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Guide to Product Bundle Pricing

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Last editedOct 20212 min read

Selecting the right pricing strategy is a crucial component of generating revenue. If your business sells complementary products or services, you might want to consider a product bundle pricing strategy. When executed effectively, you’ll be able to sell more products and forge a deeper connection with your customer base. Here’s a closer look at the product bundle pricing definition along with its advantages and disadvantages.

Product bundle pricing definition

Product bundle pricing refers to the strategy of combining several services or products into a single package deal. The bundled price will be lower than the individual prices of each product or service, giving customers an incentive to buy more. Although you’re selling your individual pieces at a discount, by bundling them together you can generate a higher average revenue per user.

There are numerous benefits to creating package deals through bundling. It’s a great way to build customer loyalty by offering better value. Businesses can also offload slower-selling products by bundling them together with faster-selling products.

Product bundle pricing example

If you look at most ecommerce or retail businesses, you’ll see multiple examples of product bundle pricing. Amazon provides numerous product bundle pricing examples, grouping together related products with a reduced overall price.

Common examples include:

A mobile phone provider selling a smartphone together with a data plan
A pizzeria selling a large pizza, large soda, and breadsticks as a meal deal
A software provider including related word processing and accounting programs together in a suite
A homewares store selling a dining table with matching chairs

In all the cases mentioned above, the products complement one another. It’s likely that a customer would purchase all the bundled products anyway, but by including them together in a package deal this offers additional enticement.

Types of price bundling

There are two primary types of product bundle pricing:

Pure bundling: The customer must purchase the bundle as advertised. It’s a take-it-or-leave-it proposition, and without purchasing the full bundle they won’t have access to the individual products.
Mixed bundling: The customer has more flexibility. They can choose to purchase each product together or individually, though the individual prices are higher.

Product bundle pricing advantages and disadvantages

There are benefits and drawbacks to any pricing strategy, and product bundling is no exception. Here are a few product bundle pricing advantages and disadvantages to consider.

Advantages:

A streamlined buying experience for the customer
Increase in average order values
Increase in overall sales and profit margins
Increase in perceived value to the customer
Ability to shift underperforming inventory by pairing it with hot sellers

Disadvantages:

Some customers prefer to purchase individual items separately
Customers may not need every product in the bundle
As a result, these customers will seek individual products elsewhere

Is a product bundle pricing strategy right for you?

There are clear pros and cons to a product bundle pricing strategy, so is it right for your business? This type of strategy works best for companies that sell complementary products or services. For example, if you sell a product that needs certain integrations, you might as well sell those integrations together as a package deal.

This plan might also work for you if your business needs to attract a wider customer base or boost engagement. You’ll increase perceived value and brand loyalty with a discount on your products via a product bundle.

On the other hand, if you focus solely on standalone products, you might find that this type of pricing strategy doesn’t make sense for you. It’s best to look at the situation from all angles to develop the right price and plan.

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