FBA sellers are always looking for an upper hand on the competition.
Aside from lowering the price, what other options do merchants have for capturing more of the Buy Box? A popular technique involves kitting, in which the seller bundles several items into a single purchase.
In this post, we’ll explore how FBA kitting can benefit your business. We’ll also share a few tips for getting started with kit building.
Kits Give Customers More Valuable Buying Options
Sure, you’re in the business of making sales online. But, on a much deeper level, you’re in the business of creating highly satisfied customers. Offering reliable products, reasonable prices and great customer service are just a few of your specialties. Such dedication to the customer pays off in a number of ways, as evidenced by your positive feedback rating and growing profit margins.
Of course, you’re always looking for additional ways to serve your customers. Recently, you’ve heard other merchants talking a lot about kitting. They say it’s a win-win, but how can it actually work for you?
As a simple example, let’s imagine that you sell a variety of sports memorabilia and collectibles. In anticipation of opening day (which was this week!), baseball card sales are really starting to heat up. Serious collectors buy cards in hobby boxes (usually packs of 24 or 30), orders you’ll gladly fill. But based on customer feedback, you’ve noticed some customers have recently been asking for smaller quantities (the typical Buy Box price for a hobby box is between $75 and $90, which is out of reach for some customers). A few competitors have already started selling individual packs, but what’s the fun in that? An individual pack retails for $3, which means it’s barely worth your time.
Then, genius strikes: why not sell a custom bundle? After some quick research, you confirm your suspicion that competitors haven’t started bundling packs. You move quickly by sharing your plans with the manufacturer, ordering the necessary inventory, breaking bulk, reviewing Amazon’s bundling guidelines, preparing FBA shipments and optimizing the new Amazon listing. Soon, orders start to roll in well before the first pitch of the 2017 season.
As you can see, kitting creates new buying options for customers, while simultaneously differentiating yourself in an increasingly crowded market.
Kits Offer Economies of Scale & Better Margins
Back to our example, you also notice that the most serious collectors tend to purchase several hobby boxes at a time. In fact, as you review your order data, you realize that many orders follow one of two patterns:
- Three boxes, one of each major sport (baseball, basketball and football) for the current season
- Two baseball boxes, one of this season and last
Again, after some quick Amazon research, you’re surprised to learn that no other merchants have picked up on this trend. Since your supplier ships product to you in standard cases (12 boxes per case), there’s not too much risk for you to test these new bundles (especially since the manufacturer loves your ideas). You could always sell the individual boxes, if the kitted ASIN flops.
With full ownership of the Buy Box on these kitted ASINs, and a well optimized listing, your average order amount increases – and so does customer loyalty. By anticipating customer needs, you’ve made their lives more convenient, saved them money and thwarted the competition (at least for now). You’re rewarded with fewer price wars, decreased FBA expenses (since bundles allow you to sell more items with fewer transactions) and an overall increase in operating margin.
Simplify the Kitting Process
As you build more kits, it may become challenging to keep everything organized. After all, you’re still fulfilling orders for individual hobby boxes (in addition to your new bundles). With so many supplier POs and FBA shipments to keep straight, using a tool like RestockPro (try it free) can be a wise investment.
RestockPro is integrated to your Amazon Seller Central account, which means your FBA inventory data flows seamlessly into our intuitive kit interface. RestockPro then uses this information, allowing you to easily identify which items are part of a kit. No more second-guessing yourself when it comes time to reorder certain SKUs. RestockPro helps you to reorder the right parts, every time.
Overflowing with on-hand inventory that is kit-worthy? No problem; RestockPro’s Kit Optimizer can help you identify the best bundle mix. The Kit Optimizer will look at existing inventory and build a profit-focused kitting plan (based on your business rules and forecasted demand).
And, most importantly, you’ll always be able to tell how profitable a kit is performing on the Amazon marketplace. For any kit you offer, RestockPro instantly calculates actual profitability data by incorporating sale price, Amazon fees, COGS and other criteria. No more number crunching or spreadsheets!
Kitting is a Smart Move
Ready to join the thousands of other merchants who are benefitting from kitted products? Listen closely to your customers, analyze previous order data and give it a try.
And, as you grow your kitting operation, be sure to rely on RestockPro!
This post is accurate as of the date of publication. Some features and information may have changed due to product updates or Amazon policy changes.