What is a "Kit"?
In Luminous, a kit is essentially a bundle or collection of items that are sold together as one product, but it's important to know:
A kit is not a physical item you keep in stock.
It's "virtual stock," meaning it doesn't physically exist pre-assembled in your warehouse.
A kit is simply assembled at the time the customer places an order.
Example:
Imagine you're selling a "Gift Kit," which consists of:
1 Coffee Mug
1 Bag of Coffee Beans
1 Spoon
This "Gift Kit" is never stored as one single item on your shelf. Instead, you keep mugs, bags of beans, and spoons separately in your inventory, and only when the customer orders the kit do you pick and pack each individual item together to ship.
Why a Kit Doesn’t Have Its Own Cost:
Because kits don't physically exist in inventory, they don't have a fixed cost themselves. The cost of goods sold (COGS) is always derived from the individual components within the kit.
Here's why:
Each component (the mug, beans, spoon) is purchased and tracked separately.
The individual components each have a landed cost, meaning their purchase price plus any shipping or fees to get them into your inventory.
When you sell a kit, Luminous automatically breaks apart the kit into the separate components to calculate costs.
Example:
Component | Landed Cost |
Mug | $4 |
Coffee | $8 |
Spoon | $1 |
When a customer buys the Gift Kit, you don't record a cost of "$13" under the "Gift Kit" item itself. Instead, Luminous will deduct each component's cost separately ($4, $8, and $1) from your inventory's value. The kit itself never directly hits your Profit & Loss (P/L); the individual components do.
Why the Cost of a Kit Is Always Changing:
Since the kit is not a fixed item but rather a combination of components, the cost of the kit is dynamic and can frequently change. Each component's cost may fluctuate because:
You might replenish stock at different prices.
Shipping, tariffs, or supplier discounts could change component costs.
Different lots of inventory may have different landed costs (cost layers).
As a result, every sale of a kit can have a slightly different cost associated with it, especially when you have numerous components.
Example:
If you buy mugs this month at $4 each, and next month your supplier increases the price to $5 per mug, the cost of your kit adjusts dynamically:
January: Mug ($4) + Coffee ($8) + Spoon ($1) = $13
February: Mug ($5) + Coffee ($8) + Spoon ($1) = $14
The kit sale in February is now more expensive for your business, even though the kit's selling price to the customer might remain constant at $20.
How Revenue Works with Kits:
When you sell the kit, the customer sees and pays a single price (e.g., $20). Internally, you might want to allocate this revenue proportionally to each item in the kit.
Example:
For the $20 Gift Kit:
Item | Proportional Allocation |
Mug | $5 (25%) |
Coffee | $14 (70%) |
Spoon | $1 (5%) |
This proportional breakdown helps you clearly analyze which items generate profit or loss.
Why Kits Don't Exist in a 3rd Party Warehouse (e.g., Amazon FBA):
In third-party warehouses or fulfillment centers like Amazon FBA, inventory must be physically present as individual products. Amazon manages physical stock, not virtual assemblies.
FBA requires each item to have its own barcode and be physically available.
A "kit" doesn't physically exist because it's not assembled until sold. Amazon can't handle this dynamic, virtual bundling.
If you want to sell a "kit" via Amazon FBA, you'd have to physically pre-pack and label the bundle as a single product, send it to Amazon, and treat it as a single inventory item, not a virtual assembly.
Example:
If you wanted to sell your "Gift Kit" via FBA:
You'd have to physically pack the mug, coffee, and spoon together as one box, assign it a unique barcode, and ship it pre-assembled to Amazon.
Amazon would treat that pre-assembled bundle as a single inventory unit, with a fixed cost associated.
In contrast, your virtual kit system in Luminous is far more flexible, doesn't require pre-assembly, and allows dynamic costing based on individual items.
Summary:
Kit (Luminous) | Pre-packed Bundle (FBA) |
Virtual (not physical) | Physical (already assembled) |
No fixed cost (component costs only) | Fixed cost (one pre-packed unit) |
Dynamic cost (changes regularly) | Static cost (once assembled) |
Assembled at order time | Assembled beforehand |
Revenue split proportionally | Revenue tied to single product unit |
In short, a kit in Luminous is a flexible, virtual collection of items that only exists at the moment of sale, and costs are managed at the individual component level, providing more accurate and dynamic tracking of costs and profitability.