What is Product Bundling?

by Greg DePersio

1 min read

Product bundling is a strategy you can use to encourage customers to buy more goods – offering to sell multiple items together for one price. A product bundle is good for your customers because they pay less for each item than what it would cost if they bought each item individually. Product bundles make the most sense for related items. For example, when you sell a video game console, it can be bundled with controllers, a memory card, or video games. By offering a product bundle, your overall revenue will increase. This is also an effective way to increase your short-term cash flow. Product bundling may expose your customers to items they never knew about. Plus, the entire customer experience can be enhanced through bundling. For example, by pairing custom software with a product, your customers may find your product more useful. However, this pricing strategy can in lower profit margins; you earn less money for each item within the bundle. For example, instead of selling three items for $30 each, your bundle would be priced at $75, or only $25 per item. Product bundling may lead to waste if your customers don’t plan on using some of the items in the bundle. Plus, your customers may avoid purchasing a bundle based on the items making up the group. Therefore, you should carefully consider what to include in a product bundle and assess your willingness to be flexible when grouping products for package deals.

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