machinery, and lids fastened.

Is a kitting warehouse right for your products?

Kitting isn’t the best option for every product or product setup. Depending on your warehousing and inventory, it may be smarter for you to assemble kits on a one-off basis as goods leave storage.

This approach consolidates multiple SKUs into a single packaged (and shrink-wrapped) SKU. That means any individual identifiers in the kit are no longer in your general inventory. So, if you stock out of any of the original SKUs, you can’t pull those items from their kits without disassembling the larger unit.

Splitting inventory in this way can be highly lucrative. However, to realize those profits, the kit should offer real value and move as quickly as its individual components.

Benefits of a kitting warehouse

A kitting warehouse assembles and packages items together to create a single, ready-to-ship product. That approach offers numerous benefits, which we’ve broken down below.

Cost reductions

Assembling kits at a dedicated station ahead of order time readies the products quickly, cheaply, and with minimal error. You only have to package and label items once, no matter how many components are in the kit, thus reducing pick-and-pack time and costs, as well as packaging waste.

Improved shipping

Having customers purchase items separately instead of in a kit increases overhead, pick-and-pack time, and the chances of mistakes occurring. With everything shrink-wrapped into a single SKU, you have only one order to pack and ship since everything comes from the same warehouse location. That also means pick errors are less likely to occur, so you’ll see fewer returns due to receiving the wrong product. All of these improvements contribute to greater customer satisfaction as well.

Warehouse efficiency

Pick and pack for a single product in one location boosts your warehouse’s efficiency at every stage:

If you package everything together, you only need one bin for the assembled product.
You don’t have to organize your warehouse layout based on which products are normally ordered together, because everything is already combined into kits.
It cuts down on the total amount of space you need for each product.

Improved auditing

Packaging products that go together into a single unit speeds up inventory management and auditing. With all necessary components boxed together, you may only have to check one bin instead of three, four, or more for the same set of items. While this doesn’t work as well if you also sell the constituent products individually, it can still help streamline your inventory management and audits.

Marketing opportunities

Kits and bundles allow you to merchandise and market your products in new ways, such as complete bundles, assembled products, or gift sets. Talk to your MyFBAPrep consultant to discuss some of the ways you can use your kitting warehouse to run unique promotions and drive more sales.

Challenges of kitting warehouses

A kitting warehouse has its complexities that are prone to mistakes. You’ll need to select a kitting warehouse partner to help you plan and maintain operational quality.

Inventory mismatches or shortages

Let’s say you want 300 of Kit A but you only have 290 of Part C, so you can’t make the kits. Or, perhaps you sell your parts separately and Part C stocks out … but you have 300 of them stuck in kits that aren’t moving. Both scenarios are realistic inventory issues you could face if you fail to manage your kit inventory properly.

Kitting requires inventory forecasting to align sales and stock quantities so you can predict what you need without straining any other point in your supply chain.

Hands-on labor

Kitting requires someone to pick up products, remove labels, fit items into packages, and seal the boxes. MyFBAPrep offers a well-honed approach for high-quality, hands-on service, which we supplement with custom labeling, shrink-wrapping, and box erection machinery to reduce process times and costs.

SKU proliferation

If you sell four versions of the same kit with four different SKUs as well as the original six items that make up the sets, that’s a lot of extra SKUs in your inventory. You’ll need to invest in a strong management system to keep track of those identifiers that includes inventory and warehouse management. Additionally, it’s important to make sure those new SKUs add value.

Quality control

Because kitting requires manual labor to package products together, strict quality control is crucial to remove individual product labels, inspect every item before it goes into a kit, and assemble them correctly. You’ll also need a robust packaging procedure to ensure the kits are sturdy and avoid damage during shipping.

Customization options in a kitting warehouse

Your chosen kitting warehouse must provide the customization options you need to craft offerings that’ll prove lucrative for your store. Important elements in this regard are:

Custom packaging
Custom machinery
Custom labeling
Stickering and sticker removal
Custom boxing
Shrink-wrapping
On-demand kitting

Why outsource kitting and assembly

When you contract with a kitting warehouse service, experienced personnel carefully prepare items, assemble and package them together, and then label and store them appropriately. That can occur on demand or in bulk to prep gift sets and kits for sales periods or FBA. However, while outsourcing this process entails finding a 3PL that can offer that hands-on service, it adds significant value to your supply chain:

Your provider can receive inventory directly from your manufacturer or supplier into their warehouse and prep them there.
A kitting warehouse is equipped with specialized machinery to speed up kitting and reduce costs.
Kits can be automatically sorted into inventory with no additional steps after packaging and labeling are complete.
A kitting warehouse has staff on hand to process and handle kitting, even in bulk, without training new employees or bringing in extra people to handle acute spikes in demand volume.

Ultimately, a kitting warehouse can offer specialized prep at a lower cost and higher quality than your business could internally.

How to implement kitting in your warehouse

If you’re ready to introduce kits into your sales catalog, there are a few steps to get started:

Select items to package together: Decide which products you intend to assemble into a kit. Normally, sets should include items that logically go together. You can also opt to create bundles, which can be random combinations based on sales patterns or customer demand. Make a list of potential kits and consider consulting with MyFBAPrep to see what we recommend for your inventory.
Generate SKUs for each kit: As previously stated, every kit needs its own SKU. Set this up in your inventory management system and add descriptions, including individual components, quantities, and any specific variations.
Kit the products: Your kitting warehouse will box the completed kits into a single package. MyFBAPrep uses dedicated kitting stations with shrink-wrapping and boxing capabilities, product prep for label removal and relabeling, and stickering services to add appropriate stickers and barcodes.
Integrate kits into your inventory: With a 3PL, adding kits to your inventory is a breeze. Once MyFBAPrep has labeled your new product kits, we simply scan them into inventory.
Market and sell: Consider advertising your kits through separate, product-specific marketing campaigns. Once a sale is made, your kits are ready to ship and will move through your warehouse as a single unit to minimize pick-and-pack time, packaging needs, and reduce the cost of shipping.

Wrapping up — Hone your warehouse kitting game with MyFBAPrep

MyFBAPrep offers a first-class prep service that includes the option to bundle and kit your goods, whether receiving them from manufacturers or suppliers. We’ll then store the finished products for direct-to-consumer delivery or shipping to warehouses like Amazon FBA.