Growing a business means growing sales, which can be done a few ways. A couple of go-to strategies include finding more customers and increasing your average order size.
Wouldn’t it be nice if you could do both at the same time, all while making your offerings more attractive than the competition’s?
Luckily, there’s 1 simple strategy that does exactly this:
It’s called product bundling.
Product bundling is the process of offering several products for sale as one combined product.
But is it actually an effective way to grow a business?
To test this, researchers in the Netherlands conducted a study to understand the effects of bundles on purchasing decisions.
Their study revealed that product bundling does, in fact, create an incentive for consumers to not only choose to buy from a particular brand (hard enough in and of itself), but even go so far as to switch from one brand to another (even harder).
So if the shop across the street offers a single slice of pizza, but you offer a slice paired with chips and a soda, customers are more likely to choose you over them.
But it’s not as easy as just throwing 2 or 3 products together and putting them on your digital or physical shelves… there a few things you need to know to make product bundling successful.
Read on to check out our 5 tips to start profiting from the power of product bundling quickly and easily.
When it comes to marketing, there are two types of bundles:
2 researchers, Vineet Kumar and Timothy Derdenger, studied the sales of Nintendo’s Game Boy Advance and Game Boy Advance SP consoles, along with the games for both devices, between 2001 and 2005.
Essentially, they found that even though consumers may perceive the value a bundle (the Game Boy + a game) less than the individual components, they still bought MORE units of the bundle than of the individual products.
A driving factor behind this, though, was that consumers had a choice – they could either buy the bundle or buy the game and system separately; a “mixed bundle.”
When Nintendo offered a “pure bundle,” revenues decreased by 20%, meaning hardware sales fell by millions, and software sales fell by over 10. Ouch!
If you want to maximize your ROI from product bundling, make sure you clearly present both standalone and bundle options to your customers.
The key to great bundles is pairing related items together.
For example, a Christmas tree cookie cutter + box of cookie mix + frosting is a festive baking bundle. These products logically belong together and complement each other.
Some producers accidentally find themselves offering a “multi-pack” instead of a bundle.
In this example, a multi-pack would be a star cookie cutter + a tree cookie cutter + an ornament cookie cutter sold together. Since they’re variations on the same product, this isn’t the kind of “bundle” we’re talking about.
You also want to be careful not to offer totally unrelated items, like a 6-plate set + a mop.
Sure, they’re both “household items,” and you might use both in the kitchen, but they don’t match the “buyer’s intent.” When someone is thinking of buying plates, they’re thinking about how they’ll look when they serve dinner guests and if they’ll match their silverware, not how they’re going to clean their floors after everyone’s left.
If you want a quick way to find bundle ideas, search for products related to yours on Amazon, then look at the “frequently purchased together” section under a particular product’s listing.
With all the data Amazon has at its disposal, it’s a safe bet that they’re offering the items that are most likely to sell together, signaling to you which products you’ll be able to successfully sell in a bundle.
Learn more about crafting unique bundles to sell on Amazon here.
An often overlooked value of product bundling is that it allows you to create a totally unique product, with a unique SKU, that your competition will find much harder to replicate.
Think about it this way:
There could be 20 sellers of selling plates that look like some you’re offering.
But fewer sellers could offer a bundle pack of plates and silverware that both look similar to those you could offer.
And if you create a special brand, a trademarked “collection” of dinnerware, copying you will be near impossible.
The more products you have in a category, the more possibilities you have to mix and match to create totally unique listings.
And the more likely your bundles will help you stand out from the crowd.
Recognizing the value of product bundling, the major internet retailers are very friendly toward product bundling and will gladly help you set up new bundles. But any well-established marketplace is great for testing different bundles to find a winning package.
So if you’re business’s ecommerce site is already generating a good amount of sales, the right plugins will help you test out new ideas quickly.
Here’s a bit more information on bundling using top ecommerce platforms:
Amazon has a straightforward list of rules and recommendations for product bundling. Learn more about their policies and recommendations here.
The Shopify app store includes an app that makes it easy to offer bundles just like Amazon’s “frequently purchased together” section, as well as discounts when customers buy them. Check out the app here.
The Woocommerce Extension Store also features product bundling app similar to the one offered for Shopify, check it out here.
Wouldn’t it be nice to be able to read your customers’ minds and create product bundles you know they’ll buy?
Then be sure to collect data on their buying patterns!
To create effective bundles, you’ll want to collect customer data around:
Once you know all this, you can create bundles tailored specifically for your existing customers to grow your repeat business, as well as grow your average order size for new and existing business.
And don’t stop collecting that data!
Continue to track the success and failures of your product bundles and adjust them accordingly.
But how do you effectively track your sales and customer data?
With inventory management software that centralizes all your stock management and tracking under one hub, seamlessly integrates with multiple ecommerce platforms (including the ones we listed above), and gives you up-to-the-minute reports about your customers’ buying habits.
Experience the stress-free automation and integration that cloud-based inventory management software can provide your ecommerce business.
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