Kitting Meaning and Full Process Explained (2025)

As a retailer, manufacturer, or wholesaler, kitting will greatly benefit your inventory management and order fulfillment systems. The process not only saves you time, money, and frustration, but also increases sales.

Simply put, kitting refers to the technique of combining different products in a bundle to be shipped together in a unified parcel.

Ahead, you’ll learn everything there is to know about kitting, its process, and its benefits. 

Kitting definition 

Kitting is an inventory management technique of combining individual products into one single unit for shipping. Businesses can create a “kit” that their audience will want to buy. 

It’s commonly used by companies looking to reduce operational expenses and improve how they handle customer orders. For example, subscription boxes often group complementary items to create exciting sets of kitted products.

In most cases, items being kitted together fall under the same product category and are closely related to each other (think yoga mats and yoga blocks, or candles and wick trimmers). Because kitting forms part of the order fulfillment process, it is usually carried out by the seller, a kitting service, or a third-party logistics (3PL) partner.

There are two main ways kitting is carried out: in advance or as orders come in.

Where is kitting used?

In advance

Business data can tell you which related products customers tend to buy together, and you can get a headstart on order fulfillment by kitting these individual components together ahead of time and assigning them a single SKU.

When you receive these orders, all you have to do is locate your pre-prepared kits and send them off. You don’t have to search for, select, and package every single item every time you receive one of these anticipated customer orders. It makes the picking and packing process simple. 

Getting ready in advance is great if you’re expecting specific purchases. You can often pick up tell-tale patterns from your business data like many and what products your customers group together in an order.

As orders come in

Kitting doesn’t have to happen in advance. You can also start once an order for various items arrives. During this assembly process, you gather the necessary goods and bundle them together, so pickers spend less time locating individual pieces.

In a warehouse

If you’re running a large business and carrying out order fulfillment in-house, your kitting process will likely occur in a warehouse where your inventory is stored. 

Effective warehouse kitting means a designated picker can easily find everything needed for a swift assembly line flow. 

Workers collect the items to be kitted, drop them off at a station, and package them. Once they’ve created a new SKU for each bundle, they often use barcodes to track and update the inventory.

Kitting in manufacturing

Kitting in the manufacturing process refers to the packaging of products, components, or materials together, and is also commonly referred to as “material kitting.” 

Because manufacturing involves many moving parts, businesses often rely on kitting to integrate seamlessly with the broader supply chain, reducing complexity from raw materials to finished goods.

Example of kitting

Imagine you’re a small stationery business selling wholesale greeting cards. With Valentine’s Day around the corner, you decide to group some of your top-selling love-themed cards into a bundle. 

This is how the kitting process works:

You pick out one of each card, package them into assembled kits, and keep them ready for shipping. Assuming you’re anticipating 50 purchases of this bundle, you’d repeat this process 50 times, which gives you 50 parcels, each containing the same cards. If you list these products on other sales channels like Amazon, kitting keeps you organized while managing the supply chain logistics behind the scenes.

Once these kits are prepared, you set them in a designated spot in your storage space. As soon as an order for this bundle comes in, you know exactly where to locate them. And since the kitting process is already done, all you need to do is stick a postage label on each kit (which you’d also be able to do in advance for all 50, since they all weigh the same) and ship it off.

Differences between kitting and bundling

“Kitting” and “bundling” are both common terms in ecommerce, and they seem similar. However, they refer to different methods of grouping items, for different reasons.

Here’s a quick breakdown of the differences between kitting and product bundling:

Kitting focuses on efficiency, gathering products and packaging them for faster fulfillment. Bundling is more about sales, combining items (sometimes with a discount) to encourage higher-value purchases. 

A manufacturer may provide a kit with everything needed to assemble furniture to improve customer satisfaction, while a retailer might bundle slow-moving items to boost sales.

The kitting process

So how do you go about starting to kit? 

The kitting process can vary from business to business. This is because it’s largely dependent on the type of products you sell and how you decide to put them together. Nevertheless, here are some basic steps of kitting.

1. Choose your products

The first step of the kitting process would be to decide on what products you’re kitting together and pick them out. 

These items can be grouped by use (e.g., candles and candle wicks), theme (e.g., Christmas socks and Christmas decorations), color (e.g., blue and red for Fourth of July celebrations), special promotions (e.g., a free pack of dog treats for any purchase of pet products), and many other qualities. 

2. Assemble the kit

Once you’ve picked out your products, select a suitable packaging material and start assembling your kit. 

Make sure the box you’re using is large enough to fit all of the products you’re kitting together, yet small enough that they’re not moving around too much during transit. 

This is especially important if you’re shipping fragile items like glass. Consider stuffing bubble wrap (or sustainable alternatives like biodegradable packing peanuts) to pad your parcel.

