Joshua Franklin Wiedeman

Bundled Discounts

A bundled discount gives customers a lower price when they buy related items together. “Buy 2, get 1 free,” “Complete the set and save 20%,” and “Add the case for $10 instead of $25” are common forms. The goal is a larger average order value (AOV), with the customer feeling they got a deal.

How it works

Bundles work in two ways. First, customers compare the bundle price with the sum of the single prices and see the difference as savings. Second, once someone has chosen one product, a related item feels more useful, and a discount lowers the barrier to adding it. The bundle must make sense as a set. A camera with a lens and a memory card works. A camera with a lamp does not.

How to do it

  1. Run a market basket analysis on order history to find products often bought together.
  2. Rank pairs by co-purchase rate and margin. Favor pairs where the add-on has a healthy margin.
  3. Price the bundle below the sum of single prices. Start around 10-25% off and check the blended margin.
  4. Frame the saving as dollars when the amount is large (“$50 off”) and as a percentage when it is small (“25% off the add-on”). Test both.
  5. Show the offer on the product page (“Frequently bought together”), in the cart, and at checkout. For SaaS, show it during plan selection.
  6. Measure incremental revenue against the cost of the discount.

What to measure

  • Bundle attach rate: orders that include the bundle divided by eligible orders.
  • Incremental AOV: AOV of bundle orders minus AOV of comparable non-bundle orders, ideally from a holdout group.
  • Bundle margin contribution: total margin from bundle orders compared with single-item orders.

Best practices

  • Keep single items easy to buy. The bundle should be an option, not a requirement.
  • Make adding the bundle one click. Pre-select items and let customers remove what they do not want.
  • Rotate bundles by season or inventory. Pairing slow sellers with popular items helps clear stock.

Common pitfalls

  • Bundling unrelated products. Random bundles look like inventory dumping and cheapen both items.
  • Running a permanent deep discount. Customers stop buying the add-on alone at full price. Use time-limited bundles.
  • Not measuring cannibalization. If most bundle buyers would have bought both items anyway, the discount is lost margin. Use a holdout to measure true lift.