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What Is Product Bundling?
By Razvan PopescuUpdated 15 min readProduct bundling is a sales strategy where multiple products or services are packaged together and sold for a single price. The approach offers customers combined goods that may be complementary or separate. Retailers aim to enhance purchase value and increase convenience for shoppers.
With the shift toward customer-centric marketing, product bundles have emerged as an effective tool to drive sales and improve customer satisfaction. Businesses increase their average order value and inventory turnover while customers enjoy the benefits of a curated selection at a better price point.
Key Takeaways
- Product bundling is a strategy where multiple products or services are grouped together and sold as one unit at a discounted price. This aims to enhance the purchase value and customer convenience.
- Various types of bundles exist, including pure product bundles, mixed product bundles, cross-industry product bundles, new product bundles, gift product bundles, and more.
- Numerous companies like Apple, McDonald’s, Microsoft, Comcast, Sephora, Amazon, Nike, and many more successfully use bundling in their sales strategies.
- Bundle pros for customers include value for money, convenience, and the low-risk opportunity to try new products. Cons include less freedom of choice, perceived quality risks, and potentially complicated returns.
- Bundle pros for businesses include increased sales, efficient inventory management, effective marketing, and the opportunity to introduce new products. Cons include lower profit margins, the risk of lost opportunity, complexities in pricing, and possible overstock.
Product Combo Deals Explained
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Note: A “package deal” or “combo deal” is the same as a product bundle. Bundling is when a business groups together several products and sells them as one combined package.
Often, these bundles are offered at a lower price than if you were to purchase each item individually. This strategy benefits customers who seek value, variety, and convenience and businesses that aim to increase sales and move surplus inventory.
A common example of product bundling is a skincare package with a cleanser, toner, serum, and moisturizer. Instead of purchasing each skincare item separately, you can opt for the bundle that offers all four at a discounted rate.
What Are Some Examples of Product Bundles?
Companies like McDonald’s, with its bundled meals, and Amazon, with its “Frequently Bought Together” recommendations, have seen significant success by implementing product bundling.
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Attention: We’ve added a few examples below for informational purposes, but note that they might differ based on location, seasonal offers, or changes in company policy. Similarly, the companies mentioned below might have other product bundles too.
| Brand Name | Bundle Example |
| Apple | The Apple One subscription bundle includes several Apple services, such as Apple Music, TV+, Arcade, iCloud storage, News+, and Fitness+. |
| McDonald’s | Various bundles with a burger, fries, and a drink. |
| Microsoft | The “Microsoft 365” bundle offers software like Word, Excel, PowerPoint, and more through one subscription. |
| Comcast | Xfinity bundles that combine internet, cable TV, and phone services. |
| Sephora | Numerous bundles, including collections of skincare products from a single brand or various makeup items. |
| Amazon | Kindle bundles include a Kindle device, a cover, and a power adapter. |
| Nike | Occasionally offers bundles like a tracksuit set or a pair of shoes with a matching shirt. |
| Nintendo | Often sells its consoles bundled with popular games, like the Nintendo Switch with Animal Crossing: New Horizons. |
| HP | Laptop bundles that include a computer, a case, a mouse, and possibly even a printer. |
| Gilette | Bundles of shaving products include razors, blades, and shaving gel. |
| Adobe | The Creative Cloud subscription bundle includes a suite of software solutions like Photoshop, Illustrator, and Premiere Pro. |
| Spotify | Spotify Premium for Family bundles up to six Premium accounts for people living under one roof. |
| Blue Apron | This meal kit company provides weekly bundles of pre-measured ingredients and matching recipes. |
| Costco | Bundles on everything from tech gadgets to furniture sets. |
| AT&T | Bundled packages of internet, TV, and phone services. |
Types of Product Bundling
Product bundles can be a powerful tool for driving revenue and better inventory control. By combining products, retailers can use combo deals to appeal to customer desires for value, convenience, and discovery.
Package deals are classified into multiple types depending on the grouped products or the strategy behind the bundle. Here are the primary types of bundles:
Pure Product Bundles
This type of bundling happens when a retailer offers multiple products only as a bundle and not as individual products. The items in the bundle are sold exclusively collectively, promoting the purchase of a set. Telecommunication companies often use this strategy, offering phone, internet, and television package deals.
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Tip: Pure bundles don’t allow customers to buy the items within them as individual products or services.
