Guide To Product Bundling
Learn the steps to take to increase your average order value using product bundling.
Product Bundling: How to Sell Products Using Bundle Marketing
A little black dress is an investment. It will last forever and fits so well it makes you look slimmer in all the right places. Now if you add a clutch to that dress and a pair of shoes it will all work together making the outfit a hit. That is a birds eye overview of product bundling.
There are some things that are just meant to be together. That’s why product bundling is a powerful selling tool that is used by many businesses, from fast-food restaurants to wireless companies.
Product Bundling 101 reveals how to use this powerful tactic to supercharge your Amazon sales. You’ll discover how to identify high-priority product categories for bundling, how to choose which products to include in your bundle, and much more.
Bundling is more than just a matter of putting several similar products into one package. It's based on consumer psychology and has very specific dynamics that must be understood if you want to do it right.
A “curated collection” is a deal that offers value by combining selected items in a logical, easy-to-understand way that makes sense to the buyer. They feel good because they get something valuable for cheap, or even for free. In fact, sometimes they end up spending more than if they had purchased the individual items from separate sellers, because the items were sold separately in the first place.
For the business owner, it’s a cross-selling tactic that increases sales volume and enhances average order value.
To understand what product bundling is, and the different types of strategies used in ecommerce, we must first discuss the three main aspects of selling online: (
1. product discovery / selection, (
2. marketing, and (
This guide is part of the build an ecommerce brand track.
What is product bundling?
If you haven't done so already, now is the time to start setting up your own FBA (Fulfillment By Amazon) storefront. This will make it much easier for your customers to buy products they've seen in your emails and ads, and it will also give you an opportunity to up-sell to them with a higher percentage of sales that are actually conversions. It’s a smart strategy every ecommerce business uses year-round to generate more revenue per customer. It's also a very useful tactic to employ round the holidays, or for one-time promotions. You can bundle products together to make the giving experience easier for your customer, and he will appreciate the thought and effort you put into this "bundle" of products.
4 types of ecommerce product bundling strategies
Offer a variety of ways to buy your products. One option is to offer a discount if you buy a certain number of items together. Another option is to bundle a slower moving item with a faster moving item. A third option is to let your customers buy what they want when they want it and stop worrying about maximizing your sales volume.
Product Bundling Strategies 1. “Buy 1 Get 1 Free” - This type of offer is very common and is valid on almost any type of product, even books and videos.
1. Mixed bundling
Most commonly, product bundling is done in a mixed fashion, where multiple unrelated products are bundled together as a package. This is a statistical model that predicts what products you should sell to which customers based on what your competition is selling to the customers.
Another example is Bare Escentuals, which sells an amazing range of cosmetic products that are not tested on animals. Their tagline is “For the animal in everyone” and they have many loyal customers who buy their products for this reason alone. This is a very smart bundle from a marketing standpoint. By offering everything as a bundle, it helps to drive sales, since their customers don’t have to pay separately for each product. What do you think? Agree or disagree with what I wrote? Or did I get anything important wrong? Please share your thoughts by leaving a comment below. I’d love to hear from you. P.S.
2. Pure bundling
Pure bundling is a big reason people love to shop Amazon. People get to buy more than they would buying each item separately. It also gives sellers an opportunity to upsell and cross-sell without ever having to leave the comfort of their own home or office. Another good example is when you purchase a box of tissues, you also get a small plastic baggie filled with something that is usually used to pack down larger quantities of tissues, such as a cardboard box. There are dozens of other "gotchas" like this buried in those millions of emails... but... By limiting the choices for the customer, it leads to a decline in sales. That's why it's important to offer something else to sweeten the deal for the customer. In this case, we're going to offer a “bundle discount”.
Bundling doesn’t always work. Sometimes, it backfires so badly it can actually cost you money. A study done by Vineet Kumar for Harvard Business School found that when Nintendo bundled video games (that were also sold as individual units) the unit sales of individual video game units increased by 100,000 but the net profit of the company decreased by more than $1 million. But when Nintendo tried pure bundling instead, their overall sales went down by 20%. When they offered the family pack, which included a large TV and many games, their sales went up considerably.
