What if we told you that there is a straightforward and cheap way to lower your shipping costs and increase AOV (Average Order Value)? Without a doubt, you would be interested, wouldn’t you? And this is precisely what product bundling is all about. What are the benefits of this strategy (for you and your customers alike)? What can you do to implement this strategy in your store? And finally, what’s the difference between product bundling, upselling, and cross-selling? It’s time to find out.
We can say with nearly 100% certainty that you’ve purchased a product bundle in the past. Every time you buy a razor with razor blades or shampoo with conditioner–these are product bundles. Typically, the main idea behind product bundles is based on creating an inseparable set of products with a small discount. You pay less for such a set than you’d have to pay if you purchased these products separately.
The product bundling strategy, until recently, has been a domain of brick-and-mortar stores. In fact, It’s surprising that the vast majority of eCommerce companies don’t utilize this strategy, especially given how many benefits it entails. Therefore, this is an excellent opportunity for your store to stand out from your competition and attract more customers.
The benefits of product bundling
For you, as an eCommerce entrepreneur, product bundles are a fantastic way to:
- Increase AOV: You sell more per order. Therefore your Average Order Value goes up.
- Decrease logistics costs: The higher cart value can encourage customers to buy more in order to reach the minimum order value for free shipping. Also, keep in mind that with product bundling, you need just one pick to fulfill the order.
- Sell less popular products: You can easily create bundles that combine your bestsellers and less popular products. This strategy helps you avoid the dead stock problem and ensure constant stock flow. This is what every eCommerce entrepreneur wants. Storing old and unsellable products is a severe problem for many companies, causing them to lose money every month. Product bundles are a fantastic and straightforward way to deal with this problem.
For your customers, product bundles are also attractive. Here’s why:
- Discounts: It’s a possibility to buy two or three products at a discounted price.
- One shipment: Your customers don’t have to pay for shipping twice because the entire order is sent in one package.
- Gifts: Product bundles are just perfect when it comes to buying gifts. Bundles are usually nicely packed and shipped in the same parcel. That’s why product bundles are frequently used for special occasions, like Christmas or weddings.
Three types of product bundles
Generally speaking, there are three main types of product bundles that eCommerce companies utilize. Naturally, you can come up with your own idea. The only factor that matters is the interest of your customers
Mixed Bundling
This option comprises different products that are, however, frequently purchased by your customers. You have to analyze your orders history thoroughly. Do you see any patterns? For instance, if your customers often buy dumbbells with an exercise mat, you can create such a bundle. Also, remember that product bundles are more prevalent in specific sectors and less in others. Do your research and decide what products are appropriate for bundling.
One of our Clients utilizes this strategy. KlaudynaHebda.pl is an online store where you can purchase aromatherapy products. Klaudyna decided to sell three of her products in one bundle called “A set for the common cold for children”, and it comprises three products:
- An essential oil
- Lotion
- Bath salt
In the same product tab, Klaudyna shows how much these products cost separately. Also, the bundle is marked “promotion”, which encourages customers to choose this option. This set is valued at 169 PLN. The products that make up this bundle individually cost 187 PLN, so customers save 18 PLN. And that’s the point: To offer a small, yet noticeable discount.
Pure Bundling
This approach comprises products that can ONLY be purchased in a bundle. The most straightforward example–car mats. You have to buy a bundle comprising four mats. In most instances, you can’t buy just one car mat.
The same product bundling
As its name indicates, such a bundle comprises the same products. For instance, every six-pack is an example of the same product bundling. Similarly, people buy other products in bundles like toilet paper, paper towels, beverages, or candy.
How to implement the product bundling strategy?
In fact, it’s relatively straightforward. You can simply add new products to your inventory that comprise two or more products and start selling them. You can also create a new section in your store (“special offers”, “sets”, “promotions”, etc.) and place your bundles there. It is crucial to show your customers the real value that comes from purchasing a bundle. Show them how much money they can save. For instance, many companies offer products that make up a bundle in the same product tab and present their individual prices. As a result, customers can make a more informed decision. If the saving is clearly visible, they will indeed feel encouraged to buy a set of products.
It would help if you also promoted product bundles in your newsletters and social media profiles, especially around the holiday seasons, when people are looking for gifts. It’s a perfect time to sell nicely-packed, elegant sets.
Logistics
And there’s the logistics issue. There are two critical factors you have to take into consideration:
- Remember that in product bundles many items are sold as a single unit. Therefore, you have to constantly monitor your inventory. If one product is out of stock, then the bundle can no longer be sold.
- Making a product bundle groups various items under one main SKU. Keep in mind that the bundle SKU (Stock-Keeping Unit) is not a real, separate product. It’s just a representation that includes at least two or more items.
If you cooperate with a logistics partner like Omnipack, let them know about your plans regarding product bundles. Your operator will surely provide you with relevant data on what’s necessary to implement such a strategy seamlessly. This is what we do at Omnipack. We guide our clients through the entire process. As a result, their product bundling strategy can work flawlessly, without any delays or glitches.
What’s the difference between product bundling, upselling, and cross-selling?
Indeed, these three techniques are quite similar, and each one of them is designed to sell more (or more expensive) products, but there are some differences you have to be aware of.
Upselling
Basically, it’s all about offering a more expensive or higher model of the same product. If you walk into a store with the intent to buy a Lenovo laptop and end up buying a MacBook, it’s upselling.
Cross-selling
It’s a strategy where you suggest your customer also buy other complementary products. But these products are still separate items in your store that can be bought within the same cart or not. With product bundling, your customers don’t have such a choice. We could say that product bundling is just cross-selling as a default setting.
If you are interested in implementing the product bundling strategy in your store, drop us a line! We will gladly help you with the entire process and handle all the logistics issues to help you implement this solution as quickly as possible.
