Kitting is $expen$ive$ either in setup costs to automate it or in per piece labour costs. US minimum wage varies per state (and in some cases per city, with NY expected to reach $15/h next year) upwards from the federal minimum of $7.25/h. Average pay in China is around $4.90 USD/h and the minimum wage in Shenzhen is only $2.90 USD/h, so its typically going to cost around 3x as much to kit in the US, and you'll have difficulty getting quality staff, so your defect rate is likely to be higher.
Lets consider a high end through hole resistor kit: 10x E12 values resistors for all decades from 10R up to the 100K decade and E6 values for 1R and 1Meg decades, so 840 resistors total in bandoleer taped strips of 10. That's 84 strips per kit. Assuming you've got the space to kit 1000 units at a time (i.e. spread out 1000 kit boxes, say 10 across by 100, long on a *Loooooooong* workbench), for each value you need to cut 1000 pieces of 10 from the bandoleer, stamping the value on the tape (I did say high quality kit) at lets say 4 seconds per piece and lets guess the setup time is 5 minutes (get reels or bandoleer boxes from stock, set stamp, return excess stock, update stock level), add 1 second per kit to walk along the bench dropping a strip in each box and you are up to 5300 seconds, or 5.3 seconds per kit. Times 84 and allowing about 5 seconds to close and seal the kit box, you are looking at 0.125 of an hour per kit. Assuming you can maintain about 90% productive work, that will put $1 on the cost of each kit or $2 in NY. Kit that in Shenzhen, paying halfway between minimum and national average wages so you can recruit and retain good workers, and with the higher cultural tolerance for micro-management, you can probably kit that for $0.50 USD per piece. N.B. that's labour costs only. There will be per unit costs for packing materials, and also amortization and recurring overheads that need to be divided [per unit over the the total kit production.
That's not even a complicated kit - throw one of each item in a small box. There's no individual bagging or added packing materials to protect individual fragile parts and minimal individual labelling. The extra handling required will push the labour costs up considerably for more complex kits.
I just don't see how its possible to compete on commodity component kits against EBAY sellers if you are doing your kitting in a 1st world country. I think the only model that may work is to operate it as a club, where the members put together a list of parts wanted, and as soon as you have 90 signups for a particular list, qty 100 of each item are ordered, (to allow for shortages and defects) and when all parts are received about 10 volunteers come in and kit, and get a kit for their labour. However that require *MUCH* more organisation and commitment than low-level club kitting* which is difficult enough to organise unless there is an established tradition of it in that club. Also it only takes one flake to screw things up badly . . .
The economics differ considerably if you are kitting rare and/or high value parts. The tighter control you get kitting locally and faster time to market make it viable *IF* you can get the volume. Kitting the $270 kit mentione above probably doesn't even come to 5% ($13.50) of its RRP.
* eg: a group of 10 members agrees a parts list and divides it up between them, then you all go off and order your 1/10 of it, repack in 10 bags and meet up again to swap one of your 1/10 kit bags for one of each of the others
P.S. I cant think of a quicker way of killing your enthusiasm for the hobby than getting into high volume kitting.
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