3. Same products
Offering a "bundle discount" is a great way to increase sales volume. It's especially effective when you're selling a related group of products as they often will purchase more than one if the savings are substantial enough. When it comes to DTC brand building, it's often best to start with essential or personal care products. These types of products are usually "set-and-forget," and you can often get away with selling them at a far lower gross margin than you could when you're selling a premium or fashion related product. Incentivizing customers to buy in bulk upfront is a proven sales technique. The way it's used most often is through "same-product bundling". This technique has the added benefit of making it easier for the merchant to determine what products to group together, as well as what price to charge for the bundle.
1. Another example of AOV incentivization is, if you sell a $100 bottle of shampoo that costs you $15 to fill and you advertise that it will wash a normal head of hair 20 times for $
2.00, then the customer who is willing to buy 6 bottles (at $20 apiece) gets a deal where he pays only $60 (20 x $
3. to get all those 20 uses.
People who buy this product have the option of choosing how many bottles / canisters they want. They also have the option of getting just one or multiple bottles / canisters.
4. Excess inventory
Bundling isn’t just one of the most effective marketing strategies… it’s also a great way to get rid of old, unwanted inventory so you have room to stock up on new products. Inventory carrying costs go up when your stock stays on the shelves longer. In this case, slowing down the processing of your orders will decrease your carrying costs and thus, increase your bottom-line profit.
If you have a SKU that isn’t selling as fast as you’d like, you can easily “bundle” it with similar products that are either new, selling faster, or are in higher demand. You do that by building up your "buffer stock." That way, you'll be able to move fast-moving inventory and bring in newer, hotter-moving inventory at the same time.
Why do ecommerce companies offer bundles at a discounted price?
One of the most important things you can do to increase sales is to offer a discount. It doesn't matter if it's a 50% or 90% discount; offering a discount will generate a higher percentage of sales. You should offer a discount on a bundled (or multi-buy) option whenever you offer a discount on a single item. That way, your customers are more likely to take advantage of your bargain-basement prices and buy more stuff from you and/or refer you to their friends and family.
Offering a product bundle can also encourage customers to purchase more than one product, thereby meeting the minimum spend thresholds for shipping, which also increases Average Order Value (AOV) and offsets the cost to offer free shipping.
It's true, from a fulfillment perspective, it costs as much time and effort to fulfill a $1 product as it does a $10,000 product. The reason is simple: When you get to the bottom-dollar product, there's very little profit (if any) to be had. But, the difference in the revenue you get is completely different. Besides “bundling” (combining the orders from different buyers into a single package) you should consider other ways to bundle that will help you save money. Like offering free shipping on multiple items ordered together, for example. Or offering a discount for bulk purchases.
“Bundles are such a no-brainer” is an understatement. When you start selling via bundles, your sales can go through the roof! It's puzzling to me why more brands don't utilize celebrity endorsements. I mean really, who better to promote your brand than a celebrity that people actually care about? Optimizing shipping costs and getting more product into their home are two important elements in creating a successful Amazon FBA campaign.
One of the most successful entrepreneurs in India. He's the founder of the billion-dollar skin care company, Sharmachure, and the founder of the hugely popular "Karma" chain of retail
3 examples of common product bundles
Did your last few purchases come in a bundle? If so, you are probably a "bundle person". These people are some of the best customers to sell to because they will buy almost anything if it is packaged together. It's highly probable. Here are a few examples of the most common products that are sold together.
1. Shampoo and conditioner
You can find dozens of different type of shampoos and conditioners, each designed to do a specific job. But the most important consideration when you are buying shampoo and conditioner for your horse is to make sure the ones you select are appropriate for the type of hair your horse has. Shoppers who are just learning about your brand will be curious and eager to explore your website. Therefore, they are much more likely to convert to buyers if they can find your website easily on their computer.
When it comes to upselling, brick-and-mortar retailers have the advantage, because they can pair or bundle products together in the same transaction. However, when it comes to upselling via the internet, the “rules of the game” change slightly.
2. Razor and razor blades
Since you will eventually need replacement cartridges and many specialty razors have their own set of blades, it makes sense to sell the entire bundle. It’s a win-win situation for you and your customer.
1. Take a look at their current bundles: The #1 bundle is their flagship razor and shave cream combination that retails for $
This combination shaver, blade refills and wall mount is the perfect set to keep anywhere you travel. When a customer is ready to purchase more blades, they have the option to purchase a 12-pack and save 3% compared to purchasing the single blade.
