Product Bundling is simply selling more than one item for one price. Selling a ‘set’ or a ‘lot’ or a ‘bundle.’ The possibilities are endless:
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1. A coffeemaker with filters and a bag of coffee
2. 2 bags of a special coffee instead of just one
3. A body wash, body lotion and shampoo in the same scent
4. A pair of interchangeable shoes with a couple different tops
5. A Corduroy stuffed teddy bear with the book, Corduroy.
6. A McDonald’s Happy Meal!
So why would you want to bundle your products? To increase your profits, of course.
On eBay each sale brings a cost of between five and fifty cents for insertion fees, and a variable rate Final Value Fee (FVF) percentage, as well as a FVF percentage on the cost of shipping.
The FVFs are a percentage of your sales, but the insertion fees are a straight cost, from five cents up to fifty cents. Your PayPal fees are also a percentage AND a flat fee. PayPal fees on most accounts are 2.9% and a flat rate of thirty cents per transaction. So even though part of your fees are a percentage of the sale and therefore the amount of the sale doesn’t affect the percentage, the flat rate can be as high as eighty cents per transaction. Eighty cents on an eight dollar transaction is a hefty percentage- a full ten percent of your sale. Eighty cents on an eighty dollar transaction, on the other hand, is only one percent. That is a big difference.
Shouldn’t your goal be to keep your fee percentage as low as possible? One way is to increase your selling prices. In my last article I wrote about selling low cost items on eBay. This example of fees as a high percentage of your sale is another reason to avoid that. So increasing your Average Selling Price (ASP) is one strategy to increase your profit on eCommerce sales. And product bundling is a great way to increase your ASP.
Bundles are most effective when they are related products that consumers typically buy together anyway. One bright Amazon seller came up with the idea of using Amazon to give ideas. When you purchase something on Amazon, right on the item page Amazon will tell you “other buyers who purchased this also bought . . . ” So you have an idea source for product bundling right there!
Bonus points for Amazon sellers also when bundling as it creates a unique product that is hard for competitors to copy and helps you maintain your price point and profit margin.
So if raising your ASP or eBay or avoiding the ‘race to the bottom’ pricing on Amazon appeals to you, perhaps product bundling should become a tool in your arsenal.
Thoughts and ideas welcome, please post so we can all continue to learn from one another!