Mixed Product Bundles
In mixed bundling, products are available for purchase both individually and as a part of a bundle. This strategy lets the customer choose whether to buy just one product or benefit from a discounted bundle.
A common example would be a fast food combo where you can buy a burger, fries, or drink separately, but you could also buy them together at a lower total cost.
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Tip: Mixed product bundling lets customers purchase the products individually as well, although likely at a higher cost.
Cross-Industry Product Bundles
This type of bundling involves complementary products or services from different industries or categories. An example could be a bundled offer from a travel agency that includes flight tickets, hotel accommodation, and car rental services at a combined, discounted price.
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Tip: While purchasing cross-industry bundle items separately is sometimes possible, the advantage is usually maximized when the customer gets all bundle components.
New Product Bundles
When a company launches a new product, it can bundle it with existing, popular products to boost its visibility and accessibility. This strategy incentivizes customers to try the new product and mitigates the risks of purchasing an unknown product.
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Tip: Sometimes, a retailer only offers the new product as part of a bundle – at least initially. This strategy can help boost the visibility and sales of the new product by associating it with well-known, popular items.
Gift Product Bundles
These bundles are often seen during holidays, special events, or similar occasions. They’re curated with a variety of products suitable for gifting.
For instance, a Christmas bundle might include holiday-themed items such as candles, soaps, and a festive mug. Product bundling gifts is convenient for shoppers and often has seasonal packaging that adds an extra appeal.
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Tip: In many cases, retailers also offer the items in a gift bundle for separate sale. This caters to customers who may not want or need the entire bundle. However, there may be cases where certain items are exclusive to the gift bundle so that they feel more exclusive.
Inventory Clearance Product Bundles
These bundles are created to clear out less popular or excess stock inventory. By pairing these items with bestsellers or popular products, stores ensure they’re sold rather than sitting in storage. This strategy is often employed during end-of-season sales or clearance events.
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Tip: Typically, customers can buy products from inventory clearance bundles independently as well, as the intention is to move excess or less popular stock. However, the bundle often provides a better deal, offering multiple products at a price lower than if purchased individually.
Buy One Get One (BOGO) Product Bundles
The BOGO strategy offers two products for the price of one, or the second product has a significant discount. The perceived value is high for the customer as they get more than they initially sought. BOGO bundles are an effective way to encourage customers to make larger purchases.
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Tip: The BOGO deal incentivizes customers to purchase more. However, if customers wish to buy only one item, they usually can purchase just one item from the bundle at its regular price.
Related Product Bundles
This type of product bundling involves grouping items that naturally complement or are usually purchased together. For instance, a digital camera might be bundled with a memory card and a camera bag.
Such bundles encourage customers to buy a complete set of products to improve their overall satisfaction with the primary item.
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Tip: While the bundles generally offer convenience and better value for the customer, the individual products are usually available for separate purchases as well.
Price Product Bundles
Price bundling puts together multiple goods or services and sells them at a single price. Businesses use price bundles to sell more items at a slightly lower price, thus increasing the perceived value for customers.
For example, a streaming service might bundle music, movies, and TV shows for a single monthly price. This method of product bundling can be quite effective at encouraging customers to expand their purchases beyond what they initially intended.
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Tip: While the bundle aims to provide value and encourage customers to buy a group of products, the individual items within the bundle are generally also available for separate purchase. This approach offers customers flexibility.
Seasonal Product Bundles
These are created to coincide with a season or holiday. For example, many companies offer summer bundles with sun protection products, beach accessories, and other season-appropriate items. The same applies to Christmas bundles with holiday-themed products, etc.
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Tip: Customers can likely buy items from seasonal bundles independently. While a “Summer Fun” bundle might include sunscreen, a beach towel, and a pair of flip-flops at a convenient price, shoppers can still buy only 1 or 2 products at their regular price.
Thematic Product Bundles
These bundles collect items that fit a particular theme. For example, a “Home Spa” bundle might include bath salts, scented candles, a bathrobe, and a facial mask. This type of product bundling helps customers get many complementary products at once at a favorable price.
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Tip: While purchasing the bundle will likely provide a better deal (e.g: yoga mat + resistance bands at a discounted price), the individual items within themed bundles are generally also available for separate purchase.
Starter Product Bundles
For brands offering products that work best when used together, a starter bundle allows customers to purchase everything they need to get the most value. For example, a painting starter bundle could include paints, brushes, a canvas, and a palette. Or, a PC gaming bundle might include a CPU, GPU, and motherboard.