3. Diet food and beverage products
When you’re trying to lose weight, it’s very hard to eat only what you buy in a store. But with this simple trick, you’ll find it easy to get the foods you need without going to a store. "Diet-friendly bundles" are a great idea for any brand that wants to help their customers easily get started with a new diet routine.
Brand name Synchro offers different levels of keto-friendly bundles, with the most popular being ‘Keto Bundle 1,’ which includes protein powder and a keto-friendly chocolate bar along with a 4% savings. This is a great way to make sure you are getting the best recommendation for your needs. By allowing you to receive two products simultaneously they get to make up their own mind about which product they think you will enjoy more.
How to sell a product bundle
When you put two or more items in your Amazon Store, there are a few factors you should consider before you decide to group those items together. It’s important to know your customers’ buying behavior – especially when it comes to your super hottest products! You see… most new customers don’t have a clue about how to “connect the dots” when it comes to your super hottest products. This info is so important, I think it needs to be repeated here. Are you getting the idea that selling a bundle of products can reap HUGE benefits for your profits? If not, you need to read this entire newsletter again.
1. Choose the right product bundling strategy
Here's an update on that situation: After an exhaustive 13-month investigation by the Federal Trade Commission, the FTC has concluded that there was no violation of federal antitrust laws by Nintendo and that all of the claims made by the advertisers There are many different ways to bundle products together. Some of these work better than others. This book reveals the different ways to bundle products together and explains why some strategies work better than others. Keep testing! It pays off big time. Choose a product bundle option that works for you, and keep testing. You'll be happy you did. I hope these few simple examples have given you a few ideas for how to start creating compelling sales messages. Bundling items into bundles is one of the most important things you can do to improve the profitability of your Amazon campaigns. Just keep testing and testing... until you find what works best for you.
True Blue Life Insurance says one of the best ways they've used to create successful product bundles is to look at past sales. They say it's a “super effective method” for creating successful bundles. Common purchasing group (CPG) information is a key tool for making more profitable marketing decisions. This book shows you how to access and analyze CPG data, and explains how it can help you identify hot categories for your next promotion. This will help you to find out what your customers already bundle together and what they perceive as valuable. It's a huge advantage in the fierce battle for attention and transaction!
Historical data reveals what items are often bought together. This is a great tool for making decisions when you are struggling with loads of data. The suggestions made in this report will really help you make more money! If you haven’t already, start keeping track of all your customers’ previous orders and their repeat purchases. Once you have this information, you’ll begin to gain valuable insights into what your customers like to buy together. After you’ve gotten to know your marketplace (and it knows you), you should start thinking about strategically grouping your products into bundles that are more likely to generate more sales.
2. Showcase the discounted value
People won’t purchase a bundle unless they can see the value of the items inside the bundle. It’s important to compare bundle prices, both when you are setting them and when you are evaluating them. You’ll see why in just a moment. But first, here’s an example of what I mean. Assume you have a bundle of four books that cost $100 each if you buy them individually but only cost $70 when you buy all four books together. That’s a savings of $30 per book or a total savings of $120. It makes it easy for the customer to understand how much value they are getting when they purchase the bundle. Here’s an example of how to use this formula: Say you are selling a $300 item and a $60 item.
“Bundling” is more than just offering a discounted value. It's also about making it easy for your customers to make a buying decision and to save. In fact, most research shows people are paralyzed by a 100 option menu. That’s why it is so important to create a compelling sales pitch for your client. It is much more effective to have 6 options instead of 50. Or 6,000 options. It's best to keep it simple. Imagine this scenario: You've got a simple website with three options on the home page and an "Add To Cart" button below each of the three options. Let's say the first two options are identical except for the color. And let's say the third option is the most expensive. What happens when a consumer clicks on the green option (the one with the least expensive price)?
Ecommerce brands must always be focusing on bundle options, especially when it comes to Amazon. They should be thinking about it constantly when they're doing any kind of market research, whenever they're creating their marketing campaigns, and whenever they're working on their Amazon store.
3. Have the right logistics in place to manage bundles
It's not enough for your bundles to look good on the Amazon website. Your customers need to be able to click on the "add to cart" button and see a clear "add to cart" button with an accurate, easy-to-read "dimension/sizing" tag that clearly shows the items in their bundle will fit into their cart without going over the edge.
