Order fulfillment can often be a stressful and complex process for online merchants, especially during the busy holiday shipping season. So, what can be done to make this process simpler and more seamless?

Warehouse kitting can be the answer! Indeed, warehouse kitting can be a great way for online businesses to save time and money as well as optimize their inventory management. With this guide, we’ll take a closer look at just what exactly warehouse kitting is and how it can potentially benefit your company. Here’s all you need to know!

What is Kitting in a Warehouse?

Warehouse kitting is the process of taking different yet related SKUs and combining them together to create a new SKU.

Essentially, warehouse kitting involves fulfilling customer orders by pre-assembling individual items into kits that are ready to ship out right away, rather than picking and packing them individually. For example, if a customer orders a personal computer online, they may also select certain software, USB drive, monitor and other components. The supplier would then assemble all of these items into a single kit to be shipped to the customer.

To understand the warehouse kitting procedure even better, let’s first understand what happens in a warehouse after an order is placed.

Each product is identified using a unique code in the warehouse management system
A staff member locates and retrieves the item
Inventory is updated after the item is picked
The order fulfillment process is then completed
This process is repeated for every product in the order
Each item (SKU) is picked, packed, and shipped separately

With kitting, on the other hand, you bundle items that are usually ordered together to create one single unit in your inventory. So, when a new order is placed, you can quickly and easily locate the items as a bundle and ship it off right away.

Different Types of Kitting

Kitting in warehouse management comes in different categories that are best suited for businesses of different scale and shipping capacity.

Kitting in Warehouse

Warehouse kitting is the process of pulling individual SKUs from inventory and combining them into a single, ready-to-ship package before an order is even placed. Rather than picking items separately for each order, warehouse teams pre-assemble kits so fulfillment becomes a one-touch process. This approach reduces pick times, minimizes packing errors, and keeps operations running efficiently during high-volume periods. It's especially common in e-commerce, subscription box fulfillment, and retail distribution.

Private Label Kitting

Private label kitting takes bundling a step further by packaging products under a retailer's or brand's own label. A third-party manufacturer or fulfillment provider assembles the kit, applies custom branding and packaging, and prepares it for sale as if the brand produced it in-house. This type of kitting is widely used by DTC brands and retailers looking to offer curated bundles, gift sets, or starter kits without investing in their own production and assembly infrastructure.

On-Demand Kitting

Unlike pre-assembled kitting, on-demand kitting only begins once a customer places an order. Components are picked, grouped, and packaged in real time based on the specific configuration the customer selected. This model is ideal for businesses that offer high levels of product customization or carry a wide range of bundle variations. While it requires more agile warehouse operations, on-demand kitting reduces the risk of excess pre-built inventory and gives brands the flexibility to adapt to shifting customer preferences quickly.

Kitting in Manuafcturing

In a manufacturing environment, kitting refers to gathering all the raw materials, parts, and components needed for a specific production run and delivering them to the assembly line as a single kit. This ensures workers have everything they need at their workstation without delays or missing parts. Manufacturing kitting improves production line efficiency, reduces downtime, and lowers the chance of assembly errors — making it a critical part of lean manufacturing and just-in-time production strategies.

What are the Benefits of Kitting in Inventory Management?

Kitting offers a number of great benefits for companies to consider. Just a few of these include:

1. Organizes Your Inventory

First and foremost, warehouse kitting is a great way to make your warehouse more organized and streamlined overall.

When you use kitting, you generate fewer SKUs, making it easier for you to organize your inventory effectively. This, in turn, optimizes warehouse space and makes it much more efficient overall.

2. Increases Efficiency

Speaking of efficiency, warehouse kitting increases that greatly too!

If, for example, you have to assemble an order, kitting makes it simpler for your workers to locate all parts in one place, ultimately boosting worker efficiency and productivity. This, crucially, can give your business a competitive edge in the long run.

3. Reduces Labor Costs

Increased efficiency, in turn, also helps to decrease labor costs!

Fewer workforces are required to perform tasks, ultimately lowering your labor costs and saving your company money.

4. Faster Shipping

Kitting can also make your shipping process much simpler, streamlined and quicker.

