Sumtracker

How Do Bundles and Kits Boost Your Sales?

how does bundling increase profits

Ankit

May 21, 2022 · 10 Min read

A whole process in the backend needs to go right for an eCommerce store to generate bundles and kits. It is crucial to get an inventory management system to handle the calculations and syncing. 

Remember the time you ordered a ‘reel and camera’ combo while ordering your Instax camera on Amazon – a classic example of bundles and kits, found in abundance on eCommerce giants like Amazon, and eBay.  

Product bundling is one of the most effective ways to boost your sales, even with idle stock – it is the technique of combining two or more items in a bundle, sold as a combo. In e-commerce businesses, bundles and kits are a proven way to help connect your products to generate more sales.

But exactly why do sellers bundle their products? Which types of bundles and kits should you be using? These answers and more, as you scroll through the article. 

What is bundling? 

Bundling or product bundling involves grouping together several items and selling them as a single unit at a lower or discounted price. This strategy can be in handy when encouraging customers to buy more products. 

For instance, sellers bundle multiple related items to form a kit, skincare, or grooming kit and delight customers with a wholesome discount. Product bundling is often seen in B2C markets and less commonly in B-2-B trade.

Another relatable example is the McDonald’s combo box. Combo boxes like Happy Meal condense multiple items together – a burger, fries, soda, or juice. For the consumer, the cost to food ratio of a meal box seems more favorable since they’re getting more out of a combo for a discounted price. So they often end up purchasing a combo, which can significantly boost sales for the company. 

Why do sellers use bundles for their products? 

Bundles and kits are usually sold at a lower price than the combined cost of buying the items individually. Call human psychology a work of art if you will; these bundles and kits sell so well among customers that the revenue typically offsets the profit margin on most individual products. 

The right bundled pricing enables you to reach a broader subset of the audience – from those looking to score great deals to those looking for reviews on pairing two items to those who want the convenience of ordering similar products together.

There are several ways to sell to your audience using bundles, such as:

  • Sell bundles and kits at a discounted price: Even at a discounted price, selling multiple items in a bundle can help you grow your profits.  
  • Club slow-moving products with related popular ones: Bundles and kits can be exceptionally helpful in ridding you of slow-moving inventory items if you pair them with items that people frequently buy and trust. However, you must pair items carefully in order to boost your chances of a sale. Thus, it is crucial to have inventory management software that enables you to experiment with bundles and kits to identify what sells. 

Sumtracker makes that possible (and extremely easy) for you. Try your hand at different bundle and kit combinations, perform A/B testing on product photos, descriptions and keywords to find out what works best for your sales – leave the inventory sync and calculations to us. 

The ideal example to illustrate the use of bundles would be the combo deals on some of your favorite online eCommerce stores. For instance, bundling a shampoo and a conditioner at a slightly discounted price is convenient for customers and profitable to companies, as they get a chance to sell more of each item. 

While there’s no infallible trick to get bundling and kitting right, you can always experiment and infer your results or use historical data to base your projections. You can start by identifying your purpose behind bundling:

  • Is it to introduce/market a new product that you rolled out recently? 
  • Is it to purge your inventory of slow-moving items? 

Once you have the answer, you’ll be able to devise your bundling technique more precisely. 

The technique of bundling and kitting can be instrumental to your business strategy – it can help you sell more items in one customer encounter and open new avenues for your products and marketing channels.

Understanding the different types of product bundles and kits

Bundling allows you to combine different products and features, adding more value to your listings. But to figure out the best bundling technique for your products, it is imperative to understand the types of bundles amongst which you can choose: 

