Kitting is a process of gathering individual components delivering them together in one box. An example of kitting fulfillment is a box containing components needed to build a bookshelf. When you open the box, it will contain a bag with screws, nails, glue, an alan wrench. It also contains the different wood pieces that are needed to assemble your bookshelf, assembly instructions.
Kitting fulfillment can be time-consuming requires a lot of warehouse space, organized management, a fluid team to bring it all together. A 3PL company (Third Party Logistics) is essentially an extension of your company. This allows you to focus solely on the growth further development of your business.
Advantages
3PL (Third Party Logistics) offers the expertise, resources, technology to run your kitting fulfillment services. Other benefits of outsourcing your kitting fulfillment services:
- Shipping
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- Reduce shipping errors
- Discounted shipping packaging choices
- Quicker shipping
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- Expert storage
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- Space saving
- Better warehouse management
- Organization
- Enough Staff
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- Accurate records keeping
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- Up-to-date software
- SKU number assignment
- Records of hardware software to be updated
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- Product
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- Reduce complications with fluctuation in product demand
- Guaranteed variety or accurate recurring product
- Faster picking packaging of products
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- Financial Gains
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- Reduced overhead costs
- Increased profit from increased sales
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- Staff
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- Trained
- Department
- Specialties
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- Customer Service
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- Product support via phone, email, or online
- Technical support
- Shipping concerns
Shipping
When it comes to being a successful fulfillment business, faster, easier, cheaper shipping is important. With the expertise product management software a logistics company has to offer, they can reduce the errors made in shipping. Fewer errors mean quicker shipping. When placing multiple products together in fewer boxers, you reduce the costs of both packaging shipping. When it comes to subscription boxes, logistics companies can guarantee the shipping on a pre-determined timeline.
Expert storage
Fulfillment services require a large amount of storage. By outsourcing your fulfillment services, you are saving space in your warehouse. The logistics company will have expert software to keep accurate records of the product moving in out of the warehouse. The logistics company has the staff needed to maintain an organized warehouse move the product fluidly.
Accurate Records Keeping
When it comes to maintaining a high amount of inventory it is imperative to have accurate records. Logistics companies maintain expert record-keeping software which ensures the movement of inventory records is kept up-to-date. It will also keep a record of anything that may be damaged or missing. They will have updated records of SKU numbers, an itemized list of products organized by size, color, product, etc.
One of the products possibly in inventory is hardware or software, which require continuous upgrades. 3PL will keep track of what products are to be updated when. They will be responsible for working out any of the bugs that need to be fixed making sure everything is running safe smooth.
Product
What is worse than opening your box getting ready to assemble your product only to find that you are missing a piece? Or do you have too many of one item not enough of another? Using a 3PL will help eliminate the possibility of these types of errors due to the available staff organized records that are kept. If your kitted product requires specific items or a variety of items, 3PL will be able to guarantee that fulfillment.
Errors may happen, but not all systems are flawless. 3PL having organized inventory SKU numbers make errors less likely to happen. Since 3PL has enough staff to locate kit products, shipping of the kits happens faster. 3PL prepares for fluctuations in sales. If there are promotions, or if there is a boost in sales, they are ready. They will have just enough product on hto fulfill orders without losing profits.
Financial Gains
With outsourcing, overhead costs reduce. You don’t need as much staff, space, or equipment in your building. Hiring the 3PL for those items is cheaper than insourcing. The building utilities will decrease by having a smaller building. Boxing shipping more items together, there will be discounted shipping packaging costs. With a company that can quickly fulfill customer needs, there is likely to be an increase in sales. An increase in sales is an increase in profit. The smoother the company runs from ordering to shipping, the higher demand, the greater the profit.
Staff
The expertise abilities of staff needed to maintain fulfillment services are important. The amount of staff expertise needed depends on how big the company is how much product is moved. Outsourcing your fulfillment to a logistics service will guarantee staff has the expertise to manage the warehouse in which your inventory will be located.
There will most likely be different departments that require different expertise. There could be a department that picks the products, the shipping department, the labeling department, the records department, so on. 3PL is prepared to have such staff to run fulfillment services. Some departments will require special knowledge, such as knowledge to run maintain the records software, or accounting knowledge. If training is needed, a 3PL will have the opportunity to train individuals. By outsourcing your fulfillment services, you will require less in-house staff.
Customer Service
Customer service is the most important part of a business. Depending on the type of company you have, the size of the business, the type of product, you may need a few different customer service departments. For instance, you may need a technical support department, a shipping support department, product customer service, etc. When outsourcing your fulfillment services, 3PL will also handle your customer service.
Talk about music to your ears right?? 3PL will handle all concerns based on the product they are kitting shipping for you. 3PL will already have the staff, the software, the knowledge, the availability to handle your customer service needs. They are an extension of your company, they will represent the bryou built, treat your customers respectfully.
Sometimes, the customer may have questions throughout the process of buying receiving their product, 3PL will be there to answer those questions in a professional timely manner. They will make sure your customer feels heard, help find an answer or resolution.
Disadvantages
Like anything, there are also some disadvantages to outsourcing your kitting fulfillment services. Not nearly as many benefits, but there are some.
- If your company has specialized needs, a 3PL may not be able to meet your needs. Example: Customized items.
- If your business is just getting started, outsourcing right away might not be possible. It can also be expensive if you are a low-product company.
- You can lose hands-on access to your inventory, it is not on-site with the rest of your business.
- You lose control of the logistics become dependent on the 3PL.
- If the warehouse is not close to where your company is, it can make it difficult for you to make inspections, check on a product, etc. This also makes it difficult to handle any issues that may arise in the warehouse.
- You will not be able to use personalized packaging.
How Do I Decide if I am Ready?
As you can see, the advantages outweigh the disadvantages. Here are a few things you can ask yourself when deciding whether or not you should outsource your fulfillment services.
- Can I afford to outsource right now?
- Do I offer enough products to outsource?
- Do I have enough in-house staff to do this on my own?
- Does my business offer specialized services?
- Do I need to have hands-on access to my product?
- Will my business profit better from outsourcing?
How Do I Choose a 3PL?
Once you have decided it is time to outsource, there are some things you might want to consider before hiring one.
Do they meet the needs of your business?
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- Kitting fulfillment
- Subscription box fulfillment
- eCommerce fulfillment
- Crowdfunding fulfillment
- Retail/Wholesale fulfillment
How does their management look?
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- Warehouse management
- Inventory management
- Shipping management
How does their warehouse look?
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- Is it big enough?
- Is it organized?
- Is it clean?
What is the picking packing process?
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- Is it automated in any way?
- How many staff are there?
- How is it organized?
What is their pricing?
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- Shipping
- Packaging
- Customization (if they offer)
- Picking Packing
- Kitting
- Receiving
- Returns
- Storage
Technology
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- Customer database software
- Inventory management software
- Accounting software
- Ecommerce platform
- Tracking software
- Technology to link warehouse inventory to your ordering system
The perfect 3PL will make your company as important to them as if it were their own. They will learn everything they can about your business, when it began, how it began, what goals it has for the future. The 3PL will answer any questions you have address any concerns. The right 3PL will get to know each one of your customers, what their needs are, how they can fulfill those needs.
