Product bundling is an age-old strategy retailers use to increase order volume and make more sales. Seeing a huge demand for burgers, French fries, and soda, it made sense to McDonald’s to group all three items together into the Happy Meal, rather than only selling each item separately. Bundling offers more value to customers while increasing the number of sales of each item.
Not all retailers, 3PLs, or fulfillment centers truly understand how bundling works or why it transforms how warehouses operate. We will break it down in this post.
What Is Product Bundling?
Product bundling is a retail practice in which multiple products are sold together as a bundle, typically at a lower price than if sold individually. It serves as an incentive for customers to purchase more items than they normally would at once, while the business generates additional sales. .
Product bundling fits into many retail and e-commerce strategies, as businesses can upsell and cross-sell while offering more value to customers. Some popular examples include Buy-One-Get-One-free promotions, skincare sets, beach kits, hair care kits, and value meals at restaurants.
Take a customer who adds a shampoo to their online cart. You can upsell by offering a product bundle that contains the shampoo, a conditioner, and hair oil for a lower price than what the customer would have spent buying each product individually. This motivates the customer to purchase all three products rather than just one.
Types Of Product Bundling
There are various types of product bundling techniques, and the one you choose largely depends on what your customers respond to at any given time. Let’s explore them below.
Mix-and-match Bundling
Mix-and-match bundling is about giving customers the power to choose from a selection of complementary items to create their custom bundle. Think of a clothing store offering a deal like “choose any shirt and any pair of trousers for $50.” This approach makes shoppers feel more in control and motivated toward a brand that allows them to tailor their own experience.
Implications for warehouses: Clearly define the available options and their packaging details so order fulfillment remains highly accurate.
Pure Bundling
Pure bundling is stricter than mix-and-match bundling because in this case, the items are only sold as a bundle, with no option to buy each product separately. Use this when products naturally complement each other. A good example is HelloFresh, which sends you everything you need for specific meals. You can’t just order one carrot or a handful of spices; you get the full meal kit, ready to go.
Implications for warehouses: On the order fulfillment side, pure bundling is efficient because you can pre-package the sets, making warehouse operations faster and tidier.
New Product Bundling
In new product bundling you introduce customers to your latest releases by bundling it with a popular, heavily-exposed product. Nintendo did this brilliantly by bundling new games, such as The Legend of Zelda: Breath of the Wild and Mario Kart, with their Nintendo Switch consoles, and they also included an exclusive Zelda-themed carrying case to make the package more appealing.
Implications for warehouses: Highlight the new product’s value in your promotional inserts and packing slips so customers immediately see what’s special about it.
Cross-Sell Bundling
Cross-sell bundling is about offering helpful add-ons that enhance the main purchase. For example, people buying a new iPhone will likely want a protective case, as well as a charger or earbuds, to make the whole order more convenient for the buyer and increase order value.
Implications for warehouses: Set up automated prompts at checkout to suggest these add-ons and ensure your packing team knows to bundle them correctly.
Same-Product Bundling
When you want customers to stock up, same-product bundling offers multiple units of the same item at a discounted price and is effective for everyday essentials. Think toothpaste multipacks or bulk deals on paper towels.
Implications for warehouses: Pre-assemble common quantities (3-packs, 6-packs) during slower periods to accelerate fulfillment. For high-volume orders, consider using automated systems or batch picking methods where staff collect large quantities of the same product at once.
Gift Bundles
Gift bundles are popular around holidays or special events, such as Valentine’s Day. Makeup, skincare, and fashion brands offer beautifully curated gift sets that combine complementary products into one elegant package.
Implications for warehouses: A potential value-add for 3PLs is to offer gift-wrapping options and adding a note to elevate the unboxing experience.
Inventory Clearance Bundling
For brands with stock gathering dust, inventory clearance pairs slower-moving items with bestsellers to clear space without heavy discounting. For instance, a tea retailer might bundle slower-selling specialty teas with their popular teapots, creating a value-packed offer that customers can’t resist.
Implications for warehouses: Getting old inventory out the door to give consumers a deal has added benefits for brands: lowering storage fees and cutting down on warehouse space needs.
Buy-One-Get-One (BOGO) Bundles
BOGO bundles are classic for a reason. Customers love getting something extra, and it’s a great way to boost cart size. This strategy is most effective for products that are typically purchased only once or twice: there is little chance consumers would want another hair dryer, for example, so offering a complimentary styling brush can tip the scales in favor of making the purchase.
Implications for warehouses: Create dedicated BOGO staging areas where primary and bonus items are stored together. Program your WMS to automatically flag BOGO orders for special handling. Consider packaging solutions that protect the free item while clearly marking it as a bonus to prevent misunderstandings.