3. Assign your kit a new SKU number

The next step of the kitting process is to assign your newly packaged kit a unique stock keeping unit (SKU) number.

Even though your kit is made up of a combination of different individual items, as soon as they’re kitted together, they become a single product. Assigning a new SKU to it will help to streamline and keep your inventory more organized. 

4. Place prepared kits in a designated area

Ideally, you’d have a dedication section in your warehouse or storage space where you can set these kits aside. 

Whether or not this area will also be where you assemble your kit isn’t vital. What’s important is for you to know where your prepared kits are located. That way, when an order comes in, you (or your staff) know exactly where to go to get them, saving you lots of time. 

5. Ship the kit

Once an order comes in, get your kit, stick on the shipping and tracking labels (if you haven’t already done so beforehand), and ship them off.

Don’t forget to inform your buyer of the kit’s shipping status and send over a tracking number, if there is one.

Benefits of kitting

From reduced costs to higher productivity, there are plenty of benefits kitting offers businesses. Here’s a look at some of them.

Faster shipping process

If you’re kitting in anticipation of specific purchases, you’ll already know what items need to be kitted together. Not only can you kit them ahead of time, but you also save time from having to weigh and label every single item in your kit.

This also means that tracking labels can be printed in advance, which contributes to a much more streamlined and efficient shipping process.

As you start doing this systematically, you also begin to get quicker at kitting and commit fewer errors along the way.

More organized inventory management

Kitting also keeps your inventory management organized. Because each prepared kit is assigned a SKU, this ultimately reduces the number of SKUs you have to manage in your inventory, helping you reduce clutter. This is a massive time-saver when the time comes to carry out an inventory audit. 

Inventory management software helps businesses track components of kits separately, as well as the kit as a whole unit. For example, if a kit is composed of five separate parts, the software will track inventory levels of all five components. When a kit is assembled or sold, the system automatically deducts the used components from the inventory.

Less packaging material and lower shipping costs

Instead of using one box per item, kitting allows you to use less product packaging, as you’ll be putting multiple items into one single parcel. This reduces your expenditure on packing material. 

Boxes may not cost much if you acquire them in bulk. But their costs can really add up, especially if you’re shipping out high volumes.

Kitting helps you reduce your overall package size and weight. Since shipping costs are largely determined by parcel weight, kitting can help to reduce shipping costs pretty substantially. 

Lower labor costs and higher productivity

The efficiency kitting offers can also lower labor costs. For starters, the time spent on packaging is significantly reduced. Plus, kitting your items together means your employees can also save time from having to search and locate individual items. 

That’s not all—it also frees your workers up to attend to other issues, which is a plus for productivity.

Offload dead stock

As mentioned earlier, what items you kit together can depend on any business promotions or campaigns you may be running. 

Not only does this give you a great opportunity to get rid of dead stock and/or low-demand products, but it’s also a great way to spur purchases and create a better shopping experience for your buyers.

Reduced storage space

Another benefit of kitting is its ability to optimize the physical space you need to store your inventory. 

For small businesses, this may even mean not having to rent out storage spaces, which lowers operational costs. 

For larger businesses, the space optimization benefit from kitting may even allow you to downsize to a smaller warehouse and pay less in rent as a result. Alternatively, you could use the extra storage space for new product ideas and scaling your business.

Common kitting pitfalls

Knowing what can go wrong with kitting helps save money by preventing mistakes in packing and shipping. It also keeps customers happy because they get their orders on time with all the right items inside. Here are some common kitting pitfalls:

1. SKU confusion: Individual items can get mixed up when combining products into kits, which can lead to over- or undercounting inventory. Assign unique SKUs to completed kits and implement barcode/RFID tracking for real-time inventory updates.
2. Production volume issues: Companies often struggle with creating too many kits that go unsold, or that cause stockouts. Use historical sales data to forecast demand and consider a kitting-on-demand model for uncertain volumes.
3. Workflow chaos: Without proper organization, workers make picking errors and waste time in cluttered spaces. Establish a dedicated assembly area with clear SOPs and visual guides for efficient kit assembly.
4. Quality problems: Rushed assembly and poor packaging lead to incomplete or damaged kits and more returns. Implement quality-control checkpoints and proper protective packaging, while tracking errors to improve processes.
5. Shipping inefficiency: Incorrect box sizes and excessive packaging materials inflate shipping costs. Use right-sized packaging with optimal cushioning materials and monitor dimensional weight charges to be more cost-effective.

Create your kitting process today

In short, kitting refers to the process of packaging multiple different but related items together in a ready-to-ship parcel. In doing so, you gain cost savings and can improve worker efficiency and productivity at the same time. 

Whether you implement it in manufacturing, an ecommerce business, or fulfillment services, kitting is a proven strategy for improving your business model.