Product bundling consists of combining several products in a single purchase order with the main objective of increasing the average customer’s ticket and/or to sell out slow-moving or clearance items.
What is the advantage for the customer?
To obtain this batch of products at a very attractive price.
This practice of offering a group of products at a lower price than they would be separately is a very effective sales strategy if used correctly.
Do you want to know more about product bundling and how you can apply it in your online business to increase your sales?
In this blog post, we explain what product bundling is and what benefits it offers companies.
What is product bundling?
Product bundling, as we have already mentioned, is a marketing strategy based on the sale of packages of products that are related to each other. The aim is to increase the customer’s spending per purchase but, as you will see below, the benefits for e-commerce go much further.
Product bundling is a very common online marketing practice in e-commerce. It is also used in combination with up-selling and cross-selling strategies, in order to cross-sell or tempt the customer with another similar product of higher quality (and price).
Bundle products are becoming more and more common. Not only in the food or cosmetics sector, traditionally associated with this type of offer, but also in the joint sale of books, courses, guides, etc.
This practice usually results in an increase in sales, where the customer ends up buying more products than they had planned, thanks to the tempting price of the pack. In addition, it helps them to discover other complementary products that they may need or that may be of interest.
As we have already mentioned, the purpose of this sales technique is to increase the average purchase ticket. To this end, offers can be made for several different products as well as for identical products.
Nowadays we can find a wide variety of packs on the market. Here are a few examples so that you can see some of the approaches that can be given to them:
- Testing several products of a brand. This makes it easier for the brand to make its product known. The customer can discover an article that they might not have planned to buy and that in the end gets them hooked.
(Example Pack several products of the same brand)
- To make the customer’s job easier. Compilation of all those products that we know they may need. The option of buying them individually would require more time and would be more expensive.
(Example compilation pack)
- Helping the undecided: Your customer doesn’t know which brand to choose? Prepare a selection of different brands so that they can try them all and find out which one they like best.
(Example multi-brand pack)
- Increased stock turnover. It works very well to increase the number of sales of products that have a low turnover. Offering them in a pack usually facilitates their acquisition. Also for products on clearance that you want to eliminate quickly from your stock.
(Example: cologne + cream + etc.)
In any case, the hook is always to offer significant discounts on bundled items.
What is the benefit of product bundling for e-commerce?
The benefits of applying product grouping techniques are many.
If you have an e-commerce and you still don’t know the advantages of this sales strategy, here we summarise some of the most important ones:
Increase your sales
This is the main advantage. Perhaps the customer only wanted a specific product, but when they see the offer they have in the pack, they may not be able to resist. The customer saves money and you get to sell more products, although the profit margin is lower. That is why it is important to have a good control over the costs and to always be sure that the operation is profitable.
Get rid of certain products
Either because you have detected that they have a low turnover, because you have an excess of products or because you are interested in getting rid of them due to changing trends. Whatever the reason, sell them in groups with other interesting items and you will see how quickly they disappear from your stock.
Promote new products or brands
Customers are sometimes reluctant to buy items that don’t yet have reviews. Or they are simply unaware of their quality or usefulness. Put them in a pack with other products in high demand to make them known and encourage them to try them.
More sales in less time
There are products that are most often bought together, especially at certain times of the year, such as “back to school”. Make sure your customer doesn’t leave out anything they will need. Create the perfect pack that you know he needs so that he can buy everything at once. He saves time and money and you make sure that the whole operation is carried out in your online shop.
Get the most out of shipping costs
If you have the “free shipping” option, use product bundling to carry more items in each transaction.
Create unique bundles and differentiate yourself from your competition.
If you are the only one selling that combination of products, it’s a good one and it’s very good value for money… you’re almost guaranteed to sell!
Make it difficult for your prices to be compared
In line with the previous point, in an online market with such an aggressive price fight as the current one, grouped sales prevent or make it difficult to compare different e-commerce. And they won’t buy from you just because of the price, but because of the quality or usefulness of the pack you have created.
What are the types of product bundling?
Using this type of sales strategy is often successful among customers who appreciate discounts and the convenience of buying everything they need in “one click”.
In general, there are two types of product bundling:
- Pure bundling: the items in the bundle product are sold exclusively in a pack. The customer cannot purchase the product individually.
