Bundle Profit Optimizer
Calculate the profitability of selling items together. Ensure your bundle discount doesn't destroy your blended margin.
Bundle Contents
Profit Analysis
By bundling, you are giving up $10.00 in profit per unit sold. However, if this bundle increases your conversion rate or order size, the total profit volume may be higher.
Margin Blending Analysis
The goal is to sacrifice a small amount of margin % to gain a large amount of profit $.
Effective Discount
This is the real price cut you are giving. If it's >20%, ensure your costs are low enough to handle it.
Profit Per Unit Change
The dollar amount you 'lose' per sale by bundling. Ask yourself: 'Will this bundle cause customers to buy items they otherwise wouldn't?' If yes, the loss is worth it.
Blended Margin
Ideally, your bundle margin should stay above your minimum profitability threshold (e.g., 50% for DTC brands).
Execution Steps
Add items to your virtual bundle (e.g., Product A + Product B).
Enter the cost and individual selling price for each item.
Set your 'Target Bundle Price'.
Compare the 'Separate Profit' vs 'Bundle Profit' to see the impact on your bottom line per unit.
Pro Strategy
- Bundle a high-margin accessory with a low-margin core product to blend the margins.
- Use bundles to clear slow-moving inventory by attaching it to best-sellers.
- Ensure the bundle discount is at least 10-15% less than the sum of parts, otherwise the incentive to upgrade is too weak.
Core Concepts
Average Order Value (AOV)
The average amount spent each time a customer places an order. Bundling is the primary tactic to increase AOV.
Mixed Bundling
Offering products both individually and as a bundle. This usually maximizes revenue by capturing both price-sensitive and convenience-seeking customers.
Consumer Surplus
The difference between what a consumer is willing to pay and what they actually pay. Bundling captures this surplus from different products.
What is Bundle Profit Optimizer?
Bundling economics leverages the heterogeneity of consumer demands. By grouping products, you average out the varying willingness-to-pay for individual items, allowing you to capture more total revenue from a broader set of customers.
Best For
- • Increasing Average Order Value (AOV) without acquiring new customers.
- • Clearing excess inventory of slower-moving SKUs.
- • Reducing shipping and fulfillment costs per unit sold.
Limitations
- • Can cannibalize sales of high-margin individual items.
- • If the bundle discount is too deep, you might lose money compared to selling items separately to loyal customers.
- • Requires compatible products; bundling unrelated items (e.g., shampoo and motor oil) confuses customers.
Alternative Methods
Cross-Selling
Suggesting related items at checkout without a bundle discount.
Volume Discounts
Buy 2 of the SAME item to save, rather than different items.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Cosmetics Kit Strategy
Customers were buying $20 lipstick but ignoring the $15 liner.
Created a 'Lip Kit' for $30 (value $35).
Gaming Console Launch
Consoles are sold at near-zero margin; profit comes from games.
Bundled console + 2 games + extra controller.