Managing Kit Products in Shopify and NetSuite

Kit products have become an effective strategy for Shopify retailers to boost sales and enhance customer satisfaction.

Implementing kits can increase items per order by 15-20%, and average order values by roughly 20%. This boost is largely driven by customers perceiving bundled products as offering greater value, which encourages them to purchase more.

However, the success of selling kits relies heavily on accurate inventory tracking and efficient order fulfillment. Ensuring that all components of a kit are available and synchronized across different sales channels can be daunting without the right tools.

This blog explains how HotWax Commerce simplifies kitting strategy for retailers using Shopify and NetSuite, ensuring smooth operations and an enhanced customer experience in an omnichannel retail environment.

What Are Kit Products?

Kit products, or product bundles, are groups of individual items sold together as a single unit. Retailers use kitting strategies to offer customers an appealing, convenient purchase option, while also boosting sales and optimizing inventory. Kits are often used to move slow-selling stock or promote new products. For example, a customer shopping for a shirt might be enticed to buy a combo that includes a matching tie.

Beyond boosting sales, kitting helps retailers cut packaging and shipping costs. Shipping multiple items in one package reduces costs, and customers are less likely to return a full kit if only one item is unsatisfactory. Thus, kitting not only improves the shopping experience but also streamlines logistics.

What is the Role of Shopify and NetSuite in Managing Kit Products?

Shopify serves as a leading eCommerce platform, allowing retailers to manage their online stores and sell kit products to increase sales and drive customer engagement.

NetSuite, on the other hand, is an ERP system that handles backend operations, such as inventory management and financial data integration. Retailers use NetSuite to manage the associations between the individual components of a kit within their product catalog and to fulfill kit orders from warehouses.

Imagine a customer visiting your Shopify eCommerce looking for the perfect gift. They find a kit, a stylish belt paired with a matching wallet and they're instantly drawn to the convenience and value it offers. However, behind the scenes, managing kits across multiple locations and systems like Shopify and NetSuite can be complex. What happens if one store runs out of belts but still has plenty of wallets? That's where effective kit management becomes essential.

HotWax Commerce solves this with its ready integration with Shopify and NetSuite, helping retailers efficiently manage kit products inventory, and fulfillment across these platforms. By leveraging HotWax Commerce, retailers can ensure accurate kitting and maintain real-time visibility across multiple sales channels. Let’s discuss this in more detail.

Setting Up Kit Products and Kit Inventory Computation

There are two main ways to set up kit products in Shopify. Many retailers use apps like Bundles to group individual products, while others choose to configure kits directly in Shopify and NetSuite. Both methods work, but how you manage inventory afterward is what makes the real difference.

1. Using Bundles App: Many Shopify retailers rely on third-party apps like Bundles to create and manage kit products. These apps allow retailers to combine existing items from their Shopify product catalog to form kits. For example, a retailer can bundle a belt and a wallet into a kit. The Bundles app automatically adds the individual components' SKUs to the kit product’s metafield, simplifying the setup process.

HotWax Commerce downloads kit products from Shopify like any other regular item and reads their metafields to identify the individual components within the kit. This ensures that all components of the kit are accurately tracked and associated with the correct kit during the synchronization.

However, while Bundles makes managing kit products easy, it has limitations, particularly in how it calculates inventory for multi-location fulfillment. The app calculates kit inventory by aggregating the lowest available inventory of each component across all locations. This approach can result in inaccurate inventory counts because it doesn't account for the fact that all components of a kit need to be available at the same location to fulfill the order.

For example, let’s say you have a kit product made up of a belt and a wallet. The inventory of these components is split between two stores:

In this case, Brooklyn has 1 belt but no wallets, and Broadway has 1 wallet but no belts. The Bundles app calculates the kit inventory as 1 because it aggregates the lowest available quantity of each item across locations. However, since neither store has both components in stock, the actual kit inventory is 0, meaning the kit cannot be fulfilled from either location.

Let’s consider a more complex example where the belt and wallet have varying quantities across multiple stores:

Here, Brooklyn has enough stock to make 2 kits (since it has 3 belts and 2 wallets), and Broadway can fulfill 1 kit (1 belt and 5 wallet). The Bundles app calculates the total kit inventory as 4 by summing the total number of belts and wallets across all locations (belts: 3 + 1 = 4, wallets: 2 + 5 = 7). However, this is incorrect because the actual number of kits that can be fulfilled is only 3, that is 2 kits from Brooklyn and 1 kit from Broadway.

Key Takeaways

I. The Bundles app calculates kit inventory by aggregating the lowest available stock of components.

II. This method doesn't account for the need to have all components at a single location to fulfill a kit.

III. The result is often an inflated inventory count, which can lead to fulfillment issues when orders cannot actually be completed.

By understanding these limitations, retailers can better manage kit product inventory and avoid potential stock discrepancies, especially when fulfilling orders from multiple locations.

2. Using Shopify, NetSuite and HotWax Commerce: To mitigate the risk of inaccurate kit inventory computation, HotWax Commerce recommends retailers to set up kit products in Shopify as standalone products, assigning them their own SKUs just like any other item. While these kits consist of multiple components, Shopify treats them as a single unit in the product catalog.

