How Your Amazon Brand Can Benefit From Product Bundling
Amazon is an extremely competitive marketplace. To survive and thrive as an Amazon seller, you have to constantly look for ways to lower your costs and maximize your revenues.
Product bundling is a marketing strategy that involves selling multiple products as one. Take Happy Meal as an example. This marketing technique benefits the customers because they’d pay less if they buy a bundle than if they bought all the items separately.
The fast-food industry has been using this strategy for years. But today, many other types of products are sold bundles. Microsoft Office is sold as bundled software that includes PowerPoint, Excel, and Word. You can also easily find a beach kit that includes flip flops, towels, and sunscreen. You can even buy several types of gift sets, especially during the holiday season.
Product bundling is usually done as a promotional activity. Supermarkets usually bundle products that have been sitting in the warehouse for a long time just to get rid of them. But, a lot of businesses sell bundles all year long. Telecommunication companies bundle their services, offering different data, call, and text plans to their customers. A lot of makeup companies are selling makeup kits, which usually include a lipstick, foundation, blush, highlighter, eye makeup palette, concealer, tweezers, and brushes.
How Product Bundling Can Increase Your Amazon Revenues?
Product Bundling is a great strategy that Amazon brands can use to increase their sales and ultimately win the Buy Box. It looks deceptively complex, but this marketing technique is surprisingly easy.
The Amazon bundling strategy can significantly increase your revenue in many ways, including:
1. It increases your customers’ order value.
Bundling allows you to cross-sell your products. Let’s say you own a yoga brand that sells mats, towels, blocks, and pants. Your customers need all four products for their daily yoga practice. But, they’re less likely to buy all four if they are sold separately.
This strategy also increases your average order value because it encourages shoppers to spend more. For example, if you sell your products individually, most customers would probably just spend $45 per transaction. But, if you bundle several products, your shoppers’ average order value would most likely go up to $150.
2. It decreases your customer acquisition costs.
It’s pretty hard to acquire a new customer these days, so it’s no surprise that customer acquisition costs are increasing by the minute. But, by increasing your shoppers’ order value, you increase your revenue at a lower cost. This increases your ROI (return on investment).
3. It helps you get rid of slow-moving products.
Carla sells essential oils. She has no problem selling sweet and calming scents like vanilla, lavender, chamomile, ylang-ylang, and jasmine. But, she has a hard time selling stronger scents, such as grapefruit, patchouli, tea tree, oregano, vetiver, frankincense, and peppermint. She also had a hard time selling diffusers.
To get rid of her slow-moving products, she decided to sell her essential oils in bundling bags and boxes. Each box contains a combination of three sweet-smelling oils and three strong-smelling ones. Each bottle costs $30. But, if the customer decides to buy a box, he’ll pay only $140 for 6 bottles plus a diffuser. This means that he’s only paying $23.33 per bottle and saves a total of $40. He also gets a diffuser for free.
Bundling creates a win-win situation. The customer gets a huge discount while you prevent losses by selling your slow movers.
4. It gives you competitive advantage.
Bundling gives you a competitive advantage because it allows you to create a unique product. This can help you steal away your competitor’s market share and win the buy box game.
5. It increases your visibility in the Amazon SERP (search engine results page).
Bundles usually have a separate UPC (universal product codes). This means that they appear as an independent list in the search results.
For example, if you optimize your existing listings for the keyword “coffee”, your grounded coffee and coffee beans products would appear in the search results. Now, let’s say that you decided to offer a bundle that’s also optimized for the keyword “coffee”. This gives you more opportunities for conversion, optimization, and visibility.
Increased search engine visibility often increases your product’s popularity, credibility, and sales.
6. It increases customer satisfaction and loyalty.
Shoppers love discounts and good deals, so bundling can significantly increase your customer satisfaction and loyalty.
Bundling can also increase your brand value and equity.
7. It increases your efficiency.
When a customer places an order for multiple products separately, you have to prepare each item’s packaging and ship it separately.
But, when they order a bundled package, you just have to prepare and ship all the items in one go. This increases your order fulfillment efficiency and reduces your marketing and distribution costs.
It’s a good opportunity for product line expansion.
Bundling allows you to place an order value threshold. This allows you to expand your product lines and offer multiple solutions to your customers.
For example, let’s say that you own a company that produces yoga mats. You want to produce mat cleaners and calming room sprays, but you’re not sure if your existing customers would buy them. Bundling your products allows you to experiment, create more products under your brand, and expand your product lines without having to worry if the new products will sell or not.
The Amazon Bundling Policy
Bundling is fun and a great way to increase your revenue. But, you can’t just bundle up several things and create a listing. To avoid penalties, you should follow these policies:
You must bundle highly complementary products. For example, you can bundle different skincare products such as soap, lotion, and sunscreen. But, you cannot bundle a bottle of lotion with baking supplies.
Each item in the bundle must have its own UPC or ASIN.
The bundle (as a whole) must also have its “universal product code” or UPC.
You should bundle branded products. You can’t bundle generic items.
All items must have the same manufacturer warranties.
The most expensive item in the bundle should be listed as the “primary product”.
You can even include the most expensive item on Amazon in your bundle. But, this rule has an exemption, which we will discuss later on.
You must list the bundle under the brand and the category of the primary product.
You’re allowed to add a BMVD or video game product, but only as a secondary product and only if it’s related to the primary product.
You can’t list a video game as the primary product even if it’s the most expensive item in the bundle.
You can’t list multipacks (such as five pairs of socks) as a bundle.
Use these formats in creating your product listing:
Bundle – “X” item: item 1, item 2, item 3.
Main Product + Bundle with + item 1, item 2, etc.
Main Product + Bundle with +item 1, item 2.
A bundle can be made of various branded items. But, the bundle should be branded based on the most expensive item in the bundle. For example, let’s say that you own a yoga brand. You want to bundle your yoga mats and towels with another brand’s mat cleaner and essential oils. Since the yoga mat is the most expensive item in the bundle, you’ll have to use your brand name on the package.
Your image must contain each of the products included in the bundle.
Best Bundling Practices
Bundling is a great way to reduce your distribution cost and increase your revenue. But, you must have the right bundling strategies to increase to maximize your returns and profits.
Here’s a list of best bundling practices that you can use:
Bundle items that are often bought together. Let’s look at a Happy Meal as an example. It works because burger, Coke, and fries have this intrinsic synergy.
Emphasize savings when you’re marketing your product outside of Amazon. Customers love to score great discounts.
Make sure that you create unique bundles. When your product is unique, you won’t have a lot of competition so you win the Buy Box most of the time.
Create multiple product bundles so your customers have a lot of choices.
If you have your own eCommerce store, you can offer “build your own bundles” which allows customers to create their own bundles.
Analyze your competition and offer something they don’t. Let’s say that you’re selling wine and most of your competitors are bundling wine with glasses. What you can do is you can bundle wine with cheese, crackers, and caviar spreads.
Product Bundling is a great strategy. It helps you get rid of your slow moving products. It helps you cut your losses. It also increases your revenue because it increases your average order value without increasing your transaction costs. It gives you an opportunity to expand your business and introduce new product lines to your existing customers.
But, to get the best out of this marketing approach, you must do it right. Contact us if you need help in creating the right bundling strategy. We can provide a number of business and marketing solutions that can help you grow your business.