Benefits of Product Bundling For Warehouses And 3PLs
Ultimately, product bundling is about selling more and working smarter for higher margins across the entire fulfillment chain. But processes in the warehouse can especially benefit.
Optimized order fulfillment. When executed correctly, product bundling can actually streamline picking, packing, and shipping processes. For example, instead of pulling five different SKUs for one customer, warehouse teams can pick one pre-assembled bundle, reducing fulfillment time and errors.
Optimized storage space. When products are grouped into kits or sets ahead of time, it’s easier to organize inventory and maintain a cleaner, more structured warehouse layout. 3PLs can also offer bundling as a value-added service to brands, giving them a competitive edge over those who only handle standard fulfillment.
Higher order values and lower inventory costs. Product bundling can fuel order values and inventory turnover in a win-win for warehouses and brands. Warehouses can move more stock, and brands enjoy improved sales performance. The strategy is particularly rewarding during busy seasons, such as the holidays or major shopping events, as pre-bundled products enable 3PLs to handle higher volumes without slowing down operations.
Best Practices For Managing Bundles In A Warehouse Setting
Managing your product bundles properly ensures smooth warehouse and fulfillment processes. Let’s explore some best practices below.
Organize Usually-Bundled Products Together
Warehouse management for product bundles is about organizing and grouping items that are frequently bundled so warehouse staff can easily retrieve all components of a bundle at once. This reduces picking errors and improves efficiency during order fulfillment.
Pre-Pack Bundles When Possible
By assembling bundles in advance, you can ensure accurate packing, prevent product misplacement, and expedite the shipping and fulfillment process. This practice is especially useful for “pure bundling,” where customers can only purchase items as a bundle, like a subscription box.
Clearly Label And Track Bundle SKUs
To avoid confusion and mistakes, assign a unique SKU to each bundled set to track through your inventory management system. If bundles are sold as a package but contain different items, doing this will also enable more precise stock management. By having a separate SKU for each bundle, warehouse staff can quickly identify any discrepancies and track stock levels for both individual items and bundles.
Use Automated Systems for Bundle Suggestions and Packaging
Automation tools and warehouse management systems (WMS), such as Da Vinci, facilitate smooth product bundling by offering real-time data on bundle stock levels and providing suggestions for pairing products based on inventory data. These systems ensure that the correct items are being packed in the right combinations.
Offer Seasonal Or Promotional Bundles
Offering seasonal or promotional bundles requires extra stock and pre-packaging specific bundles for holidays and sales events. By planning and forecasting demand for these types of bundles, you can ensure that your warehouse has enough inventory to fulfill orders during peak times.
Implement Quality Control for Bundles
Quality control ensures that every bundle is in good condition before shipped. Establish inspection protocols to check the contents of bundles and confirm that items are not damaged or defective.
How Da Vinci Supports Product Bundling
Retailers, 3PLs, and fulfillment teams who practice product bundling can benefit from Da Vinci WMS because it:
- Simplifies product bundling for warehouses by allowing workers to create both virtual and pre-kitted bundles at the SKU level. This flexibility ensures that bundles are configured to meet specific business needs.
- Supports real-time inventory updates for both individual items and their corresponding bundles. This ensures accurate stock tracking at all times.
- Streamlines picking workflows for bundled orders, reducing the time and errors typically associated with manual processes.
Da Vinci also helps warehouses and 3PLs manage custom client bundling rules and promotional kits efficiently, ensuring that all orders align with client requirements and promotional guidelines.
Product Bundling FAQs
What’s the difference between a bundle and a kit?
A bundle groups multiple products together as a single offer, often at a discounted price. A kit typically includes components that are packaged together to create a complete, functional product.
Do bundles need to be pre-assembled?
No, bundles don’t always have to be pre-assembled. You can offer virtual bundles where items are grouped together, but still picked and packed separately.
Can I track inventory for individual items within a bundle?
Yes, most systems, including Da Vinci, allow you to track inventory for both individual items and bundled products separately.
Is product bundling only for e-commerce businesses?
No, product bundling is used in both e-commerce and physical retail environments to increase sales and offer value to customers.
Can product bundling help move slow-moving inventory?
Yes, bundling slow-moving items with popular products can help clear inventory by making them more attractive to customers and encouraging sales.
Boost Profitability and Streamline Fulfillment with Smart Bundling
By offering tailored bundles, you can increase average order value, clear slow-moving inventory, and provide more value to customers. But managing bundles requires robust support from your Warehouse Management System (WMS) to ensure smooth fulfillment. Choose a Cloud-based, easily-configured WMS like Da Vinci to help create pre-kitted bundles, track real-time inventory, optimize picking workflows, reduce errors, and improve overall profitability.
Request a demo to learn how Da Vinci can help you manage bundles effortlessly and boost your bottom line.