Product bundling boosts sales by offering multiple related products at a price that simplifies shopping and, in the eyes of the buyer, a good discount. Then they buy more.
Well, that’s the overall idea. The less decision fatigue, the faster and easier purchasing becomes—watch out for choice reduction. Reduce choice at your peril.
Happy customers
How do accountants help sales managers get it right?
Is the product capable of pure bundling? Does widget A need product B to put it together? Or is choice reduced to the point that the software suite is only available to the consumer?
Will cross-category help? Buy a smartphone and the extended warranty, screen protector, case, and extra battery charger. You get the idea.
So, the consumer sees it all together at a lower price feels like a smart deal.
Margin management matters
Accounting is vital in creating a sense of savings with good margins in the supply and distribution line.
When too many options are present. For example, a price ceiling or floor for the sales staff, which means they must consult with a manager for approval. Is the consultation process beneficial for the customer in the sales process? It adds a time cost, especially during peak selling periods.
Solve it
A great idea is to sit down with your accountant and build an initial template from supply and distribution with all the costs, not just a select few put in. Set the overall business margin to ensure the bundle price reflects real value without cutting into the set business margin.
Test different pricing strategies and choose products that naturally go together before loading into the selling margin template. The selling margin template in use at the point of sale becomes a simple traffic light display.
Keep it simple to help business efficiency and the sales process. Connect your dots, we are here to help, no matter the size.
We hope you’re enjoying our Illum jottings, just a note though. The information provided here is intended for general informational and educational purposes only. While we aim for accuracy, we can’t guarantee that this content will apply to your specific situation—everyone’s circumstances are unique.
Illum’s is not a substitute for personalized advice from a qualified accountant, tax advisor, or any other professional. If you have questions specific to your individual circumstances, we strongly recommend consulting a professional for tailored advice.