No matter where and what your business is, bundling is a method that can potentially increase sales and make loyal customers for you. Bundling can be a creative process, in which you’ll be able to manage inventory, introduce new products, launch your current products to new groups of users, and most importantly: give discounts! Offering discounts to customers, if done correctly, can be the winning ticket for any kind of business: be it a small local shop that sells homemade candles and scarves, an online store for sports supplies or even big cosmetics and skincare brands.
That’s why we see discounts everywhere: “buy one, get one free” face creams, quantity breaks in food and produce, and seasonal offers on every occasion. Get to know the types of discounts, and start using them the way you see fit to gain their value. Here are the best types of discounts you can implement in your bundling efforts, for the benefit of your business. In this article, we discuss the concept of bundle discounts and provide you with examples to help understand the idea better.
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What are the 4 types of discounts most used in bundling?
When it comes to bundling products in any business, some types are more popular than others, and there’s a reason for that. They have proven to be both appealing for the customer, and functional and beneficial for the store owner. Here are the most used and best types of discounts, when it comes to bundling:
Buy One, Get One Free (BOGO)
The “Buy One, Get One Free” (BOGO) offer is a popular and effective bundle discount strategy used by both online and physical stores. One of the most popular types of discounts in Shopify, this promotion incentivizes customers to purchase an item by offering another item for free. Have you seen the skincare packages that come with free sample sizes of face cream or eye cream? That’s BOGO in a nutshell.
BOGO deals are particularly appealing because they provide customers with a clear and immediate benefit, making them feel like they are “getting a good deal”.
For online stores, especially those on platforms like Shopify, BOGO promotions can be easily implemented through a bundle app or built-in functionalities. These promotions can help increase sales volume, move inventory, and attract customers who care about paying less for more value.
Remember that BOGO is one of the best types of discounts for introducing customers to new products, enhancing their shopping experience and potentially increasing future sales. Physical stores benefit from these deals by creating attractive in-store displays that encourage impulse purchases. Overall, BOGO discounts are a win-win for both merchants and consumers, driving higher sales and customer satisfaction.
BOGO is one of the sub-sections of Buy X, Get Y Quantity discounts, which we’ll discuss later in the article.
volume discount
Volume discount (sometimes called bulk discount), is one of the most used discounts that creates added value with raising sales. In other words, volume discounts reward customers for purchasing larger quantities of a single product or a group of products.
One of the most important bundle discounts, this one is particularly effective in encouraging bulk purchases, which can significantly boost sales and help manage inventory levels. Volume discounts can be structured in different ways, such as offering a percentage off the total price or a fixed dollar amount reduction when a certain quantity threshold is met. Imagine a clothing brand, setting this type of discount on their $40 Shirts. Now if the customer buys 3 Shirts instead of 2, the total price will be $100 instead of $120.
Online stores, including those on Shopify, can easily set up volume discounts using apps to adjust prices automatically based on the quantity selected.
Volume discounts appeal to customers looking for savings on items they use frequently or want to stock up on. For physical stores, clearly communicating volume discount offers through signage and promotional materials can drive foot traffic and increase average order values. This strategy not only incentivizes higher spending but also builds customer loyalty by providing perceived value and cost savings.
Note that in some sources, a volume discount is described as related to a “tier discount”. There’s a notable difference between these two. Tier discounts are based on total spending, offering increasing discounts as “customers spend more”, encouraging higher overall purchase values.
Volume discounts, on the other hand, are based on the “quantity of items purchased”, providing greater discounts for buying larger quantities, which promotes bulk purchases. The former targets spending thresholds, while the latter targets purchase quantities.
Buy X, Get Y Quantity
Very similar to BOGO, The “Buy X, Get Y Quantity” discount offers customers a “free or discounted” additional quantity when they purchase a specified number of items. For instance, a common promotion might be “Buy 3, Get 1 Free.” This type of bundle discount encourages customers to buy more to receive the additional benefit, effectively increasing the average transaction size. In online stores, particularly those on Shopify, these promotions can be seamlessly integrated into the checkout process, prompting customers to add more items to their cart to qualify for the deal.
