Maximize your revenue with bundling: A comprehensive guide

Simply put, bundling is a sales technique that involves selling multiple products as a package deal or single unit to increase the average order value (AOV). Usually, when complimentary products are bundled together, customers get the bundled products at a discounted price, compared to the cost of individual products listed in the package. Feels like a win! Additionally, individual products could also be bundled at checkout as a cross-selling and upselling strategy. 

Pure or mixed: there are two types of bundling 

Pure bundling is when items sold in a package cannot be bought separately, creating a unique customer buying opportunity. Whereas in mixed bundling, items can be purchased individually, but when packaged together, they are sold at a discounted price. 

While this sales technique may sound simple enough, the trick lies in figuring out the right mix of products to offer as bundles. In order to achieve this, you need to have knowledge of customer value perception. It means how much value a buyer puts in the goods being sold; the more value you offer, the more "worthy" the deal will seem.

There’s nothing better than learning through a seasoned expert, especially an ecommerce store owner like Jessie Gagatko, of JJ Design House. Specializing in framed art and gallery walls, Jessie conceived JJ Design House from her love for travel, nature, design, color, and home decor. She believes that every room in your home should be a reflection of your personality and style.

“I strive to create art that's not only visually stunning but also creates a mood that's fun, peaceful, or even quirky at times.” 

Creating beautiful art that paired well together not only made it easier for her customers to create a coordinated look and bring a room together, but it also saved them time, without the need to search for individual pieces that share a cohesive look or theme. 

“Bundling with Gelato has allowed my shop to easily transition my bestselling printable gallery wall to offering printed poster sets.”  

Offering printed wall art bundles in the second half of 2022 helped increase her sales by 45%, compared to the first half of the same year. Additionally, her average order volume during that same period increased by 16%.

“Gelato has allowed me to offer printed wall art to customers at an affordable price and with great quality.  I can confidently offer my products to customers worldwide with certainty of reliable delivery times and exceptional quality.”

Intstagram - @jjdesignhouse

Facebook - JJDesignHouse2019

1. Increase AOV and profits

Huge efforts and resources go into acquiring new customers and devising strategies to see an uptick in sales. However, it would be a massive bummer if a customer shops at your store, but that revenue is not large enough to make your business profitable enough. Bundled packages are a tried and tested way to increase average order value (AOV). Buyers tend to spend more money with every order when they realize that they are getting more bang for their buck.

Let’s have a look at an example to understand the impact of bundling on the seller’s profits:

With bundling, the store owner's profit margin has improved from 25% to 33%, thus increasing the average order value (AOV)

2. Decrease in marketing and distribution cost

Marketing three different items require resources and may warrant separate campaigns. Whereas when you put them together as a single unit, you only need to sell one product. For example, you will never see big food chains specifically focusing on drinks; instead, they always promote it as a bundle. Can you get them separately? Yes. Does it make more sense to get them with a combo? Yes. What ultimately happens is this encourages customers to get the combo set. It is the same thing for ecommerce businesses. 

3. Enhance buying experience

If done correctly, a bundle's convenience and value are huge bonuses for buyers. Customers will find it helpful to know which products work together well rather than scampering around the store and trying to put it together themselves with stiff competition and ever-decreasing attention span; the smoother the shopping experience, the better. 

4. Chance to use as a unique value proposition (UVP) against competitors 

When the market is this saturated with customers overflowing with choices, you need to offer a unique value proposition for the buyers to convert and make repetitive sales. This is where product bundling shines. When you pair a primary product with a complimentary accessory or addition and the price only slightly increases, it incentivizes customers to buy from your store. For example, you offer a t-shirt with a matching tote bag, a hoodie with a matching phone case, and so on.

For merchants that use Gelato production on-demand, bundling can be an effective way to increase profits and reduce waste by selling products together that complement each other. 

How do you set up bundling in your ecommerce store? Here are some steps to get started:

• Identify products that complement each other: Let's take wall-art products for example - to easily expand your wall-art selection check out our tutorial here. Effortlessly apply your design to multiple wall-art options, including size, shape, and frame. Take advantage of this opportunity to enhance your product offerings!

• Promote the bundle: Use various marketing channels to promote the bundle, such as email marketing, social media, and your website. Consider offering a limited-time promotion to encourage customers to take advantage of the bundle deal.

• Monitor sales: Keep track of how well the bundle performs and adjust the discount or the products included as needed. Also, consider rotating the products included in the bundle to keep the offer fresh and appealing.

If you're using Shopify or Etsy, you can easily set up bundle promotions in your store. Shopify has a " Discounts " feature that allows you to create custom promotions and apply them to specific products or collections. Etsy has a similar feature called "Coupons," where you can create and manage discounts for your store.

Bundling is a proven sales technique to increase your revenue and profits, especially for ecommerce stores that use production on demand. Start by identifying complementary products, setting up the bundle, promoting it, and monitoring its performance. Consider using analytics and performance tools to track customer habits and behaviors to offer better choices and create better combos.