It is very easy to notice that customers prefer to buy product bundling, as they prefer to buy two or three different products once with the lower prices possible. Chances are, they only need one stuff from the bundling package. But, when they count the price of each product, then they decide to buy them in bundles.
This is the best chance for millions of e-commerce worldwide. They take advantage of this phenomenon. Those e-commerce websites usually choose less popular products and combine them with the most favorite ones, so that they can gain higher profit. Well-established retailers may use this method after they carefully calculate how much the profit that they get for selling product bundling.
Basic Understanding about The Product Bundling
The majority of customers prefer to buy bundled products, due to certain reasons. They have a certain perception of value, based on their awareness of the products. Loyal customers don’t mind buying bundled products from their favorite brands. They usually calculate the price of each product first when they are sold separately, before deciding to buy them in bundle.
Anyway, customers also demand certain criteria before they decide to buy bundled products. First, they consider each product’s function. When each product cannot support each other, then it is likely that customers won’t buy them. But still, some customers don’t consider functional value as their main consideration. They might only think that buying each product separately is more expensive, so they prefer to buy bundled products. Even, when they don’t need any of those!
However, retailers are lucky enough when they have loyal customers, who buy any product from a similar brand. While those customers never hesitate to buy all the latest products from the same brand through the years, they won’t hesitate to buy a bundled package from their favorite brand, either.
What to Learn Before Selling Product Bundling
People think the products you are selling are worthless. Indeed, it seems that people will pay more for the items separately than they will when they are bundled together. But, it is rather challenging for small or new retailers, in which they really need to calculate the profit that they can get from selling two or three products within a package.
Most of the time, retailers only wish to sell as many products as they can because they consider that they get higher cash flow. There is nothing wrong with this mindset. But, some buyers may consider contrarily. Bargain hunters love bundled products. But, budget-minded customers sometimes think in a different way. They think that the bundled products are less in value, so they prefer to buy things that they only need separately. Most of them think that one of the bundled products may be damaged or not functioning very well.
This is when customers avoid buying products from retailers, who often offer product bundling. These days, customers think that the price of the bundled products is increased in a certain amount of percentages, so retailers still can get profit. However, such a mindset only applies to customers who value the ‘product value’ instead of the product’s price.
Determining The Price of the Product Bundling
Well, retailers, here are some criteria for setting the price of your bundled product. First things first, you need to ensure that you have all the costs covered before setting up some products to be sold in bundling. This is particularly when your business is still brand new. You might argue that bigger companies do similar ways as you do. But, keep in mind that they already benefit, even from their lowest profit margins because they already have such a great volume for their selling products.
Newly built business owners need to ensure that they set up the right price for certain products with high demand. Yet, they still need to make the exact calculation upon the realistic revenue. In this case, retailers really need to set competitive prices, instead of very low price only because they need more buyers. It may be easy to attract customers in the beginning. But, when retailers get very low profit, then they can suffer from a great loss within several months or so.
The next important thing is to ‘stay close with the enemy’. In this case, retailers need to make a thorough survey of how competitors offer their product bundling. It is very easy for customers to make comparisons among two different suppliers of similar products. Sometimes, they don’t mind spending a little bit higher price in buying products from the more reputable retailers. This is, in fact, the real challenge for new kids on the block.
What beginners need is pricing software. Such software works very well in collecting the data of the price from competitors. Moreover, it offers certain standards in pricing, so that retailers can offer competitive prices among competitors.
Never Underestimate the Power of Software
Using software for determining the cost of product bundling is a strong necessity, even for newbies. Inventory Management System software is highly recommended, as it doesn’t only help retailers or buyers with bundling products, but also other important tasks, such as monitoring inventory, tracking the products’ availability, and many more. With the help of software, retailers can focus more on the products, which are less popular, so they can combine those products with the best selling ones.
In sum, the software can avoid retailers from facing a dead stock that turns out to be the worst nightmare. Besides, retailers can easily grab new customers, who might have never been interested in their products previously. With the right tactic, it is much easier for retailers to market their products while clearing the inventory before adding new products. Check out how you can add bundled products.
Among the most applicable product, bundling includes food and beverages, fashion products, house appliances, daily care essentials, and other products that women wear or use continually. Keep in mind that the majority of women prefer to buy bundled products, even when they don’t even need them.