  • Pure bundles: A pure bundle is when you cannot buy the standalone products of a bundle individually – meaning you can purchase those products as a bundle, not otherwise. Herein, there is no scope for a consumer to customize their purchase. An excellent example of pure bundling is the Microsoft Office 365 package, wherein you have to pay for the entire package, even if all you want to use is MS Excel. Thus, in the case of pure bundling, cherry-picking a deal is not an option.  
  • Cross-sell bundles: Cross-sell bundles help you sell a product or service in conjunction with the main product. Usually, sellers club a low-cost item with a big-ticket item to create a more reasonable bundle. Here’s a good example: You want to buy an expensive laptop and, at the same time, ensure its safety with insurance. So, sellers would typically create a bundle consisting of the laptop being the big-ticket item, insurance, and perhaps a laptop backpack. So the things that a consumer would anyway buy are served in a bundle at a reasonably discounted price. However, the key difference is that the user may simply choose to buy just the laptop, unlike in the case of pure bundling. 
  • Mix & match bundles: Mix & match bundles enable sellers to combine related products in a bundle. However, in this case, customers have the flexibility to customize their bundles and choose which products they want to combine. Mix & match is more common in offline stores than online and works well, especially for sellers dealing in perishable or bulk FMCG products. Customers benefit from being in control of what they want to buy, and sellers ingeniously (yet sneakily) encourage customers to buy preferred items in bulk. For instance, retail stores often offer deals where you can match a variety of items to form a bundle at a fixed price – 2 shirts and a t-shirt for a fixed price of $60.
  • New product bundles: New product bundles are used to make new products discoverable to your audience. Herein, a new product is bundled with a pre-existing product, preferably with high consumer demand. Ecommerce sellers often use this technique so that new products quickly gain exposure. Example: A beauty brand offering skincare bundles that consist of a top-selling moisturizer with a newly launched face wash.
  • Buy-one-get-one bundles: One of the most sought-after retail techniques, buy-one-get-one bundles allow consumers to purchase a product and avail of a discount on another complimentary product. In the best-case scenario, the complementary product may even be free! The simplest example is an online store offering a ‘buy-two-get-one-free,’ where you get one t-shirt free on the purchase of two.
  • Inventory clearance bundles: This technique involves clubbing a fast-selling inventory item with a sluggish, slow-selling item in order to optimize your inventory space and reduce maintenance costs. The key is to sell these bundles at a discounted price to make shoppers feel like the deal is a bargain. The conversion in the case of this technique relies on the customer’s inclination towards the top-selling item and a good discount. Brands like Zara are famously known for inventory clearing offers. Another popular example is the tea brand T-WE. T-WE was selling more accessories than their tea – but the accessories were way less profitable. Therefore, they started bundling their teas with accessories to make the deals more appealing.
  • Gifting bundles: The purpose of gift bundles is to allow shoppers to deliver an assortment of complementary products as a gift. These bundles are most prevalent during the holiday season. Skincare brands such as Clinique often come up with holiday season bundles that contain moisturizers, facial cleansers, and serums. 

If you want to stand out from your competitors, it is crucial to be thorough with your understanding of bundles. Not only does bundling help you get rid of your weaker inventory items, but it will also enhance the perceived value of your products, leading to soaring sales numbers.

The more you try your hand at bundling, the better you get at it. Experiment with bundles and kits effortlessly with Sumtracker – test and analyze different product descriptions and images, auto-sync inventories with duplicate SKUs, and get sales reports to identify what sells best. Open up your business to exponential growth with Sumtracker. 

What logistics do I need to consider with bundles and kits? 

When working with bundles, consider adding an item your competitors do not provide, but your customers value.

Kitting and bundling can be time-consuming, but they’re not difficult to grasp. While bundles are highly lucrative, once sold, there is a myriad of logistical gaps that you’ll need to bridge: 

  • Different warehouse locations: For the products to be delivered from different fulfillment centers, you will need inventory management software that can accurately segregate these orders. If the orders are split correctly, the customer receives the items all at once. Plus, in order to tackle missing or damaged item situations properly, your inventory management platform must be capable of tracking individual SKUs for pre-assembled items, apart from the master SKU. 
  • Handling different SKUs: All bundles have a separate individual SKU, different from the master SKU for that bundle. Bundling enables sellers to generate and assign multiple individual SKUs without tampering with the original stock level in your inventory. In other words, bundling and kitting are ways for sellers to pan out multiple combinations of their products without influencing the inventory stock levels. 
  • Offering custom bundles: Customisation is the key to your customer’s hearts, and it is the easiest way to get their attention and convert a simple website visit into a sale. The more control a customer has over what they’re buying; the more are your chances of retaining that customer for good. An inventory management system like Sumtracker that allows you to manage customized bundles, staging, and bulk orders with automated functions can help you efficiently split between warehouses.

How do bundles and kits help in increasing sales? 

The one thing that people have in common is a love for discounts and freebies. Everybody is a deal-seeker, some may be more aggressive than others, but people always come back to a place that gives them more value for their money, which is commonly why Amazon bundles perform so well. Bundling is a great way to maintain the perception of a ‘value deal’ alive. While customers do end up saving money, there’s no denying that sellers make way more profit in comparison. 

Bundles and kits have a very high chance of going viral. Once they do, companies cash in on the soaring sale volumes and resulting profits. So what they lose in selling bundles and kits at significantly lower prices, they pretty much cover up in the consequent sales. 

Moreover, coupling lesser-known products with popular ones can help you free up considerable inventory space. This helps you steer clear of inventory management challenges such as deadstock or wasted warehouse space. 

Additionally, bundles and kits help you venture new products out so that you can slowly build a market for the product. Kitting a new product, a sample, per se, will give the new product some much-needed exposure without frantically increasing your marketing costs. After customers start to like the new product, they will keep coming back for more.

Try Sumtracker for Free

No credit cards or strings attached

Similar Articles