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What is kitting?

What is kitting?

“Kitting” is a business process wherein individual products that may have some relation with each other will be packed and/or sold as one product group or “kit.” Typical inventory guidelines for kitting still record the products one by one and by group or kit.  Many industries use kitting as a means of improving sales, clearing inventory, and giving value to customers.

In the retail world, people are commonly exposed to the kitting process.  Many products in various stores are commonly sold together or as a package or kit, and this usually gives economical value to customers.  In the case of computers and accessories, for example, some retailers may offer combination packages that include a laptop and printer that are sold as one kit.  If these items were sold individually, adding up the prices will typically be higher when compared to the package involving both items sold as a bundled kit.  In this way, consumers will be able to receive a better price for both products.  On the other side, the retailer may also benefit in the sense that the sample computer package may actually be selling faster as compared to individual items.  With more kits sold and giving more value to consumers, the retailer will also benefit in the long run.

There is also the case of inventory clean-up. In the real world, there will always be slow-moving or non-moving products in terms of sales. By simply adding these products to a kitting package or bundle, many companies will actually be able to sell them for good.  Through kitting, the inventory of some slow-moving products will be cleaned out, and this will give companies a great chance to replenish their stores with new stock.  Using the same example in the previous paragraph, some older printer models may have better chances of being sold if they are bundled with new laptops to form a computer kit.

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Posted by Erwin Z on Feb 7th, 2013 and filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response via following comment form or trackback to this entry from your site