- Mixed bundling: the items in the bundle product can also be purchased separately. However, if the customer chooses to buy them together, he can save a good percentage of the price.
Keys to using product bundling as a sales strategy
As you have already seen, product bundling has many advantages for online shops. But its success is linked to following a proper sales strategy. For this, it is vital to carry out a thorough market research.
The choice of the products to be bundled cannot be made at random. Similarly, pricing requires a thorough knowledge of the costs, profit margins and prices of your competitors.
Using a price monitoring programme such as Boardfy can be a great help.
In any case, don’t panic!
From Boardfy we want to guide you through this process, pointing out the most important aspects to look out for:
Always focus on your customer
Nobody can know your customers better than you. Think about what they need and want. And, of course, create different packs depending on each type of customer.
Spy on your competitionç
Monitor the prices of all the products you have in common. This way you will always know what prices are competitive for each of them individually and, therefore, if the price you have set for the grouped purchase option is advantageous.
Identify your costs and set your minimum profit margin.
If you sell below your cost price, the increase in sales will actually turn into an increase in losses.
How can you avoid this?
Calculate the real cost of each product and set the minimum profit margin you need. This is the only way to find out if selling the products in a pack is profitable for you. You may even be able to offer some products for “free” if the margin you have on the other products allows you to do so.
Honesty first and foremost
Don’t try to cheat your customers, sooner or later they will realise it and you will lose them forever.
Create packages that are economically profitable for you and for them. And always provide them with value.
Think of products that can be useful to them or that have the quality they want. If the products in the pack do not meet these requirements, they will distrust you in future purchases and will probably not repeat.
Be smart when choosing products
Remember that product bundling is a good way of removing surplus products. Identify which products are standing still or those that, due to changes in trends or models, you are interested in liquidating.
They are undoubtedly good candidates for integration into a product bundle along with other more powerful items that sell almost on their own.
Of course, as long as they meet all the requirements mentioned in the previous points.
Full visibility!
Now that you have the most powerful product bundle on the market, you must give it a leading role in your e-commerce. Promote it and take the opportunity to suggest it whenever your customers are looking for a product that is in the bundle or has something to do with them.
How does boardfy help you define your product bundling strategy?
Yes, defining a good product bundling strategy is not easy, but if you succeed… the results will be spectacular.
If you think you need help, Boardfy can help you in the most delicate aspects of defining the strategy:
- Monitor and control your competitors’ prices. It will help you to fix the price of your product pack because we monitor the price of each of the products in the pack separately and, in addition, it will allow you to verify that its price is still competitive.
- Stay ahead of their moves. Study their price history to find out if they follow a pattern in their price changes. This way you can anticipate them and adjust your prices to stay ahead of your competition.
- Identify in which products you are competitive and with what margin. If you have the best price on some products with an interesting profit margin, you will be able to put together a really powerful and attractive pack.
- Calculate your costs and know your margin in real time. Boardfy calculates the real cost of each product and shows you your current margin for each product and the margin you would have if you matched the price of the cheapest competitor.
- Discover new products to add to your ecommerce (and your bundle product). Our price monitoring software also identifies those products that your competitors sell and you don’t. Check them out to see if they might be interesting to add to your catalogue.
Boardfy is much more than a price monitoring tool
Boardfy is the fastest dynamic pricing and monitoring platform worldwide.
If you have never used a tool like this before, here is a brief summary of what Boardfy can do for you:
- Monitor your competitors’ prices.
- Create an effective pricing strategy.
- Automate price increases and decreases according to your strategy.
- Optimise your Google Shopping campaigns: invest only in your most competitive products in real time.
- Discover in which articles you have no competition: increase your margins in those products in which you have no rival.
And all this from a single tool and in a totally automated way.
Interested?
And you, are you going to do product bundling in your e-commerce?
Product bundling is a very effective way to increase your sales and provide significant savings to your customers.
Put together a good bundle of products, at a price that is advantageous to them and that meets their expectations… and you will be very close to gaining their trust.
If they feel they have made a good purchase by buying a bundle of products, they will be much more receptive when it comes to evaluating your other bundles.
This is why product bundling is an interesting way to build customer loyalty. Moreover, it will be very difficult for them to make a price comparison with your competitors.
Remember that it can be a good way for you to achieve a higher stock turnover and product liquidation.
Shall we start?
