What Are Bundle Sales? (With Tips to Create Product Bundles)

By Indeed Editorial Team

Published 16 May 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Bundling products together is a popular strategy that can benefit both consumers and companies. Sales and marketing professionals can collaborate to determine the best products to bundle together, such as offering a second product at a discounted price. If you work in the sales, marketing or business field, it's beneficial to understand how this sales strategy works. In this article, we explain what bundle sales are and why they're important and share tips on creating product bundles.

What are bundle sales?

Bundle sales are an intentionally selected combination of a company's products or services that are marketed together. Mixed bundling refers to a strategy marketers may use to offer a package to their customers for a lower price than they would pay if they purchased each item or service separately. Bundled products are typically similar to one another, but companies may choose to offer dissimilar items to appeal to a specific market segment or reduce the inventory of less popular items.

Creating discounted bundled items is a strategy that companies employ to help stimulate product demand, encourage sales and increase revenues with minimal marketing expenses.

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Why are they important?

Bundle sales are important for several reasons because they can allow companies to:

Save on costs

Bundling products and services can help a company save money on marketing, distribution and storage. Because bundling strategies often focus on generating higher sales volumes from individual customers, successful sales can reduce a company's need for customer retention. Bundling can also help move inventory at a steady rate. An added benefit to bundling products is that it can help you sell services and items at the same speed. This can streamline inventory management and restocking efforts and save the company money.

Offload excess product

You can bolster sales of products that would otherwise be slow to sell by pairing them with relevant and more popular items. Another strategy for improving your inventory turnover rates is to package slow-moving items together. By marketing those products to customers who have purchased them previously, a company can increase the desirability of certain products and maximise inventory usage. Combining related products can reduce instances of dead stock and allow a business to re-examine purchasing strategies and reduce inventory holding costs.

Increase demand

Bundling products can help a company increase the demand and sales of bundled products. Retailers can use bundling to maximise the amount of consumer surplus they receive. Retailers determine consumer surplus by finding the difference between the price consumers are willing to pay for a product compared to the price they actually pay.

Optimising consumer surplus metrics can help customers feel like they're receiving a good deal and can facilitate increased sales. Bundling also encourages customers to spend larger amounts upfront instead of purchasing items over time or from alternative sellers. This can drive sales revenue because the average order value can be higher with bundles.

Provide convenient offerings to consumers

Bundled products can help simplify the shopping experience for consumers. By grouping products with customer needs in mind, consumers can select products that fulfil multiple demands at once. Allowing customers to add on, edit or remove products from a base bundle may also increase their satisfaction further and allow consumers to design personalised offerings for themselves. For example, a grocery store can bundle dried pasta with common ingredients in pasta sauces.

Eliminating the pressure of choosing multiple products can help customers find what they need without becoming overwhelmed. You can use product-consumer matching algorithms to better understand the products certain audience segments are interested in.

Introduce a new product

An additional benefit of bundled sales is that they allow customers to familiarise themselves with products they may not have otherwise tried. If they trust one item in the package, it can boost their confidence that the other items or service offerings can meet their needs. Companies can also use this to promote new product lines. For example, a skincare company can bundle a small bottle of a new face wash for a promotional price with purchases of its most common products to market it to regular customers.

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Tips for product bundling

When developing a bundling strategy for products, consider the following tips:

Bundle related items

Bundling related items can help encourage customers to buy the bundle. This is because they may have already planned to buy other items in a bundle or can easily rationalise why they may also want it. For example, if you create a product bundle of purple hair dye and shampoo to help maintain this colour, customers may see this bundle and realise they want the shampoo and the dye, especially if they can receive it at a discounted rate.

Even if the savings associated with the products aren't high, customers may be more willing to buy them anyway since the bundle makes their shopping experience more convenient. If customers often buy two products, they may also be willing to buy a bundle even if it has minimal savings potential.

Offer a variety of bundles

While it's helpful to bundle related products, you can also consider offering a variety of bundle deals to cater to more customers. This can help a company expand its audience and sell more bundles. For example, a department store may bundle a television with a suitcase, which may interest the target audience of both products. You can also offer bundles with options, such as a bundle of three different coffee flavours that the customer can pick.

Giving customers some options can reduce the amount of analysis and planning required to create more optimal bundles. Monitoring what customers often choose can also help you track the popularity of different products.

Include a free item

Including a free item in a promotion may motivate more customers to purchase them. Consider adding a low-value product to the budget at no extra cost. It's important to consider the manufacturing cost of a product to ensure the bundle can still be profitable. For example, a candy store can include a free chocolate bar with the purchase of a large snack bundle. This strategy can also help businesses sell unpopular items, as they can offer these products for free as a marketing expense to sell the bundles.

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Advertise the savings

It's important to inform a customer of the savings a bundle may offer. You can consider collaborating with the marketing team to ensure the cost efficiency of the package is the primary point within advertisements. For example, a retail store can add stickers with the exact savings difference between buying a bundle versus each individual product separately. This can ensure customers understand that a bundle may be beneficial to them and may motivate them to buy it. Advertising savings can also help customers rationalise a purchase they normally don't make.

Research products and consumer needs

Before you decide which products to involve in the sales promotion, it's essential to conduct thorough research of target audiences. It's also beneficial to consider each item's individual sales history. This research can help you learn valuable information, including what customers may want to see in a bundle. Understanding a target audience better can also help you discover their priorities and change the way you may advertise a bundle.

For example, you may offer bundled products to reduce packaging costs and advertise that the bundle uses less plastic, which can appeal to customers who value eco-friendly practices. Consider reviewing customer feedback to see if customers may have mentioned any products they may want to try or buy frequently.

Monitor individual costs first

Understanding the sales metrics of products before you bundle them can help you evaluate the effectiveness of a strategy. For example, if you plan to combine a company's best-selling and worst-selling products or services into a single package, consider monitoring their individual success in the market first. These measurements can provide insight into how bundles affect the sales of these products. You can try out different bundles to see which products benefit the most from this strategy.

Offer bundled products at checkout

Another benefit of bundled products is that they offer customers convenience. This can often motivate customers to make a purchase, even if they don't necessarily need an additional item. This strategy can be especially helpful for online storefronts, as it can save the customer time in searching for additional items and alert them of items they might not have realised they wanted.

Online retailers can consider creating a system that automatically offers different bundle offers depending on a customer's original purchase. For example, a system may offer computer accessory bundles to customers buying laptops and biscuits to customers buying tea.

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