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Economies of scale
Obviously anyone can make a shopping list and compare the costs between a kit and the individual parts to see if and how much is being saved. And I believe most will do just that before buying.
The potential advantage of buying a 'kit' as opposed to sourcing the parts individually is due to the economies of scale.
If you buy parts individually from vendors, you're still paying a middle man. Plus you're paying shipping/handling on every item that comes from a different vender or manufacturer.
Many if not all manufacturers do not offer price breaks to individual buyers. They instead offer the price breaks to vendors who buy in quantity.
A vendor who buys a large quantity will then have an advantage over his competitors regarding pricing.
Buying parts in kit form from a reputable vendor takes the guesswork out parts compatibility as long as there is good communication between the parties.
If building a no holds barred, spare no expense engine this probably wouldn't be the way to go, although there are some good packages offered by Mitchell, Shafiroff, Kasse and others.
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