In general, when sending us your items, a compliant ASN requires having only 1 item type/SKU per box. If you are sending 5 sizes of a t-shirt design, those would be 5 different SKUs, and therefore arrive in at least 5 different boxes. However, what if the run of t-shirts only includes 5 units of each size? It doesn't make sense to send 5 boxes with only 5 shirts in each box, when you could easily (and more affordably) fit all 25 shirts in 1 box.
In situations like these, you will create your ASN with the "Pallets & Boxes" toggle checked in the Create ASN page:
The "pallet" you are digitally creating is going to relate to the physical outer box. Inside the box, you will separate each SKU into its own container, which will relate to the "boxes" on the digital ASN. Often, clients opt to use bags to accomplish this:
In the above photo, the client has sent their t-shirts grouped together in bags by SKU (size). These bags are labeled with the box labels generated at the end of the ASN creation. They are then all placed in one box, which is labeled with the pallet label:
On the ASN creation page, the final result will look like this:
To summarize: "pallet" = outer box, "boxes" = inner containers/bags.