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Tip: Customers can also purchase items from starter bundles independently. While a gardening tools bundle could have gloves, a trowel, and a watering can at an advantageous price, customers can purchase a specific item from the bundle separately.
Loyalty Product Bundles
These are special bundles offered exclusively to loyalty program members or repeat customers. They provide return buyers with additional value as a reward.
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Tip: Loyalty bundles often come at a discounted price or include exclusive products. However, the items within these bundles are usually also available for separate purchases.
Custom Product Bundles
Some businesses allow customers to create their own bundles. This strategy allows customers to choose exactly what they want while benefiting from the bundle discount. For instance, a cosmetics company might allow customers to create their own skincare bundle by choosing a cleanser, toner, serum, and moisturizer from their range of products.
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Tip: The individual items within such a custom bundle are always available for separate purchase since the customer is building the bundle from the standard product range. However, the bundle will often provide better value for money.
Pros and Cons of Product Bundling
Like all strategies, package deals come with their share of advantages and disadvantages. Let’s explore a few benefits and challenges:
For Customers
👍 Combo Deal Pros
- Value for money: bundling often provides a better deal than purchasing items separately, increasing the overall value.
- Convenience: customers can enjoy a simplified shopping experience. Purchasing a set of related products together instead of browsing and deciding on each individually is easier.
- Trial opportunity: bundles offer customers new or exciting products they might not have considered separately. It’s a low-risk opportunity to try them out.
👎 Combo Deal Cons
- Less freedom: some customers prefer to choose each product individually and may not need or want every item in a bundle. This means bundles could restrict their freedom of choice.
- Perceived quality risks: if a bundle includes a product seen as less desirable or of lower quality, it may devalue the entire bundle for the customer.
- Complicated returns: if a customer isn’t satisfied with one product in a bundle, they might need to return the entire bundle, leading to inconvenience.
For Businesses
👍 Combo Deal Pros
- Increased sales: product bundling can encourage customers to buy more items at once, increasing the average transaction value.
- Efficient inventory management: bundling slower-selling or overstocked items with popular ones can help move excess inventory more quickly.
- Effective marketing: bundling allows for cross-promotion of products, making marketing efforts more efficient and cohesive.
- New product introduction: package deals help businesses introduce new or less popular products to customers by pairing them with best-sellers.
👎 Combo Deal Cons
- Lower profit margins: bundling often comes at the cost of reduced profit margins due to the discounted pricing of the bundle. However, the potentially significant increase in sales volume offsets per-item profit margins and leads to profitability.
- Lost opportunity: there’s a risk that customers who would have bought more expensive items individually will opt for the cheaper bundle, potentially reducing overall revenue.
- Complex pricing: determining the right price for a bundle can be challenging as it must balance providing value to the customer and maintaining profitability.
- Possible overstock: if a bundle includes items in low demand, there’s a risk of overstocking these products if they aren’t sold in the bundle.
Product Bundle FAQs
What Is a Package Deal?
A package deal is an offer where multiple items, services, or conditions are grouped together and sold or accepted as one unit. This term is widely used in various industries, including retail, travel, telecommunications, and more. It is also called product bundling, as it’s most often applicable to retail.
Such a deal aims to enhance customers’ value perception, stimulate sales, and differentiate the business from competitors’ offerings.
How Is Pricing Determined for Product Bundles?
Pricing is less than the sum of the individual items’ prices, incentivizing customers to purchase more. The discount reflects the business’s strategy to provide customers with cost savings by selling multiple items together at a lower price.
Can I Buy Items from a Bundle Separately?
This depends on the retailer. Some retailers offer both individual items and bundles, while others might exclusively sell certain items as part of a bundle.
Can I Customize a Product Bundle?
Some companies offer the option to customize bundles, allowing customers to choose which items they want in their bundle. However, this depends on the company and the specific offer.
What If I Want to Return an Item within a Bundle?
Return policies for bundled items vary by retailer. Some may allow you to return individual items from a bundle, while others may require you to return the entire bundle. Always check the company’s return policy or contact their customer service for clarification.
Why Do Companies Offer Product Bundles?
Companies offer bundles to increase sales, clear out inventory, introduce new products, and provide value to customers. Bundling often encourages customers to try new products and buy more items at once.
What Are the Types of Product Bundling?
There are several types of product bundling, including pure bundling, mixed bundles, cross-industry bundles, BOGO bundles, seasonal bundles, starter bundles, loyalty bundles, and more.
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