Partnering with a 3PL like ShipBob is easy to do. If you've got existing products in Amazon, you can easily create and update product bundles which include those products. ShipBob is a super-simple, yet powerful SaaS solution that fulfills online orders as fast as your customers can click “Buy Now”. Your ecommerce store can create a new bundle at any time. You can group multiple items in your Amazon package together, so they will be automatically shipped to your customer at the same time.
When you bundle more than one item into a single shipment, the combined shipping cost is automatically calculated and shown in your account. It only takes me a few minutes to create a bundle and it doesn’t change anything for the customer on the front end. And I don’t have to go to my vendor or packager. “I just link SKUs together in ShipBob and customers can buy 3-4 necklaces in a bundle.
Torii Rowe is the co-founder of Mansion, the premier real estate investing education company in the world.
There is no need for any extra effort on your part when a customer purchases the bundle. As soon as Amazon confirms your order, the bundle will be shipped to your customer immediately. Amazon will fulfill the orders, and you will be able to see which of the items were shipped from the fulfillment center to your customer. The reason these two examples work is because of the extreme specificity of what the copywriter is trying to communicate. You can learn more about creating and managing bundles with ShipBob by clicking here.
“When we launched our diabetes subscription service, we knew we needed a fulfillment partner with a tight Shopify integration. 3PLs (Third Party Logistics) are typically old-fashioned. They still use cumbersome Excel spreadsheets and phone trees to communicate with their vendors and customers. “When you are ready to get started, simply contact us via phone or email and tell us what you have in mind. We will create a proposal tailored to your needs that will include all the details and a detailed timetable.
Product bundling best practices
One of the main reasons people don’t do very well on Amazon is they get locked into a “set it and forget it” approach to selling. They set up a certain number of product lines, and then they become a passive observer to the action. You can test different types of product bundles to see how well they go over, which is a lot more room to maneuver than changing up the product itself or making other changes at the manufacturing level, such as kits or sets that come pre-assembled together as one cohesive unit and can’t be sold separately.
When you are first starting out, it’s best not to be too particular about how you group your products. Just keep trying different groupings and see what works best for you. Don’t get too attached to any one grouping. It will take time and experience to learn what really does work.
In this bundle, you get everything you need to know to start an effective direct response (DR) campaign... plus... everything contained in the "Motherload Collection" of my newsletter which is not available anywhere else. When you offer bundles, here are a few more tips for improving your sales:
Don’t discount the bundle. Let the customers see the value.
If you show a bundle of three products, your customer will see it costs $10.00 more to buy the bundle than he would have if you showed him each product separately. That small increase in price will cause him to hesitate before he pulls the trigger and buys that package of products.
Bundle sizes have a huge impact on the bottom-line. Make sure you understand exactly how bundles impact the customer journey and optimize your bundles accordingly.
During the holiday season, it’s a good idea to send high-ticket (high price) products as part of a bundle, especially if you offer a discount for ordering more than one item.
An understanding of pricing strategies in tangential industries will give you insight into the pricing strategies you should use in your primary industry. It’ll also show you alternatives you hadn’t considered before.
Get a free sample of Forever Young’s new product line (valid for 30 days) when you sign up for their monthly newsletter.
Logistical challenges of product bundling
Bundling allows you to sell more products and increase your profitability. It's often predetermined, which means you are selling multiple products together as a single unit. That's Bundling. This can be an issue without proper inventory management and technology. If one unit is out of stock, then the entire bundle is no longer available. In order to offer high-margin, profitable bundles, you have to make sure you have enough product to fulfill all of the orders and still have a healthy (at least somewhat healthy) reserve for unexpected backorders.
Third-party logistics (3PL) partners can be great for solving problems associated with creating and managing bundles, monitoring and changing individual components, and tracking inventory in real-time. They can also be a vital component for success when it comes to growing your business.
Thats the whole picture to product bundling for success. The thinking is critical because you have a red hot buyer and they want to make their purchase even more useful. The checkout is just one key place to seek out a bundle purchase. I hope you found this article useful and now we move into sales funnels, website builds and the selling activities. Enjoy these free resources.
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