Bundles and multi-packs are versatile tools for many ecommerce sellers. Whether you’re looking to increase profits on lower-priced items or hoping to encourage customers to buy in bulk, bundles and multi-packs can be a great way to generate growth and save on fulfillment costs.
Though selling bundles and multi-packs may sound simple, these offerings actually present a unique set of challenges for even the most experienced online seller. This is especially true when it comes to using Fulfillment by Amazon (FBA), so there are some important factors to take into account before you use these fulfillment options. Read on to learn when, why and how to get started down this road.
If it makes sense for the kinds of products being sold, most brands should consider using product bundling and multi-packs in their ecommerce strategy. Here’s why:
For the same reason people love shopping at wholesale retailers, many customers love megapack discounts. The best part? Your volumes increase while your customers are happy to save costs by receiving multiple items at once. Win-win.
For online marketplaces like Amazon and Walmart, bundles and multi-packs allow you to consolidate referral fees and commissions, which can make it simpler to meet your per-unit revenue targets.
To no one’s surprise, when you sell bundles, your per-order margins increase because the retail price is typically higher than if you sold the product individually. The average sales price (ASP) typically sees an increase as customers usually pay a premium when buying a variety pack to cover the cost of kitting. However, it’s still more cost-effective for the end consumer to purchase a variety pack — like a flavor mix of mocha, vanilla and original — than to purchase a full case of each.
One of the most common reasons our clients use multi-packs is to sell items that fall under the threshold for profitability. If you’re using FBA, then minimum per-order fees will apply. If your 3PL provider charges per-shipment fees, consolidating multiple products to a single fulfillment transaction saves on those costs. Note: shipping multiple items may not always result in lower shipping costs from carriers — especially for heavy items or products with high cubic volume — so it’s always worth doing the math ahead of time. Use the Whitebox Fulfillment Measurement Calculator or Amazon’s FBA calculator to help you check your margins.
People love to have choices, so not only do brands typically see an increase in order volume when they sell multi-packs, they also see an increase in new-to-brand customers. First purchases typically come through variety and multi-pack offers as new-to-brand customers enjoy trying a variety versus purchasing just one flavor or option. If the choices are only a single item or a six-pack, chances are the customer who intended on buying just one will probably stick with that plan. If you offer one-, two-, four- and six-packs, the customer is much more likely to consider buying somewhere in the middle range of two to four items. And of course, even selling that two-pack is a win for you.
First purchases typically come through variety and multi-pack offers as new-to-brand customers enjoy trying a variety versus purchasing just one flavor or option.
Offering multi-packs gives customers the option to buy products in bulk at a lower price than if purchased separately. Shoppers find value in this, especially for products they know they will need multiple times, like paper towels or other consumables.
Multi-packs and bundles offer the end consumer the option to try multiple flavors or sizes of a brand’s products. This is especially true for food and beverage categories. As we mentioned before, customers love choices and — most importantly — crave confidence that they’re making the right choice. Offering variety packs gives customers (especially new-to-brand customers) confidence to branch out and try new things, while your brand reaps cross-selling benefits and gets new products into your customers’ hands. At Whitebox, we have insights on what products customers are purchasing together and utilize this data to cross-sell products for our brands by implementing bundles.
Offering variety packs gives customers confidence to branch out and try new things.
When offering multi-packs and bundles, you should always create a single listing page for each group of similar products. This means if you sell tomato basil sauce in a variety of quantities, the options would appear in a drop-down menu on one page. This will allow you to build up more reviews faster, thus increasing your product’s credibility and the likelihood of getting your products to appear higher in Amazon search results. (Rankings are based solely on sales volume, so combined listings can give you a helpful boost.)
It’s important to note that consolidating listings doesn’t always result in higher returns. It depends on the brand and its typical customer’s behavior. If you consolidate existing multi-packs into a larger pack size and the retail price increases, your returns will be higher. In these cases, it’s important to monitor volume versus average sales price (ASP) to ensure that if volume decreases due to the ASP being higher, total sales aren’t dropping.
Another benefit of consolidated listings? It’s easier to upsell to customers without them having to leave the page. Plus, consolidating multi-packs can also help reduce expired products in Amazon’s warehouses and streamline ad dollars to one specific listing.
Of course, it almost goes without saying that before you spend your time strategizing, you’ll want to make sure your product will benefit from being sold in a multi-pack. Generally, products that are consumable — e.g., food, household goods or office supplies — are the best candidates for multi-packs. If you have a unique item that a customer will probably only want one of — e.g., hand-crafted jewelry — multi-packs won’t be for you.
If your products are sold at extremely high price points, multi-packs may not be the best fit. However, don’t rule yourself out completely — you could consider bundling an accessory item like a carrying case for a portable speaker.
Bundles and multi-packs may not be best suited for brands that sell large, heavy items. These products can be difficult to fulfill and have specific tracking needs for various marketplaces.
When you’re getting started with multi-packs, it makes the most sense to sell lower-quantity configurations. Begin by analyzing your existing sales data: do customers typically order two or three of the same item at a time? Does selling a case-pack of products online make the most sense for your brand? Target what the data tells you. If you’re unsure where to begin, partnering with a 3PL like Whitebox that can create multi-packs on the fly allows you the flexibility to experiment and gather useful data.
Using a third-party logistics (3PL) provider? Take into account these fulfillment considerations:
In order to use FBA, a seller must pre-pack multi-packs and send them to Amazon ready to ship. This can be an obstacle for sellers who are used to shipping items exactly as they are manufactured.
You always want to make sure that your multi-pack is solid, taking into account the unique challenges associated with shipping many items together. The last thing you want is for your multi-pack products to be damaged in the warehouse or in transit. In addition to thinking about a package being jostled against other packages in its journey, you must also think about how the product will interact with other items within the package as well.
You’ve calculated margins for your original product, but be sure to consider that each size variation requires its own calculation. So, if you sell three-, six- and 12-packs, make sure you have sufficient margins for each and adjust prices accordingly. It’s also important to know whether or not the entire order can be fulfilled in a single shipment. At Whitebox, we can provide you with a margin analysis that includes your cost of goods sold (COGS) to ensure you’re turning a profit.
When offering build-your-own bundles on your branded online store (like Shopify), it’s important to consider the way information is communicated with your fulfillment partner. Many build-your-own bundles can create an exceedingly high number of combinations, so this can complicate your fulfillment process. Work with your fulfillment partner to understand their capacity to receive this order data to ensure your customers always get what they expect.
Moving toward multi-packs can seem like a leap — especially when you consider the extra work of packing and calculating individual margins — but it is well worth the energy. Whitebox has helped many brands grow successfully by using multi-packs:
Ready to accelerate your brand’s growth and save costs with multi-packs? Partner with Whitebox today!
