As a prep center working with large Amazon FBA sellers across the world, we often get asked about the differences between kitting vs bundling. Though they are similar, we hope to be able to guide sellers to the option that makes the most sense for them (and ultimately leads to the highest profit in their Amazon store).
The difference between kitting and bundling is that kitting is matching items that are not for sale individually into "kits" that can be sold as one SKU, whereas bundling is taking individual items and "bundling" them together as a single SKU. Both kits and bundles are commonly sold on Amazon, Walmart, and various other E-commerce outlets.
As an Amazon FBA (Fulfillment by Amazon) seller, optimizing your product offerings is essential to stand out in the competitive marketplace.
Kitting is the practice of combining multiple individual items into a single package or "kit" to create a new product. These items can be related or complementary to one another, but the key is that they are not items available for individual sale.
An example of a kit would be a set of figurines that have been taken apart and dispersed into multiple "kits", along with paint or decorations to form a craft painting kit.
Of course, you'll want to defer to the individual manufacturer's rules regarding the kitting of their items. However, kitting is a common strategy employed by sellers we work with, since it allows the seller to provide a unique value to the customer that they can't get elewhere.
Bundling, on the other hand, involves combining existing products into a single listing or offer, typically with a discounted price. Unlike kitting, bundled items retain their individual ASINs (Amazon Standard Identification Numbers), allowing customers to purchase them separately if they wish.
An example of a bundle would be a DSLR camera that is also being sold with a tripod and lens that are available for individual sale elsewhere on the seller's account. This is a common technique employed by sellers because it enables them to stand out from the competition for "commodity" type items, where the bundled items may be the difference between a customer selecting one seller's listing over another.
Unique Value Proposition: Kitting allows sellers to create exclusive products that are not readily available in the market, attracting customers seeking something special.
Higher Perceived Value: Customers often perceive kits as offering more value for money, as they get multiple items for a bundled price.
Reduced Competition: By offering unique kits, sellers can potentially face less competition, leading to higher profit margins.
Enhanced Customer Experience: Kitting can result in a more cohesive and curated customer experience, tailored to specific needs or occasions.
Clear Inventory Management: Bundling utilizes existing inventory, simplifying inventory management for sellers.
Versatility for Customers: Customers can choose to purchase the bundle or individual items, increasing the odds of making sales depending on the customer's preferences.
Seasonal Promotions: Bundling allows sellers to create seasonal or themed offers without creating entirely new products.
Cross-Selling Opportunities: Bundling provides an opportunity to cross-sell related products, potentially increasing overall sales.
When deciding between kitting and bundling, consider the nature of your products, customer preferences, and your business goals. Also, consider the costs involved if you've determined that an Amazon Ads campaign is worth it to improve the sales velocity. Here are some factors to keep in mind:
Kitting works best when products have a natural affinity or are frequently used together (such as paint brushes and paint). Bundling, on the other hand, can be effective for complementary items (such as electronics and batteries).
Kitting requires careful assembly and packaging, while bundling requires less logistical effort.
Conduct market research to understand customer preferences and identify potential demand for kitted or bundled products.
If you're considering implementing a bundling or kitting strategy, make sure that it's also going to work with whatever current Amazon repricing strategy and software you're using. Introducing lots of kits and bundles can be extremely profitable, but also complicate the process of determining maximum and minimum prices through repricers.
Both kitting and bundling offer unique advantages to Amazon FBA sellers. Kitting provides exclusive products and a higher perceived value, while bundling offers versatility and clear inventory management benefits.
Ultimately, the choice between kitting and bundling should align with your product offerings, customer needs, and overall business strategy. By carefully considering the pros and cons of each approach, you can leverage these strategies to boost sales, enhance customer satisfaction, and achieve success on the Amazon platform.
If you would like to consult with us regarding our kitting and bundling services, reach out to us. We'd be happy to discuss the nuances of each strategy and help you put together a strategy as we partner with your FBA business going forward.
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