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    1. Harry_shipper's Avatar
      Harry_shipper is offline

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      #1

      Is bundling a good sales strategy?

      Does anyone have any experience with bundling products? Does this work? Does it drive up profits? If so, how should I go about doing it?
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    2. Sams_Johnson is offline

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      #2
      Product bundling is a great way to increase your profits, but you have to make sure to do it right. There are times when it is a good idea to bundle your products and there are times when it is not worth it to bundle your products.

      But, first, let me go over what bundling is. Product bundling is when you combine several products or services together into one sale. This helps to create differentiation in the product you are offering. It also gives you and your customer greater value. Bundled packages are a better value than individual products.

      Often times, when a consumer is looking to buy one product, they are actually looking to buy several products. When they someone buys a bucket, they are often times looking for a mop as well. They might have only come in to your online store to buy one thing when they actually wanted two things. This can double your sales, reduce costs and deliver a better value to your customer. By bundling you can increase sales while reducing marketing or distribution costs. If you ship two products instead of one, then it is a lot cheaper to ship that product. It also encourages the customer to look to you as their single source for whatever it is you do, instead of looking around at a lot of different stores.

      So, bundling is a great sales strategy, but keep in mind that it is only worthwhile in certain situations. What should you consider when you are deciding whether or not to bundle. There are four factors that are generally considered when deciding to bundle:

      Volume – Bundling will almost always increase the volume of sales that you make. Generally this is great.
      Margins - Bundling will generally reduce your margins.
      Exposure – Bundling will often times help expose you to new customers or will expose your old customers to products that they didn’t previously buy from you. Before, they just bought buckets from you, but now they buy mops from you. More exposure.

      One thing you need to consider though is the risks in bundling. If you bundle the wrong products, particularly your more profitable products, you may cannibalize some of your sales.
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      #3
      Great list, but could you give me some strategies for bundling. After I have considered those factors you mentioned, are there any strategies I can use to make bundling successful?

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      #4
      Well I have already alluded to one strategy and that is called “Product Category” bundling. This is what my example of the bucket and the mop was. You can think of other great ways to do this. Amazon is great at doing this. On their products pages, they almost always suggest a bundle that customers might find useful and that is usually offered at a significant discount. If you want to get some ideas how to do this, you should check out Amazon. Maybe, check and see if some of the products that you are selling are also on Amazon. Then check to see how Amazon bundles your products. That could give you some ideas on how you could successfully bundle those products in your store.

      Another successful bundling strategy is called “typecasting.” Instead of focusing on products, when you do typecast bundling, you focus on the customer and what they need. If you know one of your customers is the person who purchases all the materials for a particular hospital, try to figure out what that customer and her hospital might need, and then create bundled packages based on those needs.

      Another thing to keep in mind when considering whether or not to bundle is to know your product backwards and forwards. Of course, this is true for any business, but if you want to bundle, you have to make sure that you know your customer’s needs thoroughly. You need to understand how your products address your customer’s needs. That is the only way you can, considering those factors that I mentioned earlier, know whether or not to bundle your product. If you do decide to bundle, your knowledge of your customer’s needs will let you know how to bundle your products.

    5. Alpope88 is offline

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      #5
      This is a fantastic list. Thanks a million!

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      Does bundling work? You don’t need to ask the question. Just go into your local McDonalds and look at what people are buying. They are buying Value meals, the classic example of bundling.

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