Bundles

What is product bundling?

Product bundling is a technique in which several products are grouped together. They’re then sold as a single unit for one price. This strategy is used to encourage customers to buy more products. McDonald’s Happy Meals are an example of product bundles. Instead of selling a burger, soda, and french fries separately, they are sold as a combination. This leads to more sales than offering them separately.

Advantages of product bundling

Bundling helps you do much more with your existing stock. Let’s take a look at the advantages of product bundling and how it can be beneficial for your business.

Increase your average order value

Product bundling can increase the profits and sales of individual items over time. By grouping your items together you can make your customers buy more than one product during a single purchase, which increases your average order value. For example: Instead of buying just one pencil during a single purchase, your customer can be given an option to buy a pencil, eraser and sharpener as a bundle, making them purchase more than one product thereby increasing your average order value.

Decreases marketing and distribution costs

This also enables you to sell more and decrease marketing and distribution costs. Instead of marketing every product you can group complementary products together and market them as a single product. By packaging different items together you only need one warehouse bin to store them instead of different bins. Also, bundling helps you ship fewer boxes of individual items and saves you money on postage. Instead of making print and wed ads for every single item you can show them as a bundle which helps you save more on your marketing costs and at the same time markets all your products. For example: if you have 10 individual products you need to market and sell 10 products, but if you bundle them you market and sell them as a single unit, helping you increase efficiency by reducing marketing and distribution costs.

Reduce inventory waste

Merchandise that doesn’t get sold remains in your inventory as dead stock, adding to your holding costs, and is eventually discarded as waste. You can use this method to clear out this dead stock before it becomes a problem. If you bundle a slow-moving or stagnant item with a faster-selling product, customers will see the bundle as a bargain and be more inclined to buy it. This helps reduce your inventory waste, free up warehouse space, and decrease your inventory holding costs.