Bundle Pricing: Definition & Examples for Small Businesses

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Bundle pricing is the practice of selling a set of items as a package for a price lower than what the items would cost if sold separately. The concept is to make purchases easier for consumers by including associated items together, and by giving them one price that represents some type of discount. For the business, this can be beneficial, leading to more sales of items. In a small business, it’s a good idea to take a look at bundle pricing and see whether it can work for that particular business model.

Bundle Pricing Example

Examples of bundle pricing range in magnitude from everyday items to large purchases:

  • The purchase of a “combo meal” at a fast-food restaurant, usually providing an entree, a side and a drink for one single set price.

  • Cable television packages that offer a collection of channels in a single bundle or tier.

  • A new car purchase often comes with offer packages containing a set of upgrades for one streamlined price.

  • Software packages that offer multiple programs and/or apps with one single purchase.

  • A television purchase that also includes a speaker set, DVD player and TV stand.

Advantages of Bundling

For a business offering bundle packages, one key advantage is simplicity. Offering a set package — at a price point that remains profitable but still represents a discount over items purchased individually — streamlines marketing and sales for those items, allowing the business to sell the same set of items to every consumer.

Bundle pricing benefits also include allowing businesses to sell weaker or lesser-known products alongside stronger, more popular products, which can increase profit opportunities and help eliminate needed inventory space. Selling bundle packages often increases sales volume (more units are sold), profit margins (the cost of selling the goods is decreased due to streamlining) and product exposure (new products included with known products).

To consumers, the advantage is often at the price point; if all of the items in the bundle have value to the consumer, then purchasing the bundle at a reduced cost makes it a good deal and a good decision. Consumers also usually prefer the simplicity of making one purchase, rather than shopping around for each individual item.

The bundle is at a disadvantage when it includes one or more items the consumer may not want; at that point, the consumer may prefer to pay by the item rather than purchasing the streamlined bundle. Thus, the key to marketing a successful bundle is to play up the value of all of the components, even ones the consumer may not have been looking for initially.

Value of a Bundled Package

For small businesses, the value of a bundled package lies mostly in the chance to offer high-margin items alongside low-margin items to increase sales of both. It’s a chance to introduce consumers to products they might not know about, which increases brand awareness and can improve future sales. It also can help small businesses that are just starting out; by streamlining options, the sales process becomes simpler for both the customer and the person at the point of sale. Simplicity can translate directly to lower costs in many ways.

Promoting a bundle is also a good way for small businesses to attract new customers. Consumers who aren’t necessarily aware of the product line might see the potential value in a bundle and then decide to give it a try. For a small business offering a number of high-margin items, a bundle creates a simpler entry point for new customers to get a better handle on what the business offers. Bundle pricing is a good strategy for a small business to introduce something new and draw attention to its usual offerings.

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About the Author

Danielle Smyth is a writer and content marketer from upstate New York. She has been writing on business-related topics for nearly 10 years. She owns her own content marketing agency, Wordsmyth Creative Content Marketing (www.wordsmythcontent.com) and she works with a number of small businesses to develop B2B content for their websites, social media accounts, and marketing materials. In addition to this content, she has written business-related articles for sites like Sweet Frivolity, Alliance Worldwide Investigative Group, Bloom Co and Spent.