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How to Maximize Profits with Product Bundling

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Rachel Espazien

How to Maximize Profits with Product Bundling

Product bundling consists of putting together two or more different products under one SKU and selling them as a single SKU. Usually, these products will be a sort of kit or complementing merchandise that is to be used together. Creating bundles is an important part of online marketing and scaling your brand.

We know what bundling is, now let's go over the why. In this next section I will give you some of the main reasons that companies choose to bundle. These points will help answer two vital questions. Why is bundling so popular? And why is it important for your business?

Why Bundle

Streamline Ordering Process

Bundling is a great way to streamline the ordering process. Instead of wasting time searching for the products that they want to use together a customer can simply choose a bundle that meets their needs.

For example: a customer wants to do a 30 day detox. In order to do this detox they will need the detox guide booklet, 30 packets of daily detox powder mix, and one bottle of detox vitamin supplements. Instead of going through the process of researching what they will need and looking through your products to add them to the cart, they can simply choose the ‘30 Day Detox Bundle.'

This allows your customers to save time, forgo extensive researching, and order quickly from anywhere on the go.

Save On Processing Cost

Rather than picking, packing, and shipping out multiple units of a single product to one customer, bundles automatically combine multiple products into one SKU.

Not only does bundling save on shipping cost but it also saves on time, labor, and steps for the one doing order fulfillment. If you use a 3PL to ship your online orders this could mean significant savings for your company.

Reduce Inventory Waste

Brands that only sell individual products and don’t take advantage of product bundling will see a greater waste of inventory. Some products will inherently take off better than others and sell quicker. Unpopular items may get left behind and end up not selling through.

With a bundle you can group dead or less popular items with best sellers, this allows you to make more sales of products that are failing on their own.

Increase Order Value

When customers feel like they are getting a deal they end up spending more. The increased value of a bundle for a lower cost than the items could be purchased individually is attractive.

For example: a customer wants two $5 items but sees a bundle for $12 for three $5 items. Though they weren’t planning on buying that third item, it is only a $2 upcharge, so they go ahead and get the bundle.

The bundle leaves your customer feeling like they made the best decision and leaves your company with more profit and quicker inventory overturn.

Types of Bundling

We’ve covered why brands use bundling, now it’s time to turn to your options. When it comes to bundling there are many different types of bundles and each with its unique purpose and benefit. The main types of bundles and their definitions are as follows.

Pure Bundles

A pure bundle is when the items sold in a bundle can only be purchased exclusively together. These items will not be available for individual sale. Mixed Bundles Mixed bundles consist of a variety of items that can be purchased separately, sold at a discount together. These items can be purchased individually for a slightly increased cost per unit.

Themed Bundles

Themed bundles may contain products from a variety of categories that complement each other. While unique, all of the products will center around one single theme.

Limited Edition Bundles

Used to boost sales around the holidays or big events, limited edition bundles consist of products that won’t stick around for long. These bundles often fall under the themed bundle category as well.

Sample Bundles

Sample bundles are simply that, a sample. A sample bundle will contain several products that you already sell in full size, but in a smaller portion. These samples cannot be purchased individually but only as a bundle. The full size products however may be purchased outside of a bundle.

Add-On Bundling

Not your traditional bundle, add-ons are bundled virtually rather than being kitted prior to sale. This could, for instance, be a product that is recommended to a consumer at a lower cost based on what they are already purchasing.

How To Bundle

How do you make amazing and profitable bundles that your customers will love? By following these seven simple steps:

1. Study Purchase Behaviors Study the statistics of your customer’s past purchases. What do they normally purchase together? Notice how many items are in a typical order. What spending habits do you detect? From studying past purchase behaviors you will get an idea of starter bundles to create with existing products that will speak to your current customer base.

2. Focus On Packaging At Viable Shipping we often talk about packaging. This is because we are passionate about product presentation and good branding. When creating bundles it’s important to consider two things when it comes to packaging. Protection and presentation. Both are of equal importance.

3. Make Sense Not only do your product bundles need to be intriguing and boast of great value, they also need to make sense. Though you might have a broad niche or several different niches, your bundles should reflect just one. All the items in a bundle should complement each other.

4. Leverage Popular Products As mentioned in the section about reduced inventory waste, bundles can be leveraged to help you run through old inventory. Do this by identifying your top-seller products, then consider which of your low margin products could be paired with it to increase sales of the lesser.

5. Perfect Your Pricing You will find more success when you pair items of differing cost values into a bundle. Customers may not be willing to purchase a bundle consisting of 3 $60 products, but when they were planning on purchasing one product for $60 what’s three products for $75?

6. Pre-Bundle A great way to save on cost with bundling is to have your fulfillment warehouse partner pre-assemble bundled kits. This will directly impact pick/pack fees as only one SKU will need to be picked in the place of each product’s individual SKU. Pre-bundling also allows you to perfect the packaging and presentation of each bundle ahead of time so that the bundle reflects the nature of your brand.

7. Partner With A Great 3PL Perhaps the most vital part of bundling successfully is finding a great third party logistics partner! Not only one who will be able to accommodate and assemble your bundles or kits. But also get your orders out to your customers on time, discount pick and pack fees when shipping kits, and handle recurring subscription orders.

If you are still unsure about choosing a 3PL, Viable Shipping is a reliable and reputable option. We are here to walk you through everything from the question phase, to onboarding, to creating your very first bundles. As you start on your journey of bundling great products and growing your brand, we’d love to be your partner. Contact us today to learn more about our services and pricing. And don’t be afraid to get out there and create some imaginative and intriguing bundles.

The combinations are endless!