The difference between BOGO and Buy X Get Y?
Buy One, Get One (BOGO) offers an additional item for free or at a discount when purchasing one item, while Buy X, Get Y gives additional items when purchasing a specified quantity (e.g., “Buy 3, Get 1 Free”). BOGO is simpler, while Buy X, and Get Y encourage larger purchases.
Further Reading: How does product discount affect bundling?
Fixed Product Discount
Many times, offering discounts to customers comes in the form of bundles. Simple bundles discounts are considered an effective strategy for boosting sales in both online and physical stores. Special occasion discounts like Christmas packages, Mother’s day deals or back-to-school supply sales are all examples of fixed discounts. Unlike volume discounts or BOGO, there’s no condition to increase the amount of discount, it is, as the name implies, fixed. Setting a discount on a product bundle helps increase in average order value (AOV). it’s doable for most businesses (no matter the size), and it’s easy for customers to understand and use. Most importantly: you can repeat it many times in small periods of time. There are shops that are using bundle sales every day.
Using discount bundles is all about creating a vision of value. That’s why this one is one of the best types of discounts. Simple bundle discounts can significantly enhance customer satisfaction by providing perceived value. Customers feel they are getting more for their money, which can foster loyalty and repeat business. For example, a bundle of related items, such as a camera with accessories, can be perceived as a thoughtful and convenient offer, saving customers time and money. Satisfied customers are more likely to return and recommend your store to others, creating a positive feedback loop.
Shopify stores can easily implement bundle discounts using various apps and built-in features. These tools allow store owners to create customizable bundles and apply automatic discounts at checkout. This seamless integration ensures a smooth shopping experience for customers and simplifies the management of promotions for store owners.
Examples of discount types
To better understand these concepts, here are some stores that are actually using them in their day-to-day practice:
BOGO in Payless Shoe Store
Payless Shoe Source is a shoe company that frequently offers BOGO deals on their footwear. Customers can buy one pair of shoes and get a second pair of equal or lesser value for free. This strategy attracts bargain hunters and helps the store clear out older inventory, making room for new stock.
Vista Print
Vista Print is a Shopify store providing marketing products and uses BOGO deals to attract customers. For example, they offer “Buy One Business Card Set, Get One Free” promotions. This not only boosts sales but also encourages customers to try additional products or services that Vistaprint offers.
Costco Physical Stores
One of the best examples of volume discounts in various categories is good old Costco. This chain is well-known for its volume discounts, especially on groceries and household items. For instance, they offer significant discounts on bulk purchases of snacks, beverages, and cleaning supplies. Members who buy in larger quantities benefit from lower per-unit prices, driving higher overall sales for Costco.
The Body Shop Physical Stores
The Body Shop is a world-known beauty and skincare brand, often running “Buy 3, Get 2 Free” promotions on their products. This deal encourages customers to purchase multiple items to maximize their savings. The promotion is advertised in-store with eye-catching displays and through online marketing campaigns. You can fill your basket with face toners, body creams, and hair masks and get a good deal buying them.
Beard Brand
Beard brand, a Shopify store that sells grooming products for men, offers a “Buy 2, Get 1 Free” deal on their beard oils and grooming kits. This promotion is prominently featured on their website and through email newsletters, incentivizing customers to purchase multiple products to take advantage of the free item.
Fast Bundle, a Shopify bundle app for designing and customizing discounts
Want help in implementing all of the best types of discounts, and managing your Shopify bundles?
Fast Bundle is a Shopify bundle discount app, that helps store owners design various types of bundles, manage their inventory, and customize their bundle-making efforts to the highest efficiency. Fast Bundle integrates seamlessly into your Shopify store, automating all your bundling processes. Whether you want to create single-product bundles or multi-product bundles, Fast Bundle provides a comprehensive list of bundle types to choose from. Each bundle can be custom-made, allowing you to design offerings that are perfectly tailored to your customers’ interests.