Warehouse kitting can go a long way in making sure your shipping process is simpler and much more efficient, cutting down on the risk of human error and decreasing fulfillment times. You can print shipping labels beforehand, plus don't have to weigh and label individual items at the time of shipping, offering considerable time and money savings.

Shipping off the pre-assembled kits quickly can also help save time and reduce fulfillment errors.

5. Improved Packaging

Warehouse kitting is also a great way to make packaging more affordable and efficient.

Instead of packing each item separately into standard-sized boxes, you can pack your items together in a custom-sized box that can reduce the size and weight of your parcels. You can also save on packing materials as well, as you don't have to pack items separately. Ultimately, these can help to cut your packaging costs greatly!

6. Frees Up Warehouse Space for Better eCommerce Fulfillment

Kitting is a warehouse is also a big space saver!

Warehouse kitting, by bundling similar items together, helps to optimize and reduce warehouse space. This means your business can operate in a smaller, more efficient warehouse and ultimately save even more money!

7. Improves Workplace Safety

Kitting, believe it or not, can also improve workplace safety.

By reducing the time and distance workers have to move to assemble orders, accidents can potentially be reduced. That not only means a safer, more comfortable workplace, it also means less spent on workers’ compensation and higher workplace morale overall.

8. Smart Sales Strategy

Finally, warehouse kitting can also be leveraged as a great sales strategy.

Consider similar items like handbags and wallets sitting in your inventory. You want to sell off your current stock to order new inventory. Just bundle them together and offer them as a discount package for sale!

Doing so is an excellent way to not only boost sales, but also optimize your inventory turnover.

How does Kitting Work?

Kitting follows a straightforward process. While the specifics can vary depending on the business, most kitting operations follow these core steps.

Identify what goes into the kit: It starts with deciding which items need to be grouped together. This could be based on a product bundle you're selling, a set of parts needed for assembly, or a custom order from a customer.

Source and store the individual components: Each component of the kit is ordered, received, and stored separately in your warehouse or facility. Every item gets its own location so it's easy to find when it's time to assemble.

Pick the components: When it's time to build the kit, workers pull each item from its storage location. This can be done ahead of time in bulk or on a per-order basis, depending on your workflow.

Assemble the kit: All the picked items are brought to a dedicated station where they're grouped, inspected for accuracy, and packed together as a single unit. Any branded inserts, labels, or instructions are added at this stage.

Label and store/ship: The finished kit gets a new SKU or barcode so it can be tracked as one product. From there, it's either stored as ready-to-ship inventory or sent directly to the customer.

Implementing Kitting: The Best Practice

Implementing kitting doesn't require a complete operational overhaul. A few deliberate steps can get you up and running.

Analyze your order history to identify products that are frequently bought or used together — these make the best kitting candidates.
Design your kits by defining the products, quantities, and packaging for each bundle.
Assign each kit a unique SKU so it can be tracked as a single unit in your system.
Set up a dedicated assembly station in your warehouse with the right tools and packing materials.
Update your inventory system to track both individual components and finished kits so stock levels stay accurate.
Train your team on the assembly, packing, and quality check process.
Start small and test with a limited batch before scaling up. Review and adjust your kits regularly as demand evolves.

Warehouse Kitting: Make Your Fulfillment Process More Efficient

Warehouse kitting is a simple but effective order fulfillment strategy that can save your business time and money, not to mention make your warehouse considerably cleaner, safer and more organized!

Remember - Easyship can be your partner in eCommerce order fulfillment! Be sure to sign up today to take your order fulfillment and shipping to a global level!

Kitting FAQ

What do you mean by kitting?

Kitting is the process of grouping multiple individual items together and treating them as a single unit (kit) for sale or fulfillment.

What is kitting in a warehouse?

In a warehouse, kitting involves assembling separate SKUs into a ready-to-ship package before orders are fulfilled.

What is the kitting process?

The kitting process includes selecting items, grouping them into a kit, assembling/packing them, updating inventory, and storing or shipping the completed kit.

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What is Kitting? Benefits & How It Works