In today’s online retail market, two of the most important numbers to know are your profit per item and your sales volume. Your average transaction amount tracks the total amount your transactions, and inside those numbers, your profit per item is the amount of money you make per sale of each item. Volume is the number of sales you make in a given length of time. By bundling a few related products together and selling them a little cheaper than each would be on its own, you can turn a slight sacrifice of your profit per item into a massive increase in your sales volume.
This practice is common in many industries. Microsoft Windows, for example, includes an optional Office package, which bundles word processing, image, email and spreadsheet apps together in a single offering. Fast food meal deals are another example of this; individually, your chicken pieces, cole slaw and mashed potatoes may cost $7, but if they’re ordered as part of a meal they may be $1 cheaper and come with a small drink. By putting items together in ways the public would naturally use them and slightly reducing your profit margin on each, you can use one sale to drive another. A software buyer, for instance, may only really need word processing and email applications, but the Windows bundle makes it affordable to add Paint, Excel and Access for extra functionality, just as the purchase of chicken and a drink encourages the additional purchase of the included side dishes.
While this approach can drive significant lateral sales for your business, you must be careful to preserve customer choice. Research into customer behaviour has shown that almost the only way to lose with bundling your products is if you withdraw the a la carte option and only sell the packages. Customers like having a choice, so it’s important to offer your bundle as an alternative, rather than force it.