Kitting for Gift Boxes and Variety Packs, Step by Step

Kitting is putting separate items together into one sellable unit: a gift box with chips, jam and tea, a variety pack of three sauces, a sampler of soaps. There are two ways to do it. Build the boxes ahead, as a small production run that takes the components off stock and puts finished boxes on, or build each one when an order comes in. Either way, the box is made of stock you already track, so the inventory has to follow it: the components go down, the boxes go up, and for food each box should still trace back to the lots inside it. Below is the difference between the two ways, a gift box costed, how stock and lots move, and how to plan a holiday run.

The short version

• Kitting: separate items combined into one sellable unit.
• Build ahead (assembly): a run turns components into finished boxes before orders arrive.
• Build to order: each box is put together when it's ordered.
• Either way, components come off stock and the box carries its own cost.
• For food, each box should trace to the lots inside it.
• Plan the holiday run around the component you'll run out of first.
• TaroStack builds boxes as a recipe, with lots noted and costs worked out. More below.

Build ahead or build to order

Building ahead turns the box into a product with its own stock and its own lot, which makes wholesale orders and holiday peaks easier. The risk is boxes left in January, with components inside that could have sold on their own.

A gift box, costed

Windward Roots, the made-up taro business I use in these examples, sells a holiday box:

The components count at what they cost to make, not what they'd sell for alone. Sold wholesale one by one, the chips, jam and tea would bring $18.91 and leave $7.70; in the box they leave $8.56 at wholesale, and the customer gets a gift that's ready to give. The jam's and tea's costs are worked out in starting a jam business and tea business profit margin.

How stock and lots move

Building 200 boxes ahead:

Notice what's left: 60 jars of jam and 30 pouches of tea for everyone who wants them on their own through December. The run is a decision about what you'll stop selling separately. And for food, each box gets a lot code of its own, recorded with the lots of the chips, jam and tea that went in, so a recall of one jam batch finds the boxes it went into. How lot codes work is in how to create lot numbers.

Planning the holiday run

1. Forecast boxes from last year's sales and this year's wholesale orders.
2. Work out every component needed for that many boxes.
3. Find the limiting component: the one you'll run out of first, counting what you also sell separately.
4. Order packaging early: printed boxes often have long lead times and minimums.
5. Build in batches through November, not all in one week, and keep the box lot linked to its components.
6. Watch dates: build so the shortest-dated component still leaves room on the shelf.

The capacity side, how many boxes a day the packing table can turn out, is in how to calculate production capacity.

Where this stops working

On a spreadsheet, a gift box is a row that goes up, while the chips, jam and tea inside it never go down, or go down by hand when someone remembers. By mid-December the sheet says 260 jars of jam when there are 60, the box run has quietly eaten the stock meant for wholesale, and nobody knows which jam batch is in which box.

How TaroStack does it

TaroStack treats a gift box as what it is: a recipe made from stock you already have.

A box is a recipe. The holiday box is a recipe whose ingredients are the finished chips, jam, tea and the box set. Record a run of 200 and TaroStack takes each component off stock from the lots you used, notes them in the batch record automatically, and puts 200 finished boxes on with their own lot code and best-by date. So the components go down and the boxes go up in one step, and a recall of any jam lot finds the boxes it went into, and who bought them.

The box is costed from what's inside. Each component carries its own actual cost, from its own batches, so the box's cost is the real cost of what went in, plus the box set. Margins are reported per product, so you can see whether the box earns more than selling its contents wholesale.

And the run is planned. "What could I make right now" says how many boxes the shelves can make today. Planning turns orders and your own sales history into what to make and buy, so the box run and the jam your cafés expect both fit, and the printed boxes are ordered with their lead time. Oldest dates go first everywhere stock is picked.

Lots and recalls are on every plan, from $49 a month; recipes, batches, planning and costs per product are on Standard at $99. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

What is kitting in inventory?

Combining separate items into one sellable unit, such as a gift box or variety pack. The components come off stock and the kit becomes a product with its own stock, cost and, for food, its own lot.

What is the difference between kitting and assembly?

They're often used for the same thing. Some use kitting for boxes put together at the time of order and assembly for building finished units ahead of orders.

How do you track gift box inventory?

Treat the box as a recipe: when boxes are built, take each component off stock and add the finished boxes. For food, record which lots went into each box run so a recall can find them.

How do you price a gift box?

Add the cost of each component, the box and its fillings, and the assembly time, then price for your margin. In the example, a box costing $14.94 sells for $39 retail and $23.50 wholesale.