3PL Kitting & the Costs Associated
Table of Contents:
What is Kitting?
Kitting is a common service used in the eCommerce world that involves combining individual parts of a product or service and putting them all together and shipping them as a single bundle. Kitting is used quite often used by retailers, manufacturers, and companies who specialize in subscription box services to maximize their time and profits. This system is typically seen in shipping and warehousing facilities for large retail chains or any online marketplace. Large companies find kitting useful as it gives them more opportunities to sell their merchandise.
What are the Benefits of Kitting?
Kitting can be a great way for your business to increase profits and save time and money. Additionally, consumers will benefit from kitting services as they receive their products in a more timely manner. Below are some benefits of kitting to both businesses and their customers:
Low Labor Costs:
Kitting can become quite expensive if you are fulfilling orders in-house. This means your overall fulfillment costs are going to increase as you hire more employees to handle the fulfillment side of your business. Additionally, you will most likely have to upgrade your software systems and integrate them into your IT systems, as well as purchase additional storage space and specialized equipment. All of these factors can create huge expenses for your company. Outsourcing your fulfillment and kitting to a 3PL company lets your business focus on other aspects. You will reduce your overhead costs and have more money to put back into your company. NextGen3PL are professionals at handling kitting and all things fulfillment and have the proper equipment and space to effectively handle these tasks. Not only will outsourcing your kitting be more efficient, but it will also be less expensive than attempting to handle all of these services in-house.
Warehousing Efficiency:
Outsourcing your fulfillment needs and kitting services to a 3PL company is undeniable more efficient than trying to fulfill these services in-house. 3PL Warehouses use a strategy called pick and pack, which essentially means all of the products your company sells in a kit are stored close to each other inside the warehouse. This means it is much easier and much quicker to locate and ship these products to your customers. This frees up time for your companies in-house employees who no longer need to walk back and forth in a warehouse to locate certain products. This means products are shipped faster creating higher customer satisfaction.
Scalability:
Most businesses experience some sort of fluctuation in their product demand depending on the time of year. If your business exclusively sells summer products, then you will experience an increase in demand in the warm months while probably receiving fewer orders in the winter. Additionally, any company despite products often experiences an increase in product demand during the holidays. NextGen3PL is able to effectively keep track of any and all trends or fluctuations in the product demand of your business. They are able to scale up or scale down depending on these fluctuations or whatever your business needs. 3PL’s are efficient in scaling your companies products saves your business time and money. It can get expensive if you attempt to do all inventory management in-house. Outsourcing your fulfillment is the best way for your company to track fractionations in product demand no matter what time of year.
Faster Shipping:
Fulfilling orders can be extremely time-consuming. This means picking, packing, creating, and printing shipping labels, and shipping multiple products. These can get even more complicated in subscription boxes or large orders with many products. Outsourcing kitting to 3PL makes these fulfillment services run much faster. NextGen3PL specializes in all things fulfillment, so you don't have to worry about trying to handle all of these things in-house. They have effective inventory management strategies to ship your products to customers in little to no time. This increases customer satisfaction and the probability of customers ordering from your business again.
Managing Software Updates:
Depending on your product, you may need last-minute fixes before it is shipped out. Most electronics need software updates, upgrades, or bug fixes prior to the product being shipped. Although it is often overlooked as an essential part of the kitting service, 3PL can ensure all of these last-minute changes before a product is shipped out to customers. NextGen3PL can minimize any delays associated with handing software updates or bug fixes on electronics. Additionally, 3PL’s can ensure all these updates are reflected on the packaging of your product.
Material Costs:
One of the biggest benefits for companies who choose to outsource their fulfillment is the money they save on kitting costs. If you choose to do your fulfillment in-house, you will be responsible for purchasing and managing the packaging, shipping, and kitting costs as well as the labor involved with all of those aspects. Outsourcing your fulfillment to 3PL companies that specialize in order fulfillment already have the necessary packaging materials as they purchase them in bulk. Additionally, if your company offers a subscription box with special packaging, outsourcing your fulfillment can help your company save money in packaging costs. Overall, NextGen3PL can help increase your profit margins when you choose to outsource your fulfillment.
Kitting is a service in eCommerce fulfillment that takes individual parts of an order and combines them together to be shipped as a single unit. It is most commonly used by retailers, manufacturers, or any company that specializes in subscription boxes. By outsourcing your fulfillment to a 3PL, you are able to save your business time and money. NextGen3PL fulfillment specializes in kitting services and order fulfillment so they have the resources on hand to effectively and quickly pick and pack, package, and ship your orders. Choose NextGen3PL as Your Kitting Partner Today!