In this case, NetSuite plays a crucial role by linking the kit product to its individual components. HotWax Commerce downloads these kit products from Shopify like regular items and uses its integration with NetSuite to identify the component products that make up each kit.

What about inventory computation for kits?

With HotWax Commerce, managing kit inventory becomes simple and accurate, even if you're juggling stock across multiple locations. No more guessing or overselling, you'll know exactly how many kits you can fulfill in real-time.

Unlike other inventory management apps that aggregate the total available inventory across all locations, HotWax Commerce calculates kit inventory based on the lowest available quantity of each component at individual locations, ensuring that the correct number of kits can be fulfilled at each fulfillment location.

To explain this, let's revisit the earlier example of a kit containing a belt and a wallet:

I. Brooklyn can fulfill 2 kits, as it has 3 belts and 2 wallets (the lower of the two being 2).

II. Broadway can fulfill 1 kit, with only 1 belt available, despite having 5 wallets.

III. HotWax Commerce calculates the total number of kits that can be fulfilled across both stores as 3, based on the lowest available inventory at each location.

In contrast to the Shopify Bundles app, which aggregates inventory across locations and may inaccurately compute total kit inventory, HotWax Commerce focuses on the individual availability of each component at a specific location. This prevents issues where Shopify shows kits as available when, in reality, they cannot be fulfilled at any single location.

HotWax Commerce avoids these inaccuracies by:

I. Tracking kit components individually at each location and calculating the number of kits based on the lowest available quantity of any component.

II. Ensuring real-time updates, so inventory is adjusted the moment a kit or one of its components is sold or replenished.

III. Providing a precise view of available stock for retailers, reducing the risk of overselling or underselling kits, even in a multi-location setup.

HotWax Commerce automatically updates a kit product’s inventory on Shopify whenever a kit is sold or one of its components is either sold or restocked. This real-time sync ensures that retailers always have an accurate view of their inventory, preventing fulfillment issues such as overselling kits that are no longer available due to stock shortages of any component.

Fulfilling Kit Product Orders

Once a kit product’s order is placed on Shopify, it’s downloaded into HotWax Commerce for streamlined order fulfillment. Just like any other order, HotWax ensures these kit product orders are efficiently routed to the optimal fulfillment locations, be it a warehouse or a store. Additionally, HotWax synchronizes the order details with NetSuite, ensuring accurate record-keeping and smooth processing.

If the order is routed to a warehouse, HotWax also syncs the allocation details to NetSuite, where the warehouse teams handle fulfillment. However, if the kit product order is allocated to a store for fulfillment, it appears in the HotWax Fulfillment App, an app specifically designed to assist store associates in fulfilling orders directly from the store. Let’s understand more about kit order fulfillment:

1. Fulfillment of Kit Products in Warehouse: When a warehouse is responsible for fulfilling kit product orders, HotWax Commerce only syncs the kit product’s SKU to NetSuite. The individual components of the kit are not needed at this stage because NetSuite already has the internal associations between the kit and its components.

Once the kit is fulfilled in the warehouse, HotWax Commerce syncs the fulfillment data back from NetSuite. This update marks the kit and its components as fulfilled in HotWax Commerce. At the same time, HotWax also synchronizes the fulfillment details, including tracking information, to Shopify, enabling customers to receive real-time updates on their orders.

2. Fulfillment of Kit Products in Store: If a kit product order is allocated to a store for fulfillment, it automatically appears in the HotWax Fulfillment App. Store fulfillment teams can view the kit product alongside its individual components, which ensures that the kit is assembled correctly for accurate fulfillment.

The fulfillment process begins with the store manager generating picklists for the order. These picklists are then assigned to a picker, who uses the HotWax Picking App to view and scan the items on their list. The Picking App provides a breakdown of the kit and its individual SKUs, reducing the chance of picking the wrong components and ensuring a better customer experience.

After the kit components are picked, they are assembled into the final kit, packaged, and prepared for shipment. Once the order is marked as fulfilled in the Fulfillment App, HotWax Commerce syncs the fulfillment details with both NetSuite and Shopify. This ensures that both systems have accurate order statuses and that customers receive real-time tracking information via Shopify to monitor their shipment.

This is how the kit lifecycle works, from setting up kit products in Shopify and NetSuite, to managing inventory accurately across multiple locations, and finally, to fulfilling kit orders precisely.

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Managing kitting strategy effectively is critical for Shopify retailers to maintain inventory accuracy, avoid fulfillment issues, and meet customer expectations.

HotWax Commerce provides streamlined solutions for kitting, ensuring that all components are accounted for, inventory is accurately tracked, and orders are fulfilled accurately across multiple locations. By providing ready integration with Shopify and NetSuite, HotWax Commerce enables retailers to streamline their inventory and fulfillment operations, improve customer satisfaction, and ultimately drive sales growth through effective kitting management.

Contact an expert to see how HotWax Commerce helps retailers in managing kit products in Shopify and NetSuite.