Boosting profits with bundling

Join us alongside our guest Marjorie Adams, Founder & Chief Executive Officer of Fourlane, who shares her experience and tips for product bundling. Marjorie is a seasoned QuickBooks expert, a QuickBooks product beta tester and is also a regular contributor to Forbes.

What is bundling?

Bundling is a strategy of selling complementary products together. It can help make shopping easier and more cost-effective for customers. For retailers it can help create a higher ticket price and drive more sales.

If you’re new to bundling, start by considering how bundling could work in your retail environment. It can work effectively both in store and online. Think about products that go well together, and how you could bundle them at a slightly lower price. Bundling ideas:

1. Slow moving product: Use bundling to drive sales of a slow-moving product. If a certain tee shirt is taking up shelf space, consider bundling it with a faster moving pair of shorts. Now you’ve helped sell a product that wasn’t catching customers’ attention.
2. New products: Bundling is a fantastic way to Introduce a new product to customers. You can attach the new product to a customer favorite.
3. Gift with purchase: This approach is a variation on traditional bundling. Perhaps you’ve also experienced a “buy two get one free,” which may encourage you to purchase a tad more than intended and be rewarded with a free product.

With every bundling test you do, Marjorie recommends some steps to follow to help structure it so you can effectively evaluate its success.

1. Define your goals

Before you start your bundling, decide if the goal is to increase your average ticket price, or simply get rid of the slow-moving item. This goal setting helps you decide if your bundling was successful and should be repeated, adjusted or scrapped.

2. Test pricing

Remember you don’t have to stay committed to one price. Start with the highest price (smallest discount) and continue to increase the discount if the bundle isn’t moving. A lower price will appeal to more consumers but will also decrease your margin.

3. Monitor

Marjorie recommends creating a new SKU for every bundle, making it easy to track in QuickBooks. If you adjust pricing or test product variations, the new SKU establishes a way to pull reports, monitor sales and evaluate the different pricing tests you perform.

For online retailers: Marjorie shares how her clients check for abandoned shopping carts, then set up automations to reach out to offer those customers a percent off to complete their purchase. This is an extremely effective way to remind and motivate a customer.

“A best practice for retailers is to check the average ticket price report weekly to monitor its change,” says Marjorie.

4. Communicate

Another best practice Marjorie recommends is to clearly communicate the bundle offers with staff. Explain the “why” so your staff can sell it effectively to the customer. Marjorie also recommends practicing with your sales team so that they are better equipped to handle different customer scenarios.

She discusses the value of creating a fun sales competition with your team. Challenge them to put together the best bundle to try it out at the store level. Be sure to monitor progress and share the results with the entire company to determine the success of the bundling. Celebrate with prizes!

Client story

Marjorie and her team are always helping clients find ways to sell more. While at a client warehouse helping with inventory management, she noticed that the client, a dental provider, didn’t stock any toothbrushes on the warehouse shelves. She was suprised, but then relieved to learn the client had opted to bundl toothbrushes and toothpaste together to simplify fulfillment.

“We’re always asking what add-ons sell well together to help boost sales,” says Marjorie.

Subscriptions

Creating subscriptions can help with recurring revenue. It works especially well for products that need replenishment. It is important for retailers to think creatively about subscription packs. They can include all types of products. Marjorie loves subscriptions and how effective they can be. Fourlane has a skincare manufacturer client who sells a product that lasts ninety days. The client noticed customers would wait 120 or more days to repurchase. In an effort to increase repurchase, the client shifted to a smaller product size intended to last thirty days, offered a subscription service, and sold a refill SKU without the product dispensing pump. This approach immediately improved repurchases and paved the way for the retailer to consider adding a complementary product such as toner or sunscreen into their subscription purchase plan.

If you’d like help with your bundling or starting a subscription, get in touch with Marjorie at Fourlane or one of our other retail expert QuickBooks Solution Providers.

All opinions and advice expressed here are personal and do not represent those of Intuit QuickBooks. We recommend you work with a professional to assess your specific business needs. Additional terms, conditions and fees apply with app integrations.

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