What is the difference between Kits and assemblies?

Assemblies have to be created using a special transaction that takes the components out of inventory and adds the finished product to inventory. Basically, assembly products are a real product with actual value.

Kits are more of a representation of a collection of products. The components don't leave inventory until the kit is sold on a sales order. The kit product itself is non-inventoried and doesn't have any value on its own.

For more information on this, please view this article.