What is Bundling?
In ecommerce fulfillment there are many advantages to bundling products together. The classic example is the McDonald’s happy meal—instead of selling burger, fries, and drinks separately, putting together a package deal has many advantages.
Bundling means putting two or more SKUs together into one package. Sometimes it means those items will, as a bundle, have a new unique SKU. Operationally it is quite to bundle units together; it requires a robust system to ensure it can be executed accurately.
In recent years, technology and automation have made bundling much easier to accomplish operationally. Virtual bundling is now possible for ecommerce brands to create bundles quickly, on the fly. It’s now a competitive advantage—especially for sellers looking to increase their average order value—to offer their customers specialized assortments of their products.
“Being able to bundle products virtually was the biggest lifesaver! Before we could create virtual bundles we had to pre-kit all of our variety pack box options. Between the transit time to get new products to the warehouse and then building the kits, we were struggling to keep up with orders. Creating bundles in eFactory gives our customers the freedom to create any variety option, while giving us much better visibility of our inventory!”
The Difference Between Bundling and Kitting
Often incorrectly used interchangeably, bundling and kitting are not always the same thing.
Bundling items together is a more generic term used when multiple SKUs (or ASINs when selling on Amazon) are included to be sent together within a single package. Bundling is often used for special projects for the holiday season, or a short-run promotional deal. For example, a retailer might incentivize their consumers to buy up to three of one item and get flat rate shipping.
Kitting is slightly more specific. Used in tandem with assembly, kitting happens when a group of products requires a sequential order of packing or preparation before shipment. Kitting is often done with products like subscription boxes, assembled products, or built-to-order items.
What do they have in common? Both product bundling and kitting take multiple individual SKUs and combine them to create one new SKU.
Strategies and Bundling Examples That Will Boost Sales
Ultimately bundling products should correlate to trends in consumer behavior. If you notice that items are often purchased together you might test out bundling those items.
Alternatively if you have products that go together but they aren’t often purchased together, try bundling them for a discount. See if more of your consumers buy both. It’s basic human psychology, most people want to feel like they’re getting a good deal, even if they’re actually buying more than they’d planned on in the first place. This is a tactic called cross-selling that has been shown to lead to more revenue and an increase in your average order value. If you can offer a few products together for a flat shipping rate, you might catch more sales volume than if you didn’t offer bundles.
Here are a few great times to create product bundles for your customers:
- Peak sales seasons: Any holiday is a great time to offer bundled products for your customers. For example, if the Q4 holiday season is when you sell the biggest volume of products you should think about offering custom bundles for just that time frame.DCL client Skydio, makers of a state-of-the-art drone, uses DCL for their postponement and assembly. It would be easy for Skydio to put together a few simple holiday packages that included their drone and a few drone accessories into a bundle.
- Promotions: There are certain times of year that aren’t necessarily tied to holidays that companies can create a holiday rush feel to their sales. It will depend on your industry when this happens, but it may correspond to a new season, or launch of a new product.
For example, DCL client Magic Spoon makes delicious cereal that is keto diet friendly. They are very keen to set up bundles for their customers so that they can try new flavors.
- Evergreen bundles: There are some complementary product combinations that always go together. If you’re a company with many SKUs there’s a high likelihood that some of them will go together well.DCL client iOgrapher makes accessories to turn your phone or tablet into a full blown filmmaking camera. At the beginning of the pandemic no one was buying video accessories, until iOgrapher put together a few kits for people working from home. Their business took off much bigger than it would have if they hadn’t marketed their products with a new spin.
- Selling slow moving stock: Bundling a slow-moving item in combination with a product that is a hot seller is a great way to get rid of excess inventory and avoid a deadstock situation. This can help with your inventory management by clearing more available space in your fulfillment center that can be used to warehouse new or popular products.
- Subscription boxes: Product bundling can be a great way to enter the growing subscription box marketplace. While bundling for subscription boxes initially started with obvious evergreen bundles of complementary products like razors and shaving cream, the product offerings have become more diverse over time. Bundling also allows you to create unique subscription combinations based on the season, holiday or changes in customer preferences.
Advantages of Product Bundling with a 3PL
Product bundling can be really difficult operationally.In order to ensure 100% accuracy of your product bundles, it’s important to work with an experienced 3PL who has a capable warehouse management system (WMS) as part of their fulfillment services. It’s also not something that every 3PL offers; ask your provider if they have any value-added services, bundling might be included.
There are a few ways to bundle products together. Make sure your 3PL can execute the type of bundles you need for your brand.
At DCL Logistics we have a bundling feature built into our proprietary order management platform, eFactory. With this tool companies can very easily choose the SKUs they wish to bundle. There are three main types of bundles we offer our customers:
- Regular bundled—two or more specific items, predesignated to ship as one part number.
- Configured—a set of items that can be added to a single package in any permutation that the end-consumer wants.
- Assembled to Order—designating an item that needs to be assembled with one or two specific components. This is designed for short-run assembly only as the bundles will be made as the items are received.
If you’re a brand looking to easily bundle your products for ultimate customer satisfaction, reach out to us for a quote. Our order management platform, eFactory makes it really easy to create bundles virtually, which takes the hassle out of it for you.