How Beauty Brands Use Virtual Bundles as Upsells to Increase Average Order Value
Our eFactory platform gives brands the ability to create just-in-time bundles and iterate to meet consumer trends.
Gloss Ventures is a social influencer-based CPG growth engine that owns and operates a handful of very popular beauty brands (like Sacheu). These CPG companies build virtual bundles to upsell their products—plus bundling has helped them lower their overall shipping and fulfillment costs, maximize inventory efficiency, and provide their international DTC customers with exactly the products they want.
DCL Logistics provides a virtual bundling tool that allows brands like Gloss Ventures the ability to create, manage, change, and iterate their bundles through our fulfillment platform.
Quinn Roukema, Co-founder of Gloss Ventures says, “It took less than a week to be up and running. DCL helped us set up the kitting and the bundles. Then we synced that with our ERP system, and everything has been working really, really smoothly.”
Ecommerce Case Study: Gloss Ventures
- Problem: Gloss Ventures needed to increase average order value quickly for their many startup beauty brands.
- Solution: DCL Logistics has a comprehensive virtual building tool that allows brands to create, change, and track product bundles through our fulfillment management platform, eFactory.
- Result: Gloss Ventures is able to create just-in-time bundles and update their bundling strategy to meet consumer trends.
The Benefits of Bundles
Quinn says, “We sell a variety of bundles on our websites—we use them as upsells because they increase our average order value quite a bit. Plus they give us a lot more flexibility. Being able to bundle products has been really helpful for us.”
Customers want a deal, and sellers want to increase customer cart size. Bundles make these both possible, and virtual bundles make them simple. Beauty brands are the perfect vertical for bundling products. Customers are often buying relatively low-cost items that are well suited to be purchased in tandem with related products (think: multiple colors, a product and it’s applicator, etc).
While bundles may seem cumbersome for the seller to put together, modern fulfillment software that can integrate with a warehouse ERP system makes it now easier than ever.
Gloss Brands sees huge value in creating bundle options for their beauty brand customers; the following are direct benefits of virtual bundling.
Increased Operational Efficiency
Virtual bundles help avoid the bottlenecks and incremental costs that happen with pre-kitted bundles. Pre-kitting bundles requires a long lead time, excess packaging materials, plus the coordination of preparing and stocking the bundles for an unknown amount of consumer interest. With virtual bundles, sellers can assign products to a bundle via inventory management software so that their fulfillment provider then assembles that bundle and assigns it as a new singular SKU, making it simpler to fulfill when an order is placed.
Better Product-Market Fit
Virtual bundles are time-efficient and cost-efficient which allows the seller to test which items perform best bundled together before having to pre-kit and stock too many. A seller can very easily put together three different bundles at one time, and test the viability of each assortment out. Without having to pre-kit thousands of each bundle type, if one is a clear winner the seller can easily eliminate the other two without worrying about having a bunch of deadstock in the warehouse.
Flexible Inventory Management
Whether you’re a startup or a veteran business, you’re always trying to improve inventory management to run an efficient profit margin. Virtual bundles can improve inventory flow because a seller can send all inventory to the fulfillment provider as individual items. There is no sorting or assembling needed before the items go to the fulfillment center.
Bundles will be built and stocked upon request. A seller might put in a minimum/maximum order for a specific type of bundle, which means the fulfillment provider is obligated to always have at least the minimum number in stock at any given time, but no more than the maximum number. This allows the fulfillment provider the opportunity to manage kitting projects within the schedule of the warehouse, and the seller doesn’t have to be laser-focused on watching their inventory count on a daily basis.
Because we have an omnichannel approach we need a fulfillment partner that can execute B2B just as well as DTC. Anyone can pack a bag, or ship an FBA shipment to Amazon, but adding retail is a whole different ball game. There’s compliance, there’s routing, and a ton of different steps. Of all the warehouses that we vetted, DCL is the only one who really takes that stuff very seriously—they have a quality assurance checklist that gets marked off in the warehouse. That’s the stuff that sets them apart, and that’s why they’ve been our partner for so long.
Quinn says, “Bundles have saved us a lot in terms of shipping costs. We also see less waste in our packaging.”
Virtual bundles can help you save on costs (versus pre-kitted bundles). The savings are two-fold: it’s more cost-effective to ship the items to the warehouse or fulfillment center as is (for individual sales as well as bundles), rather than pre-kit some and leave some as individual; secondarily the packing materials used for the kitting process (special cartons, stickers, labels, etc) will either already be at the fulfillment provider if you use items they can provide, or if you ship it direct from manufacturing you won’t have to open it up, re-package it, and send it.
Quinn says, “We don’t have to have specific packaging for the three different products. Everything is getting put into one package so we don’t have to have a lot of extras. We send DCL the units and they put them all together in a carton and send it out. It’s so much simpler.”
By sending your packing materials directly to your fulfillment provider (without taking them apart to assemble) you’ve just saved on shipping. Plus it probably reduces your carbon footprint.
Interested in bundling your products, read The Benefits of Virtual Bundles.
Why High-Growth Companies Choose to Upsell with Virtual Bundles
Quinn says, “We originally thought about bundling as a way to educate the customer—to make it clear that certain tools and products actually work really well together. We wanted to insinuate these as the standard user experience for our customers.”
Because the process of setting up virtual bundles is so simple, it was an easy project to initiate. Quinn adds, “It took less than a week to be up and running. DCL helped us set up the kitting and the bundles. Then we synced that with our ERP system, and everything has been working really, really smoothly.”
Not all fulfillment providers can set up virtual bundles. It requires the right suite of tools and technology. Amazon FBA (fulfilled by Amazon) allows virtual bundles to be set up, but many sellers find working with Amazon difficult to get started. Working with a 3PL with the right capabilities is key in making your virtual bundle experience seamless.
“Because we have an omnichannel approach we need a fulfillment partner that can execute B2B just as well as DTC,” Quinn says. “Anyone can pack a bag, or ship an FBA shipment to Amazon, but adding retail is a whole different ball game. There’s compliance, there’s routing, and a ton of different steps. Of all the warehouses that we vetted, DCL is the only one who really takes that stuff very seriously—they have a quality assurance checklist that gets marked off in the warehouse. That’s the stuff that sets them apart, and that’s why they’ve been our partner for so long.”
About Gloss Ventures
Gloss Ventures is an omni-channel growth platform for next generation CPG brands. Its portfolio of companies are primarily personal care & beauty brands (like Sacheu) and their success is largely leveraged through a proprietary software-driven social influence growth engine. Founded by DTC + Amazon + Retail experts, this CPG powerhouse incubates and/or acquires three to five new brands each year.