Settle provides flexible support for businesses that sell product bundles, which are groupings of 2 or more items sold together. These items can include finished goods and raw materials like packaging. This document focuses on how Settle handles Kit to Order bundles, a common setup where the bundle is created as a standalone item in sales, inventory, and accounting systems without detailed component information.
Kit to Stock Bundles are those that must be pre-kitted in order to be sold. For more info on Kit to Stock Bundles, see Bills of Materials (BOM).
Understanding Kit to Order bundles
In a Kit to Order scenario, the bundle is treated as a single, distinct item. For example, a Summer Bundle might be sold, but the inventory and sales tracking are managed separately for the bundle and its individual components (i.e. SPF 45 sunscreen, SPF 60 face sunscreen, a decorative bag, and an insert).
Settle addresses the following challenges associated with this approach:
Inventory Accuracy: Ensuring accurate inventory levels for both the bundle and its components.
Sales Tracking: Correctly recording units sold for bundles and individual items.
Demand Forecasting: Providing accurate demand data for forecasting purposes.
Landed Costs: Calculating the landed cost of the bundle based on its components.
Settle's solution for Kit to Order bundles
To be successful with Kit to Order Bundles in Settle and have proper handling of inventory, sales, forecasting, and landed costs, ensure the following:
1. Bundle setup
Ensure there is a Catalog Item in Settle to represent the bundle mapped to the appropriate Sales Channel SKU.
A Bill of Materials (BOM) is created for the bundle, specifying the component items and their quantities.
The BOM Type is set to Kit to Order.
2. Sales Order processing
When a sales order is received for the bundle item:
Settle does not decrement the on-hand inventory for the bundle item itself.
Settle does decrement the on-hand inventory for the component items in the BOM, based on their respective quantities.
Example: For each Summer Bundle sold, 2 units of SPF 45 sunscreen, 1 unit of SPF 60 face sunscreen, 1 decorative bag, and 1 insert are deducted from inventory.
Settle does not record a unit sold for the bundle item in end of month inventory reports.
Settle does record units sold for the component items.
3. Landed costs
When a Catalog Item is created with a BOM of Type = Kit to Order, Settle calculates the landed cost of the bundle by summing the landed costs of the component items, multiplied by their quantities in the BOM.